In a shopping centre, the rent is often a turnover rent (loyer binaire: a guaranteed minimum plus a percentage of the tenant’s turnover). At renewal, the landlord asks the commercial rent judge (juge des loyers commerciaux) to set that minimum at rental value. By two twin rulings of 3 November 2016, the Cour de cassation (the French supreme court for civil and commercial matters) quashed the two judgments of the Aix-en-Provence court of appeal, which had dismissed the claim on the ground that the turnover rent clause was incompatible with the statutory regime: where the contract so provides, the judge sets the guaranteed minimum at rental value according to the criteria of article L. 145-33 of the Commercial Code, assessing the allowance that follows from the variable part. A third ruling, of 7 July 2016, settles the timetable for a commercial lease born of a short-term lease (bail dérogatoire, a lease outside the statutory regime of French commercial leases): the action to set the rent is time-barred two years after the request for application of the statutory regime, the rent being “set at rental value from the day of that request”.
The facts
In the first two cases, a property company let on 2 April 2001, for ten years, premises in a shopping centre to two retail chains. Each lease provides for a minimum base rent and an additional rent of 8 % of turnover, and states that on renewal, “within the terms and conditions arising from the legislation in force, the base rent will be set according to the rental value as determined by articles 23 to 23-5 of the decree of 30 September 1953 or any other text substituted for it”, and that “failing agreement the base rent will be set by the court according to the procedure provided for that purpose by the legislation in force”. The landlord accepts the renewal and applies to the rent judge to have the guaranteed minimum set. By two judgments of 19 February 2015, the Aix-en-Provence court of appeal dismisses the claims: the turnover rent clause is said to be incompatible with the statutory rules, since the rent of such a lease is not set according to the criteria of article L. 145-33 and may include elements outside that list, such as a percentage of turnover; the parties’ agreement would not allow that incompatibility to be set aside, and the judge could not set the renewed rent according to criteria other than those laid down by law, that rent being unable to exceed the rental value.
In the third case, the owners of a Paris shop granted a company successive short-term leases between 1 July 2006 and 1 August 2010. By registered letter of 8 September 2010, the tenant claims the benefit of the statutory regime; the owners sue it on 21 January 2011 to have the rent set. The Paris court of appeal, on 1 April 2015, declares the action time-barred, running the two-year period from the birth of the commercial lease, on 2 August 2008.
The decision
Rulings no. 1 and no. 2 (Cass. 3e civ., 3 November 2016, no. 15-16.826 and 15-16.827, reported): partially quashed, only as regards the dismissal of the claim to have the base rent set by the court, under former article 1134 of the Civil Code and article L. 145-33 of the Commercial Code. The summary published in the Bulletin restates the rule set out in the reasons: “Where they have agreed a rent made up of a variable part and a guaranteed minimum, the parties may provide for recourse to the commercial rent judge to set, at renewal, the guaranteed minimum at rental value. In that case, the judge rules according to the criteria of article L. 145-33 of the Commercial Code, in particular having regard to the tenant’s contractual obligation to pay, in addition to the minimum, a variable part, assessing the allowance that follows from it”. In dismissing the claim, “the court of appeal breached the texts referred to above”. Remitted to the Lyon court of appeal.
Ruling no. 3 (Cass. 3e civ., 7 July 2016, no. 15-19.485, reported): the Court first rejected the owners’ ground of appeal, which argued that the action to set the rent of such a lease fell under the general law of leases rather than the two-year limitation period: “the action to set the rent of the commercial lease that arises by application of article L. 145-5 of the Commercial Code is subject to the two-year limitation period of article L. 145-60 of the Commercial Code”. Then, on a ground raised of its own motion, under article L. 145-60 of the Commercial Code and article 2224 of the Civil Code, it held that “the limitation period for the action to set the rent of such a lease runs, not from the date on which the commercial lease comes into being, but from the date on which the request for application of the statutory regime is made by either party, the amount of the rent being set at rental value from the day of that request”. The action brought on 21 January 2011, “that is, less than two years after that date”, was not time-barred. Partially quashed, in so far as the judgment declared the action time-barred and held that the expert appraisal ordered at first instance could not look for the elements needed to determine the rent of the lease. Remitted to the Paris court of appeal differently composed.
