The Starting Point: What the Law Says About Renewal Rent

Under the French commercial lease statute, the renewed rent must in principle be set at the market rental value of the premises. Article L 145-33 of the Code de commerce defines market rental value by reference to five criteria: the characteristics of the premises, the destination of the lease, the obligations of the parties, the local commercial factors, and prices observed in the market. If the parties cannot agree, either can apply to the juge des loyers commerciaux for judicial determination. The renewed rent is also subject to the capping rule of Article L 145-34: absent a material change in local commercial factors, the renewed rent cannot exceed the indexed previous rent.

Both rules were designed for ordinary commercial leases with a fixed rent. Neither maps neatly onto a shopping centre lease containing a binary rent — a guaranteed minimum combined with a turnover percentage. The question of how these statutory rules apply, whether they apply, and what replaces them when the parties have drafted their own renewal provisions has occupied French courts since the early 1990s and produced four landmark rulings.

Thirty Years of Case Law: Four Rulings That Changed Everything

1993
Arrêt Théatre Saint-Georges — The Original Lock-In
The Cour de cassation ruled that the renewal rent for a lease containing a clause-recettes falls entirely outside the commercial lease statute and is governed solely by the parties' agreement. A landlord holding a binary-rent lease cannot apply to court to have the guaranteed minimum raised to market rental value. The rent is locked into the contractual structure. This principle was later confirmed and extended to polyvalent premises, and applied even where the variable component had never triggered during the entire lease term.
2016
Arrêts Marveine — Opening the Door
Two landmark rulings from the Cour de cassation substantially revised the position. A binary-rent lease does not prevent the parties from agreeing that the guaranteed minimum will be set at market rental value on renewal, with judicial determination if they cannot agree — provided the lease expressly provides for this. Where such a clause exists, the court must apply it using the Article L 145-33 criteria and must apply an abatement on the fixed component to reflect the tenant's additional variable obligation. The ruling was extended in 2018 to leases with a purely variable structure plus a market-value floor.
2024
Arrêt Monoprix — Judicial Competence Without a Clause
The Cour de cassation held that the juge des loyers cannot refuse to hear a rent fixation application for a binary-rent lease merely because the lease contains no express judicial competence clause. The court must determine whether the parties agreed — expressly or from surrounding circumstances — to allow judicial determination of the fixed component. If no such agreement is found, the court rejects the application and the previous contractual structure continues. The ruling also confirmed that the Article L 145-33 criteria are default rules yielding to party agreement, opening the door to autonomous contractual definitions of market value.

The Indivisibility Problem

At the heart of the renewal debate for binary-rent leases is a structural reality: the fixed and variable components are indivisible. The guaranteed minimum does not represent the full market rental value of the premises — it represents only part of it. A court that fixes the guaranteed minimum at market rental value in isolation from the variable layer overcompensates the landlord: they receive both a minimum at full market value and a variable upside on top. Article R 145-8, alinéa 3 of the Code de commerce reinforces this: in assessing market rental value, the court must take into account the modalities under which the previous rent was originally fixed.

The Marveine rulings accepted the consequence: where the court fixes the guaranteed minimum, it must apply an abatement to reflect the variable layer. How large that abatement should be is contested. If the variable rarely or never triggers in practice — because the guaranteed minimum already sits above what the turnover percentage would generate — is an abatement of zero defensible? One court applied a 5 per cent abatement even where the variable threshold had never been reached, reasoning that the contractual obligation itself justifies a downward correction regardless of its practical impact.

The Abatement in Practice

The size of any abatement on the fixed component at renewal is a matter of expert assessment. The court-appointed expert must examine the statistical likelihood of the variable threshold being reached, the relationship between the current minimum and what the turnover percentage would produce on actual trading figures, and the centre's commercial history. A centre where the variable has never triggered and the minimum structurally exceeds the turnover percentage may support a zero or near-zero abatement. The practical reality in many mature centres is that minimums have been set so high over successive renewals that the variable layer has become largely nominal.

The 2024 Monoprix Ruling: Two Key Points

The arrêt Monoprix of 30 May 2024 (Cass. 3e Civ. n° 22-16.447) clarified two points that had remained uncertain after Marveine. First, on judicial competence without an express clause: the juge des loyers has exclusive jurisdiction over renewal rent fixation and cannot declare an application inadmissible simply because the lease is binary. The court must assess whether the parties agreed — in the contract or from extrinsic circumstances — to allow judicial determination of the fixed component. That intention can be found in the contract as a whole, in the pre-contractual negotiations, or in the way the lease has been performed and previously renewed. Second, on the status of the Article L 145-33 criteria: the ruling confirmed that these provisions are supplétives de la volonté — default rules that yield to contrary party agreement. Autonomous financial conditions clauses that define market value by reference to internal centre comparables only, excluding judicial determinations and incorporating capitalised key money, should now be capable of binding the court where the parties have clearly agreed to that definition.

The Presumption Against Landlords

The Monoprix ruling contains a critical limitation. The Cour de cassation established that in a binary-rent lease, the presumption runs in favour of the parties having excluded judicial fixation — not having accepted it. The party seeking court revision must rebut this presumption by affirmatively demonstrating the parties' contrary intention. That is a burden that falls on the landlord in most renewal disputes, and it requires positive evidence — not merely the absence of an exclusion clause.

