You opened your subsidiary in France, fitted out the office or the shop, hired staff, and built a customer base. Then a letter arrives from your French landlord: he refuses to renew your commercial lease, or he offers a renewal at a rent your business cannot pay. For a foreign founder or a foreign parent company, this moment is dangerous. French commercial leases, called baux commerciaux, give the tenant a legal right to stay that has no equivalent in many common-law systems, but that protection only works if you react fast, in French procedural forms, and within strict deadlines. A missed two-year deadline can wipe out a compensation worth several years of profit, and an informal email exchange can turn into an eviction with no payment at all.

This guide explains, in plain English, what your landlord must do to take the premises back, what he must pay you, and how your company stays protected. You will learn the exact form a termination notice, called a congé, must take, how the eviction compensation, called indemnité d’éviction, is calculated, how courts punish landlords who disguise a refusal as a fake renewal offer, and how the revised rent is set when the lease continues. You will also learn the traps that typically catch foreign tenants: short-term leases that look flexible but destroy your rights, and the two-year time limit that quietly kills both your money and your right to remain. Every rule below is drawn from the French Commercial Code and from recent decisions of the Cour de cassation, the highest civil court in France, so you can check each statement against the official text. If your company received a congé or a renewal offer in the last few months, read Part I immediately and calendar the deadlines in Part II, Section B before you answer your landlord.

I. Your landlord refuses to renew your French commercial lease: the termination notice he must serve and the eviction compensation he owes you

A. How your landlord ends your lease: the six-month congé that must state its reasons or fail

French law starts from a simple principle: commercial leases last at least nine years, a rule lawyers nickname the 3/6/9 lease because the tenant can leave every three years while the landlord is locked in. Article L. 145-4 of the Commercial Code provides that “La durée du contrat de location ne peut être inférieure à neuf ans” (The term of the lease may not be less than nine years), while the tenant, called the preneur, “a la faculté de donner congé à l’expiration d’une période triennale, au moins six mois à l’avance” (may give notice at the end of each three-year period, at least six months in advance). For your company, this means the landlord cannot simply wait for year nine and change the locks. He must serve a formal notice, and that notice must follow strict rules on timing, form and content.

The central rule sits in Article L. 145-9 of the Commercial Code. Commercial leases “ne cessent que par l’effet d’un congé donné six mois à l’avance ou d’une demande de renouvellement” (end only through a notice given six months in advance or a renewal request). If nobody serves anything, a written lease “se prolonge tacitement au-delà du terme fixé par le contrat” (is tacitly extended beyond the term fixed in the contract), and during that tacit extension, notice must still be given at least six months ahead, for the last day of a calendar quarter. The congé itself “doit être donné par acte extrajudiciaire”, meaning it must be served by a commissaire de justice (the court officer formerly called huissier de justice), not by simple email or registered letter. Most importantly for a foreign owner reading a French document, the notice “doit, à peine de nullité, préciser les motifs pour lesquels il est donné” (must, on pain of nullity, state the reasons for which it is given) and must tell the tenant that anyone wishing to contest it or claim eviction compensation must go to court within two years of the notice date.

Before going further, check that your lease is actually covered by this protective regime. Article L. 145-1 of the Commercial Code states that these rules apply to “baux des immeubles ou locaux dans lesquels un fonds est exploité” (leases of buildings or premises in which a business is operated), where fonds de commerce means the going business itself: customers, trade name, lease right and goodwill. In practice, if your French subsidiary or branch is registered with the trade and companies register, called the Registre du commerce et des sociétés (RCS), and operates from the premises, you are inside the regime, and the official guidance for business owners confirms the scope and the procedure (see the Service Public pages on refusal of renewal and renewal or tacit extension).

What happens when the landlord’s congé is defective, for example a notice with no reasons or with vague, equivocal wording? The answer from the Cour de cassation surprises many foreign lawyers. In a leading decision of 28 June 2018, the Third Civil Chamber held that “un congé délivré sans motif ou pour motifs équivoques par le bailleur produit néanmoins ses effets et met fin au bail commercial, dès lors que le bailleur est en toujours en droit de refuser le renouvellement du bail à la condition de payer une indemnité d’éviction” (a notice served without reasons or with equivocal reasons still produces its effects and ends the commercial lease, since the landlord always retains the right to refuse renewal on condition of paying an eviction indemnity) (Cass. 3rd civ., 28 June 2018, No. 17-18.756). The same decision adds that “la nullité de ce congé prévue par l’article L. 145-9 du code de commerce est une nullité relative qui ne peut être soulevée que par le preneur” (the nullity of this notice under Article L. 145-9 is a relative nullity that only the tenant may raise). The tenant then has a choice: “soit renoncer à la nullité du congé en sollicitant une indemnité d’éviction et en se maintenant dans les lieux en l’attente de son paiement” (either waive the nullity by claiming eviction compensation and remaining in the premises while awaiting payment) “soit s’en prévaloir en optant pour la poursuite du bail” (or rely on it by opting for continuation of the lease). In other words, a badly drafted congé does not save you by itself, but it hands you a strategic option: stay and get paid, or attack the notice and stay on the original terms. A foreign owner should never ignore a defective notice and assume it is void without action; you must actively choose your route, in court if needed, within the two-year window described below.