What this changes for valuation
The lease clause defines the assignment. The rent judge sets the guaranteed minimum at rental value only if the contract so provides: here, a clause referring the renewed base rent to the rental value of the 1953 decree, whose criteria are now found in article L. 145-33, and to the judge failing agreement. The valuer therefore quotes the clause before any figure. Later case law has confirmed and then widened the rule: the ruling of 29 November 2018, in the article on the guaranteed minimum, the settlement and smoothing, upholds a clause of the same scope; the ruling of 30 May 2024, in the article on the rent judge and the parties’ common intention, accepts that, even without an express clause, the judge looks in the contract or in extrinsic evidence for whether the parties wanted a judicial setting at rental value. That reported ruling, later than those of 2016 and 2018, prevails over the condition, laid down in 2016, of a clause providing for recourse to the judge. The ruling of 18 June 2026, more recent still, in the article on advance rent and turnover rent, follows the same line and marks its limit: a clause describing the fixed part as a guaranteed minimum corresponding to rental value was not enough, absent a finding by the trial judges that the parties agreed to entrust the setting of the rent to the judge; the turnover rent then remains governed by the contract.
The judge sets the minimum, and the variable part falls within the criteria. The court of appeal held the turnover rent to be outside the criteria of article L. 145-33 and pointed out that the renewed rent cannot exceed the rental value. By quashing, the Cour de cassation brings the variable part within those criteria: the guaranteed minimum may be set at rental value, and the obligation to pay a variable part in addition gives rise to an allowance that the judge assesses. As the ruling of 30 May 2024 has since made clear, the judge only determines a fixed sum and does not alter the variable rent clause, which is carried over into the renewed lease. A practical consequence follows from this: minimum and variable part together, the total rent may exceed the rental value, and the allowance on the minimum reflects that additional burden.
How the valuer establishes that rental value. The criteria are those of article L. 145-33: characteristics of the premises, permitted use, the parties’ respective obligations, local commercial factors, and rents charged in the neighbourhood; the glossary entries valeur locative and valeur locative de renouvellement clarify those notions. In a shopping centre, the area used is the gross leasable area (GLA) or, where the lease is silent, the floor area (surface de plancher), as the Charte de l’expertise en évaluation immobilière (the French property valuation charter, 6th edition, November 2025, Title III, chapter 6, § 6.3) states; to this are added the position of the unit in the mall and the guaranteed minimums of neighbouring leases, distinguishing those that coexist with a variable part. To quantify the allowance, the report computes the expected additional rent, 8 % of the turnover supplied, then relates the total rent to turnover to compare it with the effort rate of the trade (taux d’effort, rent as a share of turnover; Charte, Title III, chapter 9); the assessment of the allowance rests with the judge. The guide Lease renewal in France: my landlord wants to uncap the rent describes the documents to gather.
The lease born of a short-term lease: two years, and a valuation date. Where a commercial lease arises by application of article L. 145-5, here after successive short-term leases, the action to have the rent of that new lease set is time-barred two years after the request for application of the regime, and the rent is set at rental value from that day. The valuation date (date de valeur) is therefore that of the request, here 8 September 2010 and not 2 August 2008: comparables are chosen around it, as the glossary entry date de valeur recalls. The same period of article L. 145-60 governs eviction compensation (indemnité d’éviction), as the article on the evicted tenant’s two-year time limit shows.
What the valuer takes from it
- The guaranteed minimum of a turnover rent may be set by the judge at rental value where the lease so provides; since 2024, the common intention may also be inferred from the contract or from extrinsic evidence.
- The judge sets the guaranteed minimum under the criteria of article L. 145-33 and assesses the allowance that follows from the variable part; the 2024 ruling makes clear that the judge only determines a fixed sum and that the variable clause is carried over.
- The valuer establishes the rental value of the premises by comparison, then quantifies the allowance from the turnover figures and the effort rate of the trade.
- For a lease born of a short-term lease, the action to set the rent is time-barred two years after the request for application of the statutory regime, which also fixes the valuation date.
Further reading
The Commercial rent and leases page describes the assignment, its timescale and its fee. The guide Lease renewal in France: my landlord wants to uncap the rent and the glossary entries valeur locative, valeur locative de renouvellement and date de valeur complement this article. On the same theme: Commercial rent: guaranteed minimum, settlement, 10 % smoothing and Turnover rent: the judge looks for the parties’ common intention. The decisions are available on Légifrance: no. 15-16.826, no. 15-16.827 and no. 15-19.485.
What next
A shopping-centre rent with a guaranteed minimum and a variable part, a renewal under discussion, or a commercial lease born of a short-term lease?
I establish the rental value of the premises under the criteria of article L. 145-33, quantify the allowance that reflects the variable part and date the valuation at the day the Cour de cassation retains, for the landlord, the tenant or the court-ordered appraisal.
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).
