Participation vs Authorisation: Two Separate Requirements

The authorisation to sublet gives the tenant permission in principle; the participation formality serves a different and additional purpose. By calling the landlord to the sublease deed, the tenant enables the landlord to review the specific conditions of the sublease — the identity of the sub-tenant, the duration, the rent, the permitted use — and to exercise, where applicable, its right to demand a corresponding increase in the main lease rent. Authorisation does not substitute for the participation call. A lease that contains a general authorisation to sublet still requires the tenant to call the landlord to each individual sublease deed and to each renewal that constitutes a new contract. This remains true even where the authorisation is expressed in very specific terms and the landlord already knows the proposed sub-tenant's identity. The two requirements are cumulative and independent (Cass. 3e Civ. 17-10-1990; 22-2-2006).

How to Call the Landlord to a French Commercial Sublease Deed

1
Send the Formal Notification
The tenant must inform the landlord of its intention to sublet by acte extrajudiciaire (bailiff's act) or by registered letter with acknowledgement of receipt. The notification may simultaneously communicate the date, time, and place of signature of the sublease deed, or the tenant can provide these details after the landlord has confirmed its intention to participate (C. com. Art. L 145-31 al. 4).
2
15-Day Response Window
The landlord has 15 days from receipt of the notification to indicate whether it intends to participate in the sublease deed. The landlord is not obliged to respond, and is not obliged to attend the signing. The formality is met by calling the landlord — it does not require the landlord's actual presence or approval of the sublease terms.
3
Landlord's Silence Is Passed Over
If the landlord fails to respond within the 15-day period, the sublease may proceed without the landlord's participation. The tenant and sub-tenant may sign the sublease deed. The sublease is valid and, once the formality has been properly completed, is opposable to the landlord.

The tenant bears the obligation to make the call — not the sub-tenant. However, the sub-tenant has every practical interest in verifying that the call has been made and in taking the initiative to make it if the tenant has failed to do so, because only a properly called sublease is opposable to the landlord. A sub-tenant who accepts a sublease without checking that the landlord participation formality was completed is at risk of losing all statutory protections if the landlord subsequently challenges the sublease's regularity.

When a Sublease Renewal Requires Fresh Participation

The participation obligation applies each time a new sublease contract comes into existence: the initial sublease, each renewal that constitutes a new contract (as distinct from a mere extension of the existing sublease), and any renegotiation of sublease terms that rises to the level of a new agreement rather than a simple amendment. The distinction between a renewal requiring fresh participation and an extension not requiring it is determined by the nature of the change. An extension by mutual agreement that prolongs the same sublease on identical terms, without creating a new contract, does not require fresh participation. A formal renewal — a new sublease contract replacing the expired one — does, even with largely identical terms (Cass. 3e Civ. 3-10-1973; 16-6-1999; 28-10-2009). Courts apply a substantive test: if the parties clearly intend to create a new lease relationship between them, the participation formality must be observed again.

The Landlord's Rent Adjustment Right

One of the most commercially significant reasons for the landlord to participate — beyond compliance — is the right to demand a corresponding adjustment of the main lease rent if the sublease rent exceeds the main lease rent. Article L 145-31, alinéa 3 of the Code de commerce gives the landlord this right whenever the sub-tenant pays more per square metre than the tenant pays under the main lease, regardless of whether the sublease is regular or irregular. The comparison must be made proportionally: where only part of the premises are sublet, rent levels must be compared on a per-square-metre basis (Cass. 3e Civ. 28-5-1997 n° 876 PF). A partial sublease that produces a higher per-square-metre rate for the sublet portion gives the landlord the right to demand a proportionate increase in the main lease rent.

The action to demand this increase is subject to the two-year limitation period for rent-fixing actions under the commercial lease statute (C. com. Art. L 145-56; Cass. 3e Civ. 1-4-1998; 18-12-2002). The limitation period runs from the date the landlord first had knowledge of the sublease rent level — not from the date of the sublease itself. Any good-faith attempt to conceal the sublease rent from the landlord postpones the start of the limitation period. The increase in the main lease rent obtained by the landlord cannot automatically be passed on to the sub-tenant unless the sublease expressly provides for a rent increase mechanism tied to any increase in the main lease rent.

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The Rent Adjustment Action Is Independent

The landlord's right to demand a rent adjustment under Article L 145-31 is legally independent from the renewal rent-fixing action (Cass. 3e Civ. 7-2-2007 n° 05-20.252). The landlord cannot raise the sublease-based adjustment claim as a counterclaim in renewal proceedings, nor can it substitute the adjustment for a derogation from the renewal rent cap. Each action must be brought separately, under its own applicable limitation period. Once the two-year period for the adjustment claim has run, the landlord cannot subsequently invoke the sublease to argue for a derogation from the renewal cap either.

The Essentials of the Participation Formality
Participation is a substantive requirement independent of authorisation: a general authorisation clause in the lease does not waive it (Cass. 3e Civ. 17-10-1990; 22-2-2006).
The tenant must call the landlord by acte extrajudiciaire or registered letter before the sublease is signed (Art. L 145-31 al. 4).
The landlord has 15 days to indicate whether it will participate; silence entitles the tenant to proceed.
The formality is satisfied by calling the landlord — the landlord's actual presence or approval of the terms is not required.
Fresh participation is required for each new sublease contract and each renewal that constitutes a new contract; tacit extensions of an existing sublease do not require it (Cass. 1973; 1999; 2009).
The obligation falls on the tenant; the sub-tenant is advised to verify compliance and may take the initiative if the tenant fails to act.
Where the sublease rent exceeds the main lease rent per square metre, the landlord may demand a corresponding increase in the main lease rent (Art. L 145-31 al. 3); this right runs even against irregular subleases.
The adjustment action is subject to a 2-year limitation period running from the landlord's knowledge of the sublease rent level; it is legally independent from the renewal rent-fixing action (Cass. 7-2-2007 n° 05-20.252).
A main lease rent increase obtained by the landlord cannot automatically be passed on to the sub-tenant unless the sublease expressly provides for it.
Structuring a French Commercial Lease Sublease?

The participation formality and the rent adjustment risk must both be managed carefully before any subletting arrangement is signed.

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This article is for general information and educational purposes only. It does not constitute legal advice. Always seek qualified legal advice before any subletting arrangement.