The Cour de cassation returned to the content of the congé very recently. In a decision of 4 June 2026, it restated that “le congé donné par le bailleur doit, à peine de nullité, préciser les motifs pour lesquels il est donné et indiquer que le locataire qui entend, soit le contester, soit demander le paiement d’une indemnité d’éviction doit saisir le tribunal avant l’expiration d’un délai de deux ans à compter de la date pour laquelle le congé a été donné” (the notice given by the landlord must, on pain of nullity, state the reasons for which it is given and indicate that a tenant wishing either to contest it or to claim eviction compensation must apply to the court before the expiry of two years from the date for which the notice was given) (Cass. 3rd civ., 4 June 2026, No. 24-21.573). Practical lesson: when you receive the document, verify four things the same day. First, who served it and how: only service by commissaire de justice counts. Second, the timing: six months before the end date, and for the last day of a calendar quarter during tacit extension. Third, the stated reasons: refusal with compensation, alleged serious breach, demolition or reconstruction. Fourth, the two-year warning paragraph: if it is missing, the notice is vulnerable, and your lawyer can use that defect. Photograph the envelope, keep the original, and send everything to counsel immediately, because the clock that can destroy your rights starts on the effective date written in the notice, not on the day you understood it.

B. What your landlord must pay to take the premises back: eviction compensation and the narrow escape of serious breach

Once the congé with refusal of renewal takes effect, the default rule is that your landlord must pay. Article L. 145-14 of the Commercial Code provides that “Le bailleur peut refuser le renouvellement du bail. Toutefois, le bailleur doit, sauf exceptions prévues aux articles L. 145-17 et suivants , payer au locataire évincé une indemnité dite d’éviction égale au préjudice causé par le défaut de renouvellement” (The landlord may refuse to renew the lease. However, the landlord must, except as provided in Articles L. 145-17 and following, pay the evicted tenant an eviction indemnity equal to the loss caused by the failure to renew). The statute details the content: “Cette indemnité comprend notamment la valeur marchande du fonds de commerce, déterminée suivant les usages de la profession, augmentée éventuellement des frais normaux de déménagement et de réinstallation, ainsi que des frais et droits de mutation à payer pour un fonds de même valeur” (This indemnity includes in particular the market value of the business, determined according to professional practice, increased where applicable by the normal costs of removal and reinstallation, as well as the transfer taxes and duties payable for a business of the same value), “sauf dans le cas où le propriétaire fait la preuve que le préjudice est moindre” (except where the owner proves that the loss is smaller). For a foreign group, the key insight is that the compensation is not a few months of rent: where the business cannot be moved without losing its customers, it equals the sale value of the entire French going concern, plus moving costs and transfer taxes. This is why landlords sometimes prefer to negotiate a renewal at a higher rent rather than pay, and why you should have the business valued by an independent expert before any negotiation. The administration’s own explainer confirms the valuation method and the cost items (see how the eviction indemnity is assessed).

The landlord escapes payment only through narrow statutory doors, and the main one is serious breach by the tenant. Article L. 145-17 of the Commercial Code allows refusal without any indemnity “S’il justifie d’un motif grave et légitime à l’encontre du locataire sortant” (If he shows serious and legitimate grounds against the outgoing tenant). But the protection for tenants is strong: where the complaint is a breach of an obligation or an unjustified shutdown of the business, “l’infraction commise par le preneur ne peut être invoquée que si elle s’est poursuivie ou renouvelée plus d’un mois après mise en demeure du bailleur d’avoir à la faire cesser” (the breach may only be relied upon if it continued or recurred more than one month after formal demand by the landlord to stop it), and “Cette mise en demeure doit, à peine de nullité, être effectuée par acte extrajudiciaire, préciser le motif invoqué et reproduire les termes du présent alinéa” (This formal demand must, on pain of nullity, be served by extrajudicial act, state the ground relied upon and reproduce the wording of this paragraph). In practice, unpaid rent, unauthorized subletting or persistent nuisance only justify a free eviction if the landlord first served a compliant formal demand and your company failed to cure within a month. If you receive a mise en demeure (formal demand) from your landlord, treat it as an emergency: pay or cure within the month, keep written proof, and never assume an informal warning letter counts. Conversely, if the landlord claims a serious ground but never served that specific demand, his refusal to pay collapses, and your company keeps its right to full compensation.

