Your company signed a nine-year shop or office lease in France, fitted out the premises, built a clientele, and now the landlord’s letter arrives: the lease will not be renewed. For a foreign founder, this moment is dangerous twice over. First, French commercial leases, the baux commerciaux, give the tenant a legal right to renewal or to a compensation payment, but only if strict forms and deadlines are respected. Second, everything arrives in French legal language — congé avec refus de renouvellement, indemnité d’éviction, motif grave et légitime — with traps a non-specialist cannot see. This guide explains the full sequence in English: how to check whether the landlord’s notice is even valid, the three options open to you once it arrives, how the eviction compensation is calculated, when the landlord can lawfully pay nothing, and the two-year clock that kills sleeping claims. It continues our guide to signing your first French commercial lease, and it belongs to the same project as our foreign founder setup guide.

I. Is your landlord’s refusal to renew valid and what are your three options

A. Your landlord refuses to renew your French shop or office lease: is the notice itself valid

A French commercial lease lasts at least nine years. Article L. 145-4 of the Commercial Code provides that “La durée du contrat de location ne peut être inférieure à neuf ans.” The tenant, for its part, may leave at the end of each three-year period on six months’ notice — the famous 3-6-9 rhythm. At expiry, the tenant’s default position is strong: only the owner of the business operated on the premises can claim renewal, and Article L. 145-8 of the Commercial Code requires that “Le droit au renouvellement du bail ne peut être invoqué que par le propriétaire du fonds qui est exploité dans les lieux.”

That business, the fonds de commerce, must — save for legitimate reasons — have been effectively operated during the three years before expiry. A foreign group that leaves its French premises empty for years and then claims renewal will fail this test.

Judges read the three-year operation condition with common sense but not indulgence. Forced closures, major roadworks blocking access, or a long illness of the individual operator can count as legitimate reasons for interrupted trading; a deliberate shutdown to cut costs while waiting for a better subtenant generally does not. For a foreign-owned company, the risk is practical: headquarters recalls the country manager, the shop runs on reduced hours, then closes “temporarily”, and the landlord photographs the shutters month after month. Keep dated proof of continuous operation — supplier invoices, payroll records, till reports, utility bills — for the full three years before expiry. If a closure is unavoidable, document its cause in writing at the time: a file that explains itself beats a reconstruction two years later before the court.

The landlord ends the lease only through a formal notice, the congé, served six months ahead. Article L. 145-9 of the Commercial Code states that “les baux de locaux soumis au présent chapitre ne cessent que par l’effet d’un congé donné six mois à l’avance ou d’une demande de renouvellement.” The same article sets three validity conditions that foreign tenants should check first, because a void notice changes everything. The notice must be served by an acte extrajudiciaire, meaning through a commissaire de justice, the officer formerly called huissier de justice — a simple registered letter from the landlord is not enough for a refusal. It must state the reasons for which it is given. And it must warn the tenant that any challenge or any claim for eviction compensation must be brought before the court within two years from the date for which the notice was given. The article is explicit: “Le congé doit être donné par acte extrajudiciaire. Il doit, à peine de nullité, préciser les motifs pour lesquels il est donné et indiquer que le locataire qui entend, soit contester le congé, 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.” A notice that omits the reasons or the two-year warning is void, and a void notice cannot terminate the lease.

The mirror procedure protects the tenant who wants to stay: if the landlord serves nothing, the tenant may request renewal during the six months before expiry, or at any time during the tacit extension that follows. Article L. 145-10 of the Commercial Code provides that “A défaut de congé, le locataire qui veut obtenir le renouvellement de son bail doit en faire la demande soit dans les six mois qui précèdent l’expiration du bail, soit, le cas échéant, à tout moment au cours de sa prolongation.” That request must be served by acte extrajudiciaire or by registered letter with acknowledgment of receipt, and it must reproduce the statutory paragraph below it, failing which it is void. The landlord must then answer within three months by acte extrajudiciaire, stating whether it refuses renewal and on which grounds. For a foreign tenant, the practical point is that both sides’ documents are formal acts with mandatory wording: have every notice reviewed by counsel before the deadlines run, because French courts enforce these nullities strictly.

Paris courts apply these rules to the letter. On 16 December 2025, the 18th chamber of the Paris judicial court, the tribunal judiciaire de Paris, decided case number 22/06373 between SAS Assistance & Gestion Intégrale and SCI FRA 203 (official text). The landlord had served, by bailiff’s act dated 28 November 2019, a notice refusing renewal without offering eviction compensation, invoking a serious and legitimate reason. The court found no sufficient reason at the date of the notice, recognised the tenant’s right to compensation, and ordered a court-appointed valuation: “CONSTATE l’absence de motif suffisamment grave et légitime à la date de délivrance du congé portant refus de renouvellement du contrat de bail commercial sans offre de paiement d’une indemnité d’éviction signifié à la S.A.S. ASSISTANCE & GESTION INTÉGRALE par la S.C.I. SCI FRA 203 par acte d’huissier de justice en date du 28 novembre 2019, RECONNAÎT le droit de la S.A.S. ASSISTANCE & GESTION INTÉGRALE à la perception d’une indemnité d’éviction à la suite du congé portant refus de renouvellement du contrat de bail commercial signifié par la S.C.I. SCI FRA 203 par acte d’huissier de justice en date du 28 novembre 2019, ORDONNE une expertise judiciaire”. The lesson is direct: a refusal that offers nothing and proves nothing produces compensation, not savings.

