Section 1: Emphyteutic administrative lease

Leases entered into pursuant to article L. 1311-2 satisfy the following specific conditions:

1° The rights resulting from the lease may only be transferred, with the approval of the local authority, to a person subrogated to the lessee in the rights and obligations arising from this lease and, where applicable, from non-detachable agreements concluded for the performance of the public service or the completion of the operation of general interest.

As an exception to the previous paragraph, the rights resulting from the lease may not be transferred when compliance with the obligations of advertising and selection prior to the issue of a title, provided for in Article L. 2122-1-1 of the Code général de la propriété des personnes publiques, opposes it;

2° The real right conferred on the leaseholder as well as the works owned by the leaseholder may be mortgaged solely to guarantee loans taken out by the lessee to finance the construction or improvement of the works located on the leased property.

These loans are taken into account when determining the maximum amount of guarantees and sureties that a local authority is authorised to grant to a private person.

The contract constituting the mortgage must, on pain of nullity, be approved by the territorial authority;

3°Only mortgage creditors may exercise precautionary measures or enforcement measures on the property rights resulting from the lease.

The local authority has the option of substituting itself for the lessee in the burden of the loans by terminating or amending the lease and, where applicable, the non-detachable agreements. It may also authorise the transfer in accordance with the provisions of 1° above;

4° Disputes relating to these leases fall within the jurisdiction of the administrative courts;

5° Construction carried out under these leases may give rise to the conclusion of leasing contracts. In this case, the contract must include clauses that preserve the requirements of the public service;

6° Where remuneration is paid by the public entity to the lessee, the calculation of this remuneration must distinguish between investment, operating and financing costs.