Landlords sometimes try a cheaper route: instead of openly refusing renewal, they offer a renewal on drastically different terms, such as half the floor space, a change of permitted activity, or new obligations the business cannot accept, hoping the tenant will walk away with nothing. The Cour de cassation closed that door. In a decision of 11 January 2024, the Third Civil Chamber restated that the principle that absent agreement to the contrary, renewal of a commercial lease takes place on the clauses and conditions of the expired lease, subject only to the court’s recognized power over rent-setting, and held that “un congé avec une offre de renouvellement du bail à des clauses et conditions différentes du bail expiré, hors le prix, doit s’analyser comme un congé avec refus de renouvellement ouvrant droit à indemnité d’éviction” (a notice offering renewal on clauses and conditions different from the expired lease, apart from the rent, must be treated as a notice refusing renewal, giving rise to eviction compensation) (Cass. 3rd civ., 11 January 2024, No. 22-20.872). Only the rent itself may be rediscussed at renewal; every other clause carries over. If your landlord’s renewal offer shrinks your space, bans part of your activity or shifts major works onto your company, French law treats that letter as a refusal, and the full compensation becomes due. Do not sign such an offer under time pressure, and do not reject it by phone either: reply in writing that you consider the offer a disguised refusal opening your right to compensation, and ask your lawyer to file the protective court claim within the two-year period.

Until the compensation is paid, your company has a powerful shield: the right to stay. Article L. 145-28 of the Commercial Code, cited in the 2018 decision above, lets the tenant remain in the premises while awaiting payment of the indemnity. But that shield has an expiry date, as the next part shows, and recent case law applies it strictly. The commercial lesson of this section is straightforward. First, have every congé and every renewal offer reviewed by French counsel within days, because the legal characterization of the document decides whether millions change hands. Second, never cure a breach late: the one-month window after a formal demand is the cheapest insurance your company will ever buy. Third, value the fonds de commerce early through an independent valuer, because negotiation without a number is surrender. Foreign headquarters often underestimate this asset, since group accounts may show the French unit at cost while French law compensates market value including location premium.

II. How your French company stays, pays the right rent or leaves safely: renewal rent, short-lease traps and the deadlines that decide everything

A. How your new rent is set when the lease continues: market rental value, the three-year cap and the judge who decides

When the lease is renewed, either because the landlord accepts renewal or because your company defeats his congé, the rent is renegotiated under statutory rules that favor neither side blindly. Article L. 145-33 of the Commercial Code states that “Le montant des loyers des baux renouvelés ou révisés doit correspondre à la valeur locative” (The amount of rent for renewed or revised leases must correspond to the rental value). Failing agreement, that value is assessed on five factors: “1 Les caractéristiques du local considéré” (the characteristics of the premises), “2 La destination des lieux” (the permitted use), “3 Les obligations respectives des parties” (the respective obligations of the parties), “4 Les facteurs locaux de commercialité” (local commerciality factors), and “5 Les prix couramment pratiqués dans le voisinage” (rents commonly charged in the vicinity). In plain terms, the renewed rent tracks what a comparable tenant would pay for comparable premises in the same shopping street or business district, adjusted for who pays for works, taxes and charges. For a foreign tenant, two items deserve attention. The permitted use, called destination des lieux, frames everything: a lease limited to back-office use commands a different value than a prime retail frontage, so any contractual restriction your landlord inserted years ago still depresses or inflates today’s rent. And the neighborhood evidence cuts both ways: your landlord will file high comparable rents, while your expert must produce genuine comparables of similar size, frontage and foot traffic, not ssize averages from another arrondissement.