B. Accept, negotiate or sue: the three paths and the two-year clock

Once a valid refusal arrives, the official service-public guide for businesses lists three options, and each has a price. First, accept the compensation offered: the dispute ends, the tenant leaves, and the money funds the relocation. Second, negotiate a new lease: the parties may agree on a renewed lease, usually at a rent matching the rental value, which avoids both the move and the lawsuit. Third, go to court so the judge fixes the compensation. The tenant then has two years from the date for which the notice was given to seize the tribunal judiciaire, the Paris court for premises in Paris and the inner suburbs. Missing that deadline ends the right, whatever the merits.

That two-year limit is general, not specific to refusals. Article L. 145-60 of the Commercial Code provides that “Toutes les actions exercées en vertu du présent chapitre se prescrivent par deux ans.” Every action under the commercial-lease chapter expires after two years. A foreign group that parks the French file while headquarters debates strategy can discover that the debate itself destroyed the claim. The negotiation path deserves a closer look, because the renewed rent is regulated too. 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.” Failing agreement, that value is set from the premises’ characteristics, their permitted use, the parties’ respective obligations, local commerciality factors, and neighbouring rents. And Article L. 145-34 caps the increase for leases of nine years or less: “A moins d’une modification notable des éléments mentionnés aux 1° à 4° de l’article L. 145-33, le taux de variation du loyer applicable lors de la prise d’effet du bail à renouveler, si sa durée n’est pas supérieure à neuf ans, ne peut excéder la variation, intervenue depuis la fixation initiale du loyer du bail expiré, de l’indice trimestriel des loyers commerciaux”, the ILC commercial-rent index published by INSEE. A landlord who demands double rent at renewal without a notable change in the premises, the neighbourhood, or the lease obligations is asking for something the court will not grant.

Choosing among the three paths is a business calculation done under legal constraint. Accepting makes sense when the offered sum covers the real loss and the company wanted to move anyway. Negotiating makes sense when the location drives the turnover — a flagship store, a restaurant with a licence tied to the address, offices next to a key client. Suing makes sense when the offer is derisory or zero and the file proves a valuable business. In all three cases, keep trading normally and keep the premises insured and maintained: ceasing to operate the business hands the landlord the very argument examined below, and the compensation follows the value of a living business, not a closed one.

II. How much eviction money can a foreign tenant claim and when does the landlord pay nothing

A. How the eviction compensation is calculated: business value, removal costs and transfer duties

The compensation is not a fixed number of months’ rent. Article L. 145-14 of the Commercial Code provides that “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 same article 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, sauf dans le cas où le propriétaire fait la preuve que le préjudice est moindre.” Three blocks, then: the market value of the business as the profession values it, plus normal removal and reinstallation costs, plus the transfer taxes and duties for buying an equivalent business — unless the landlord proves the loss is smaller, for example because the tenant was already closing down.

In practice the judge does not guess; an independent valuer measures. The Paris Court of Appeal illustrated the full sequence on 10 October 2024, decision number 22/17985, SARL L’Auberge du Cyrano against SCI FELA 116 (official text). The landlord had served a refusal on 25 February 2020, ending the restaurant lease on 31 August 2020. The tenant asked the court to suspend the notice, order renewal, and order its return to the premises. The court rejected thoseheadline demands but held that, absent serious and legitimate reasons, the refusal opened the right to compensation with the right to stay until payment, and appointed an expert to value it: “Dit qu’en l’absence de motifs graves et légitimes, le refus de renouvellement délivré le 25 février 2020 a ouvert droit au profit de la société L’AUBERGE DU CYRANO à une indemnité d’éviction et au maintien dans les lieux aux conditions et clauses du bail expiré jusqu’au paiement de l’indemnité d’éviction ; Avant dire droit au fond sur le montant de l’indemnité d’éviction et sur les intérêts s’y rapportant, tous droits et moyens des parties demeurant réservés à cet égard, désigne en qualité d’expert” a named valuer with a full mission to visit the premises, collect the documents, and price the loss. Two teachings for a foreign tenant. First, renewal itself is rarely ordered; money is the remedy, so the fight is about valuation evidence — accounts, turnover, footfall, comparable sales of businesses in the same street. Second, the tenant stays until paid, which funds the negotiation: the landlord cannot recover the premises for free while the expert works.

