The rental value of French commercial premises is not only a matter of square metres and references. The respective obligations of the parties are part of it, and each clause of the lease can push it up or down. Two recent decisions of the Third Civil Chamber of the Cour de cassation (the French supreme court for civil and commercial matters) draw the lines. Rent paid in advance is not, in itself, a factor that lowers the rental value. And a turnover rent (loyer binaire, a fixed rent plus a percentage of turnover) comes before the commercial rent judge only if the parties so intended.
First ruling: nine months’ rent in advance, but no reduction
A confectionery business rented premises used as a factory, shop and offices. At renewal the landlord had accepted the principle, but the parties could not agree on the rent. The tenant applied to the commercial rent judge to have it set, at a lower level, with effect from 1 October 2018. It argued that the lease required a quarterly rent payable in advance and a deposit of six months’ rent including VAT, nine months in advance in total. In its view this was an obligation going beyond the law and usual practice, which should reduce the rental value.
The Cour de cassation dismissed the appeal (Cass. 3e civ., 7 May 2025, appeal no. 23-15.394, reported). It first restated the rule: “from the point of view of the respective obligations of the parties, obligations imposed on the tenant beyond those arising from the law or usual practice, without consideration, are a factor reducing the rental value” (translated from the French; articles L. 145-33, 3°, and R. 145-8 of the French Commercial Code). It then set article L. 145-40 against it. Rent paid in advance, in whatever form and even by way of security, bears interest for the tenant’s benefit, at the rate applied by the Banque de France for advances on securities, on any sums exceeding two terms of rent. Conclusion: “Since it is matched by the landlord’s statutory obligation to pay the tenant interest at a rate fixed by law, a clause of a commercial lease requiring the tenant to pay in advance sums exceeding the rent for more than two terms does not in itself constitute a factor reducing the rental value.”
Second ruling: the turnover rent stays within the contract
A clothing retailer had occupied premises under a lease of 29 September 2002, for a rent made up of a fixed part and a variable part calculated as a percentage of turnover net of VAT. At renewal it asked the commercial rent judge to set the rent of the renewed lease, arguing that clause 4.1 of the lease defined the fixed part as “a guaranteed minimum corresponding to the rental value” (translated from the French), which gave the judge jurisdiction.
The Cour de cassation dismissed the appeal (Cass. 3e civ., 18 June 2026, appeal no. 24-21.045). The revision of the fixed part of a turnover rent “was governed only by the agreement of the parties”, and the rent judge may apply article L. 145-33 “only if the parties had expressed the intention that he should”. The Douai Court of Appeal, within its own power to interpret the lease, had found that “the parties had not agreed” to entrust the setting of the renewed rent to the judge.
What the expert takes from it
Each clause of the lease is read in the light of what is given in return. Property tax passed to the tenant without consideration reduces the rental value (Cass. 3e civ., 29 January 2026, appeal no. 24-17.227). Rent paid in advance has a statutory counterpart, the interest of article L. 145-40, and reduces nothing on its own. I therefore cannot apply a general discount “for unfavourable clauses”. I list the tenant’s obligations, set aside those that are matched by something in return, and put a figure on the others.
A turnover rent is valued in two stages. If the lease expressly ties the guaranteed minimum to the rental value of article L. 145-33, the report establishes that value. If not, the report can still assess the rental value as information for the negotiation, but it must state that the commercial rent judge has no jurisdiction to impose it. The trade-ratio method described by the Charte de l’expertise en évaluation immobilière (the French property valuation charter, 6th edition, November 2025, Title III, § 2.9) and the rent-to-turnover ratio (Title III, chapter 9) then serve to check the consistency between the fixed part, the variable part and the turnover of the premises.
References must take the same clauses into account. A rent reference agreed with a one-month deposit and another with six months in advance are comparable only once that point is neutralised, which, after the ruling of 7 May 2025, means deducting nothing. Market rental value is defined by the Charte at Title III, § 1.4, and by the European Valuation Standards 2025 at EVS 1.
Further reading
The Commercial rent and leases page describes the rental value report, its timescale and its fee. On the same theme: Rent uncapping and material change: two French rulings of 2025 and Occupation indemnity after a French commercial lease: two rulings. The decisions are available on Légifrance: 7 May 2025 and 18 June 2026.
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