Between renewals, the landlord may also seek a rent revision every three years, and here the statute caps the upside. Article L. 145-38 of the Commercial Code allows revision requests “trois ans au moins après la date d’entrée en jouissance du locataire ou après le point de départ du bail renouvelé” (at least three years after the tenant took possession or after the start of the renewed lease), with effect “à compter de la date de la demande en révision” (from the date of the revision request). The protective mechanism follows: unless the landlord proves a material change in local commerciality factors that alone moved rental value by more than 10 percent, “la majoration ou la diminution de loyer consécutive à une révision triennale ne peut excéder la variation de l’indice trimestriel des loyers commerciaux ou de l’indice trimestriel des loyers des activités tertiaires” (the increase or decrease resulting from a three-yearly revision may not exceed the movement in the quarterly commercial rents index or the quarterly tertiary activities rents index). Those indices, the ILC (indice des loyers commerciaux) for shops and the ILAT (indice des loyers des activités tertiaires) for offices, are published quarterly by the national statistics institute INSEE. Even where the landlord proves the plus-10-percent shift, “la variation de loyer qui en découle ne peut conduire à des augmentations supérieures, pour une année, à 10 % du loyer acquitté au cours de l’année précédente” (the resulting rent movement may not produce increases greater, for one year, than 10 percent of the rent paid during the previous year). A final sentence protects tenants who improved the premises: “En aucun cas il n’est tenu compte, pour le calcul de la valeur locative, des investissements du preneur” (In no case are the tenant’s investments taken into account in calculating rental value). Your fit-out works therefore cannot be used to inflate your own rent, a point foreign finance directors should confirm with their valuer before conceding anything.

If the parties disagree on the renewed or revised figure, either side applies to the rent judge, and the procedure is technical: expert valuation, memorials exchanged, and fixation at rental value, subject to statutory caps and smoothing rules introduced for large increases. Two practical warnings follow. First, never stop paying the current rent while disputing the new one; withholding rent manufactures the serious breach your landlord needs for a free eviction under Article L. 145-17. Pay under protest, mark transfers as reserving your rights, and let the judge decide. Second, remember the 2024 disguised-refusal rule from Part I: at renewal, only the price is negotiable, and the rule that absent agreement to the contrary, renewal takes place on the clauses and conditions of the expired lease, subject only to the court’s power over rent-setting. A landlord who answers your renewal request with a rent demand plus a clause stripping your 3/6/9 break option or banning assignment on sale of the business is not negotiating; he is refusing, and the compensation regime applies. For headquarters budgeting in euros from abroad, the combined message is reassuring: French law does not let a landlord double the rent overnight on renewal or revision, the indices and the 10-percent annual smoothing confine the shock, and any clause ambush converts into a compensation claim rather than a trap.

B. How foreign tenants lose everything without a trial: the short-lease trap, the two-year guillotine and your first-week checklist

The most expensive mistake foreign companies make in France is signing what looks like a flexible short lease. French law allows the parties, when the tenant first takes possession, to opt out of the protective regime “à la condition que la durée totale du bail ou des baux successifs ne soit pas supérieure à trois ans” (on condition that the total duration of the lease or successive leases does not exceed three years), under Article L. 145-5 of the Commercial Code, the so-called bail dérogatoire (short-term derogation lease). At expiry, “les parties ne peuvent plus conclure un nouveau bail dérogeant aux dispositions du présent chapitre pour exploiter le même fonds dans les mêmes locaux” (the parties may no longer conclude a new derogation lease to operate the same business in the same premises). The trap then snaps shut in one sentence: “Si, à l’expiration de cette durée, et au plus tard à l’issue d’un délai d’un mois à compter de l’échéance le preneur reste et est laissé en possession, il s’opère un nouveau bail dont l’effet est réglé par les dispositions du présent chapitre” (If, at the end of that period, and no later than one month after expiry, the tenant remains and is left in possession, a new lease arises governed by the provisions of this chapter). The same automatic conversion happens on express renewal or a new lease between the same parties for the same premises. In other words, a short lease is a one-shot instrument: use it once for a test period, and if you stay even one month past expiry without leaving, you fall into a full nine-year bail commercial with the right to renewal and compensation, which is good news for the tenant who understands it and a shock for the landlord who drafted the short lease to stay flexible. The Cour de cassation confirmed the constitutional solidity of this architecture on 19 June 2025, declining to refer to the Constitutional Council a challenge to the differing limitation rules around these leases (Cass. 3rd civ., 19 June 2025, No. 24-22.125). For your company, the guidance is concrete: never chain two short leases for the same shop, never assume a side letter extends flexibility, and diary the expiry minus two months so the board decides deliberately whether to leave cleanly or to convert. The administration summarizes the mechanism for business owners (see short-term derogation leases), and the termination mechanics, including the tenant’s three-year break, are explained alongside (see ending a commercial lease).