That right to stay is statutory, not judicial generosity. Article L. 145-28 of the Commercial Code provides that “Aucun locataire pouvant prétendre à une indemnité d’éviction ne peut être obligé de quitter les lieux avant de l’avoir reçue. Jusqu’au paiement de cette indemnité, il a droit au maintien dans les lieux aux conditions et clauses du contrat de bail expiré.” Until the compensation is paid, the tenant remains under the expired lease terms, paying an occupation rent set under the rent sections. A landlord who changes the locks or cuts the utilities to force an early exit commits a separate wrong, actionable in urgent proceedings before the same court. Interest on the compensation runs from the legal starting point the expert and the court will set, which is why the valuation mission in both Paris decisions expressly covers interest alongside principal.

B. When the landlord lawfully pays nothing: serious and legitimate reason after formal warning

The right to compensation has exceptions, and landlords invoke them in almost every dispute. Article L. 145-17 of the Commercial Code allows the landlord to refuse renewal without any compensation where it proves a serious and legitimate reason against the outgoing tenant: “Le bailleur peut refuser le renouvellement du bail sans être tenu au paiement d’aucune indemnité : 1° S’il justifie d’un motif grave et légitime à l’encontre du locataire sortant.” Unpaid rent, chronic late payment, unauthorised subletting or change of use, and shutting the business without serious reason are the classic examples. But the statute adds a lock that kills most hasty refusals: where the complaint is non-performance of an obligation or unjustified shutdown of the business, the breach can only be invoked if it continued or recurred more than one month after the landlord served formal warning to stop it. That warning must itself be served by acte extrajudiciaire, state the reason, and reproduce the statutory paragraph, failing which it is void: “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. 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”. A landlord who never warned, or warned by ordinary letter, or warned without the mandatory wording, cannot use the tenant’s breach to avoid paying.

The Paris decisions above show how courts test the reason at the date of the notice, not with hindsight. In the Auberge du Cyrano case, the appeal court found an absence of serious and legitimate reasons and opened the compensation right. In the Assistance & Gestion Intégrale case, the court expressly recorded the absence of a sufficiently serious and legitimate reason on the day the bailiff served the refusal, even though the landlord had offered nothing. Foreign tenants should read this as an evidence rule: the landlord must prove a real, documented breach that survived a valid warning. Late payment cured immediately after warning, minor works done without authorisation but harming nobody, or a temporary closure during roadworks will rarely qualify. Conversely, a tenant with months of unpaid rent who ignored a proper warning has little to gain from litigation, and the money is better spent negotiating an orderly departure timetable.

Two further no-compensation cases exist and rarely concern foreign-owned shops or offices: demolition of an insanitary building officially declared unsafe, and, with compensation mechanics of their own, reconstruction or reallocation of accessory residential rooms. Where the landlord rebuilds, it may avoid payment by offering equivalent replacement premises suited to the tenant’s needs. Where none of these exceptions applies, the refusal produces compensation, the tenant stays until paid, and the expert values the business. The foreign founder’s file for counsel is therefore short: the lease and its amendments, every notice and warning with proof of service, the rent payment history, the accounts for three years, and photographs proving continuous operation. With those five items, a lawyer can say within days whether the refusal is an opportunity or a defeat.

The valuation procedure itself costs money and time, which shapes settlements. The claimant usually advances the expert’s provision, fixed by the court, and the final judgment allocates costs; the mission covers principal and interest, as both Paris decisions show. Most files settle once the expert’s preliminary figures land, because both sides can finally price the risk. A foreign owner should therefore budget for eighteen to thirty months from notice to payment in a contested case, keep the business visibly operating throughout, and use the maintien dans les lieux as intended: not as a way to stay forever, but as paid time to relocate well or to negotiate a fair cheque.

Conclusion

A landlord’s refusal to renew a French commercial lease is the start of a procedure, not the end of the business. Check the notice first: six months, served by commissaire de justice, with reasons and the two-year warning, failing which it is void. Then choose among accepting, negotiating a renewed rent at rental value, or suing within two years — all actions under the chapter expire after that period. If you sue, the compensation equals the proven loss: market value of the business, removal and reinstallation costs, transfer duties, unless the landlord proves a smaller loss, and you stay in the premises until paid. The landlord escapes payment only with a serious and legitimate reason documented through a valid prior warning. For a foreign company run from abroad, the discipline is the same as at signing: no deadline is indicative, every mandatory formality counts, and early advice costs a fraction of a lost nine-year location.

Need a quick opinion on your case

Get a phone consultation within 48 hours with a lawyer from the firm. Call +33 6 46 60 58 22 or write through the contact page. We assist foreign companies in Paris and across Île-de-France, in English, from the review of the refusal notice and the renewal request to the eviction valuation and the hearing before the Paris court.