MAINTENANCE AND REPAIR OF COMMERCIAL PREMISES
The allocation of charges and work between the landlord and the tenant is regulated for leases signed or renewed after November 5, 2014 (known as the Pinel Law of June 19, 2014).
The landlord can no longer pass on all charges to the tenant as they could before this law.
For Leases signed or renewed after November 5, 2014
Landlord’s obligations regarding Information for the Tenant
Charges Other Than Work
Upon signing the lease, the landlord must attach the following documents:
– a statement of natural and technological risks for the area in which the leased premises are located (ERNT);
– an energy performance certificate (DPE);
– a lead paint inspection is mandatory for mixed-use premises (commercial and residential);
– an environmental annex for office or retail premises larger than 2,000 m².
The landlord must also include a precise and exhaustive inventory of the categories of charges, taxes, and fees, with a breakdown between the tenant and the landlord, as well as between the different tenants of premises located in the same building complex, specifying the area used by each tenant for each category of charges. The tenant cannot be held responsible for charges not specified in the inventory stipulated in the lease agreement (Court d’appel, March 3, 2022, No. 18-04.413).
Likewise, once a year, the landlord must send the tenant – no later than September 30 – a summary statement of charges (for buildings in co-ownership, within three months of the charges being submitted).
Works
Every three years, the landlord must provide the tenant business with a summary statement of the works they plan to carry out, including a provisional budget and a report on the works completed during the previous three years. This information must be provided to the tenant within two months of each three-year renewal date.
What charges and work are the landlord’s mandatory responsibility?
Charges
Decree No. 2014-1317 of November 3, 2014, implementing the Pinel Law No. 2014-626 of June 18, 2014, lists the charges that cannot be passed on to the commercial tenant, such as:
– taxes, duties, and fees for which the landlord or owner of the premises or building is legally liable, including the local business tax (CET);
– fees related to rent management;
– in a building complex, charges, taxes, duties, fees, and the cost of work related to vacant units or attributable to other tenants.
However, the landlord may charge the tenant for property tax and any additional property taxes, as well as any taxes, fees, and charges related to the use of the premises, the building, or a service from which the tenant benefits directly or indirectly.
Works
These concern the building’s structure and overall stability.
Major repairs are the landlord’s responsibility: load-bearing walls, vaults, replacement of beams and roofing, dikes, and retaining and boundary walls (Article 606 of the Civil Code).
Example: If a landlord includes roof repair and facade renovation expenses in the tenant’s charges, the tenant may contest these charges with the landlord or in court.
The landlord must also cover the costs of work intended to remedy dilapidation or bring the rented property or the building in which it is located into compliance with regulations, provided that such work constitutes major repairs (Article 606 of the Civil Code).
If the owner of the premises changes after the previous owner has been ordered by the court to carry out work as part of their obligation to deliver the premises in a suitable condition, the new owner must also fulfill this obligation.
The same applies when a building is sold at auction with a set of specifications that includes a court order requiring the landlord to carry out work (Cass, civ 3rd, February 21, 2019, No. 18-11.553). In this case, the tenant can use this order to compel the new landlord to carry out the work.
Before purchasing a business with an existing lease, the buyer should carefully consider the amount of work to be carried out by the landlord. He will need to inquire with the transferor, as the building owner can terminate the lease if, during its term, the cost of the work he needs to carry out exceeds the value of the leased property (Articles 1722 and 1741 of the Civil Code). This value is assessed based on the current value of the leased property, but also, and particularly, on the income generated by the property (i.e., the rent). In this case, the landlord can obtain automatic termination of the lease.
The Court of Cassation reiterated this principle in a ruling concerning a hotel-restaurant-guesthouse regarding compliance work mandated by the administrative authority and borne by the landlord (Cass, civ 3rd, December 20, 2018, No. 16-23.449).
In other words, if the building is worth €300,000, the work costs €450,000, and the monthly rent is €600, the landlord will only be able to pass on these costs after 62 years. In this case, the landlord could terminate the lease at their request.