The second guillotine is time, and it falls silently. All actions under the commercial-lease chapter expire after two years: Article L. 145-60 of the Commercial Code provides that every claim under the regime is subject to a two-year prescription, running from the effective date of the congé for compensation claims. The Cour de cassation enforces this limit without mercy. In a decision of 12 February 2026, the Third Civil Chamber held that “la mauvaise foi du bailleur n’est pas une cause d’interruption ou de suspension de la prescription biennale de l’action en paiement de l’indemnité d’éviction, laquelle court à compter de la date d’effet du congé même lorsqu’il est délivré avec offre d’indemnité d’éviction” (the landlord’s bad faith is no ground for interrupting or suspending the two-year limitation of the action for eviction compensation, which runs from the effective date of the notice even when served with an offer of compensation), adding that “le locataire à bail commercial qui est prescrit dans son action en paiement d’une indemnité d’éviction perd son droit au maintien dans les lieux” (the commercial tenant whose compensation action is time-barred loses the right to remain in the premises) (Cass. 3rd civ., 12 February 2026, No. 24-10.578). Read those two sentences twice, because they destroy the most natural foreign reaction. Your landlord offers compensation, exchanges friendly emails, asks for your valuation documents, delays, reassures you, and two years pass: your money is gone, and your right to stay is gone with it, however disloyal his behavior. Promises and negotiations do not stop the clock; only a court filing, a formal acknowledgment of the right, or another statutory interrupting act does. File the protective claim first, negotiate second.

Translate this into a first-week checklist for any foreign owner who receives a congé or a renewal proposal. Day one: scan the notice, check service by commissaire de justice, the six-month timing, the stated reasons and the two-year warning, and forward everything to French counsel with the lease, amendments, rent receipts and the formal demands file. Day two: order an independent valuation of the fonds de commerce and photograph the premises, because compensation turns on market value evidence. Within the first month: answer any formal demand by curing the breach with proof of payment or performance, reply in writing to any disguised-refusal offer by reserving the compensation right, and calendar the two-year filing deadline from the notice effective date with a safety margin of several months. Never sign a transaction or a new lease under pressure without counsel, never offset disputed rent unilaterally, and never let headquarters delay the filing decision until the numbers are final: the protective summons can be filed and then stayed for expert valuation, but a late summons cannot be revived. Companies based in Paris and the Île-de-France region should note a practical point: renewal-rent and compensation disputes for Paris premises go to the specialized commercial-lease chamber of the Paris Judicial Court, the Tribunal judiciaire de Paris, where expert valuation and comparable-rent evidence dominate, so instruct a valuer who has testified there rather than a generalist from abroad.

Finally, connect the lease file to the rest of your French setup. A change of premises affects the registered office, called the siège social, recorded at the RCS and the national company register, the Guichet unique run by the INPI (the French intellectual property and companies office that now centralizes filings), your business tax, called cotisation foncière des entreprises (CFE), and your VAT establishment address. If your company was created through the standard foreign-founder path of bank account, Kbis extract (the official company identity certificate issued by the court registry, called the greffe) and VAT number, as described in our foreign-founder setup guide, then any move or closure of the premises must be mirrored in those registers within the statutory month, failing which fines and service of process at the old address follow. The lease dispute and the corporate housekeeping are one file, not two.

Conclusion

A French landlord can take back your company’s premises, but he cannot take them back cheaply, informally or late. The nine-year lease gives your business a property-like right to stay; the six-month congé served by court officer, stating its reasons and warning of the two-year action period, is the only lawful exit; and the eviction compensation at market value of the fonds de commerce is the price of every unjustified refusal. Serious breach is the landlord’s only real escape, and even that requires a compliant formal demand left uncured for a month. Disguised refusals dressed as renewal offers on new clauses fail before the Cour de cassation, rent at renewal tracks judicially controlled rental value rather than the landlord’s appetite, and short leases convert automatically into full protection if you stay past the one-month grace period. Against these shields stand two guillotines that fall on foreign tenants who wait: the two-year prescription that kills both compensation and the right to remain, running even while the landlord negotiates in apparent good faith, and the one-month cure window after a formal demand that turns a curable incident into a free eviction. The companies that win these disputes share one habit: they calendar both deadlines on day one, value the business early, pay rent under protest instead of withholding it, and file the protective court claim before negotiating the commercial outcome. If a congé is already on your desk, that habit starts today.

Need a quick opinion on your case

Our firm offers a telephone consultation within 48 hours with a lawyer of the firm, for foreign founders and companies facing a congé, a renewal dispute or an eviction compensation issue in France. Call +33 6 46 60 58 22 (Maître Reda Kohen) or write via our contact page. We assist clients in Paris and throughout the Île-de-France region, as well as foreign owners managing their French premises from abroad.