On renewal of a French commercial lease, the rent increase is in principle capped at the change in the index since the rent of the expired lease was initially set (article L. 145-34 of the Commercial Code, Code de commerce), unless one of the elements of rental value has changed materially, including the parties’ respective obligations. A landlord and a tenant in dispute over rent reviews on two leases sign two amendments (avenants) that set the rents for the period concerned and end the proceedings; in the renewal proceedings, the landlord claims rental value: are those agreements, which the summary published in the Bulletin links to a settlement (transaction, an agreement that ends a dispute), enough to set aside the cap? In a reported decision of 15 February 2018, the Third Civil Chamber of the Cour de cassation (the French supreme court for civil and commercial matters) approved the judges who saw in them a material change in the parties’ respective obligations justifying, “on its own”, uncapping (déplafonnement). For the valuer, the history of amendments becomes part of the renewal file.
The facts
On 3 June 2003, the original landlord, whose rights are now held by a property company (SCI, société civile immobilière), granted a company two commercial leases (baux commerciaux) of adjoining premises. On 17 January 2012, the landlord started proceedings to have the reviewed rents set, in other words a judicial review (révision judiciaire): the judge is asked to revise the rent while the lease is running. On 21 February 2013, the tenant started a renewal procedure for both leases from 1 April 2013, on the previous terms.
By two amendments of 7 March 2014, the parties ended the review proceedings and readjusted the rents for the period from 1 January 2012 to 31 March 2013, the day before the renewal date. The landlord then asked for the rents of the renewed leases to be set at rental value from 1 April 2013. The decision gives no rent figures.
In two judgments of 2 December 2016, the Paris Court of Appeal granted that claim. The tenant appealed to the Cour de cassation. In its view, a consensual setting of the rent, different from the rental value, by a “rent review amendment” intended to end judicial rent review proceedings, and in which “uncapping was accepted by both parties” (translated from the French), does not amount to a material change in the parties’ obligations, so that articles L. 145-34 and R. 145-8 of the Commercial Code had been breached.
The decision
The Cour de cassation dismissed the appeals (Cass. 3e civ., 15 February 2018, appeals no. 17-11.866 and 17-11.867, reported). It answered that “the Court of Appeal rightly held that the contractual setting of the rent freely agreed between the parties amounted to a waiver of the judicial rent review procedure and constituted a material change in the parties’ respective obligations occurring during the lease in circumstances outside the law and justifying, on its own, uncapping” (translated from the French). The summary published in the Bulletin cites articles L. 145-34 and R. 145-8 of the Commercial Code and refers to a contractual setting of the rent made “following a settlement” (transaction).
The freely concluded agreement on the rent amounts to a waiver of judicial review and changes the parties’ respective obligations, which are among the elements of rental value (article L. 145-33, 3°, of the Commercial Code, which the decision does not cite); made outside the statutory framework, that change is enough to set aside the cap. The answer turns neither on the level of the agreed rent, which the appeal said differed from the rental value, nor on the acceptance of uncapping which the appeal said was written into the amendment: it is the contractual setting of the rent itself that the Court treats as sufficient.
What this changes for valuation
The history of the expired lease belongs in the file. Before concluding that the cap applies, the valuer gathers the amendments, agreements and decisions made during the expired lease, with their date of signature, the period covered and the rent set. Here, the amendments had been signed after the renewal date but set the rents for a period of the expired leases; the Court of Appeal treated this as a change occurring during the lease, which the Cour de cassation repeated in its answer, the appeal not disputing that point. The article on the four ways out of the cap places this ground among the others.
A change in obligations can have other sources. On 23 January 2025, the Third Civil Chamber held that a new statutory obligation placed on the landlord during the expired lease must be taken into consideration, the trial judges, in their own assessment, having found the resulting rise in charges material (the article on the landlord’s new statutory duty). The two solutions complement each other: the change may come from the law or from the parties’ agreement; for a contractual setting of the rent that ends a judicial review, the 2018 decision treats it as sufficient on its own. A material change in the characteristics of the premises is also enough, according to the decision of 9 September 2021 on the tenant’s works.
Classification is for the judge. Whether an amendment amounts to a waiver of judicial review is a question of law. The report establishes the facts: proceedings started, agreement reached, rent before and after. Where the instructions require it, it presents the capped rent and the market rental value, so that the judge has both figures.
Once the cap is set aside, rental value is measured in full. The valuer establishes it under the criteria of article L. 145-33, by comparison, from rent references reduced to a weighted floor area (Charte de l’expertise en évaluation immobilière, the French property valuation charter, 6th edition, November 2025, Title III, § 1.4; EVS 1 of the European Valuation Standards 2025). For leases concluded or renewed since 1 September 2014, the increase is in principle phased in annual steps of 10% of the previous year’s rent (article L. 145-34, last paragraph; see the article on smoothing an uncapped rent); the decision does not address that point, the renewal at issue taking effect on 1 April 2013.
Measure before signing. An amendment that settles a review dispute may, at the next renewal, open the way to setting the rent at rental value. Parties negotiating one may have the market rental value assessed beforehand and compared with the capped rent.
What the valuer takes from it
- A contractual setting of the rent during the lease, amounting to a waiver of judicial review, is a material change in the parties’ respective obligations that justifies uncapping on its own.
- The report reconstructs the history of the expired lease: review proceedings, amendments, dates of signature, periods covered, rents set.
- The Court’s answer turns not on the level of the agreed rent but on the agreement itself, made outside the statutory framework.
- Once the cap is set aside, rental value is established by comparison from rent references.
Further reading
The Commercial rent and leases page describes the assignment and its fee. The guide Lease renewal in France: my landlord wants to uncap the rent and the glossary entries rent uncapping, material change and capped rent complement this article. The guaranteed minimum of a turnover rent and the smoothing of an uncapped rent each have their own article: Turnover rent: the judge sets the minimum if the lease says so and Uncapped rent smoothing: 10% a year, the parties set the schedule. On the same theme: New statutory duty on the landlord: a ground for rent uncapping and Commercial rent uncapping in France: four ways out of the cap. The decision is available on Légifrance.
What next
Was the rent fixed by an amendment during the lease, with renewal now approaching?
I examine the lease, its amendments and the rent review proceedings of the expired lease, then establish the renewal rental value with rent references. The report lets the landlord or the tenant discuss the renewed rent on verifiable figures.
Free quote, by email or by phone. No commitment before the quote is accepted. Fees are never linked to the value of the property (Charte de l’expertise, Title I, §2.1).