Fixed-Rent Leases in Shopping Centres

Not every shopping centre lease is binary. Those that are not follow the ordinary statutory framework, but with two techniques that landlords have used to escape the capping rule. The first technique, now obsolete for repeat use, was to set the initial lease term above nine years. Where a lease runs for twelve years, the first renewal triggers the uncapped market rental value assessment because the duration exceeds the nine-year baseline. But this technique only works once: from the second renewal onward, the tenant can insist on the statutory nine-year duration, which is a matter of public order, and the cap applies again.

The second technique, now standard in current-generation leases, is the autonomous financial conditions clause: a provision in the original lease stating that the renewal rent will be set at the market value of the centre as defined by reference to internal comparables, regardless of the statutory capping criteria. These clauses derogate entirely from Article L 145-34 and from the Article L 145-33 criteria. The typical clause defines market value by reference to rents freely agreed in the same centre in the three years preceding the renewal date, excluding judicial determinations, including capitalised key money decapitalised on centre-specific terms, measured on GLA basis, with a floor equal to the current indexed minimum.

Assessing Market Value in Shopping Centres

Whether the renewal rent is set judicially, by agreement, or under a contractual market value definition, the fundamental question is: which market? The answer is firm: a shopping centre constitutes an autonomous market unit. The comparable transactions must be found within the centre itself. External references — from the surrounding area or from other shopping centres — are generally excluded, unless the landlord is the unique lessor of the entire gallery and all internal comparables are therefore transactions on the same terms with the same counterparty. Within the centre, four factors drive the rental scale: location within the mall (proximity to checkouts, principal entrances and anchor tenants); unit size (larger units depress the per-square-metre rate); frontage width; and the destination clause (which governs which sector rate hierarchy applies). GLA measurement, which includes party walls in the measured area, is standard and court-approved.

Binary Lease, No Renewal Clause

The contractual structure rolls forward. The landlord cannot apply to court to revise the minimum, unless the Monoprix test for implicit agreement to judicial determination is met — which requires affirmative evidence. If it is not met, the only exit for the landlord is to refuse renewal and pay the eviction indemnity.

Binary Lease, Express Judicial Clause

The juge des loyers fixes the minimum using the Article L 145-33 criteria or the contractual variant. An abatement is applied to reflect the variable component. The variable percentage continues unchanged and is not subject to judicial revision.

Any Lease, Autonomous Conditions Clause

The renewal rent is fixed by reference to the contractual market value definition — typically internal centre comparables with a floor at the indexed current minimum. Post-Monoprix, this definition should bind the court as a valid derogation from the statutory default criteria.

Fixed-Rent Lease, Standard Terms

The cap applies at each nine-year renewal. The over-nine-year duration technique escapes the cap only once. For subsequent renewals, the tenant can insist on nine years and the cap returns.

Drafting Recommendation

Given the uncertainty that persists even after Monoprix around judicial competence where the lease is silent, landlords would be well-advised to include either an express clause granting jurisdiction to the juge des loyers to fix the guaranteed minimum at renewal — with a clear reference to the statutory or contractual valuation criteria — or a dispute resolution clause providing for determination by an expert under Article 1592 of the Civil Code or by an arbitrator. The Article 1592 route avoids the presumption against judicial determination, places the decision with a sector specialist, and produces a binding result faster than court proceedings.

What Landlords and Tenants Must Know Before Renewal
A binary-rent lease without a renewal clause locks the rent into the contractual structure: the statutory rent review process is displaced by the Théâtre Saint-Georges principle (Cass. 3e Civ. 1993).
After Marveine (2016): where the lease expressly provides for judicial fixation, the court applies Article L 145-33 criteria and must apply an abatement for the variable component.
After Monoprix (2024): the court cannot refuse to hear a fixation application even without an express clause — but it presumes the parties excluded judicial determination, and the party seeking revision must rebut that presumption with positive evidence.
The variable component is never subject to judicial review at renewal — only the fixed minimum can be revised; the variable percentage continues under the original contractual terms.
The fixed and variable components are indivisible for valuation: fixing the minimum at market value in isolation, without accounting for the variable layer, overcompensates the landlord.
Market rental value in any shopping centre is assessed by reference to internal comparables only; the centre is an autonomous market unit.
The Article L 145-33 criteria are now confirmed as supplétif — default rules that yield to a clear contrary contractual definition of market value (Monoprix 2024).
The over-nine-year duration technique for escaping the cap works only once; from the second renewal the tenant can demand nine years and the cap applies again.
Facing a Shopping Centre Lease Renewal in France?

Whether you are a landlord seeking to revise a guaranteed minimum that no longer reflects commercial reality, or a tenant defending against an unexpected rent increase, the renewal process for French shopping centre leases requires specialist legal and valuation expertise.

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This article is for general information and educational purposes only. It does not constitute legal advice. The legal framework described reflects French law and jurisprudence as at 2025. Shopping centre lease renewal involves complex legal and valuation issues. Always seek qualified legal and expert advice before any renewal process.