A turnover rent (loyer binaire) combines a fixed part, the guaranteed minimum, and a variable part calculated on turnover. At renewal, can the commercial rent judge (juge des loyers commerciaux) set that minimum at rental value (valeur locative)? Yes where the lease so provides, answer the reported rulings of 2016 and 2018 of the Cour de cassation (the French supreme court for civil and commercial matters); not without the parties’ intention, recalls the ruling of 18 June 2026.
The facts
2016. On 2 April 2001, a company, later succeeded by an SCI (a French property-holding company), let premises in a shopping centre to two companies for ten years. Each lease provided for a minimum base rent and an additional rent of 8% of turnover; on renewal, “the base rent will be set according to the rental value” (translated from the French) and, failing agreement, by the court. The landlord asked the rent judge to set the guaranteed minimum. By two judgments of 19 February 2015, the Aix-en-Provence Court of Appeal dismissed the claims: the turnover rent clause was held incompatible with the statutory regime, and the renewed rent “can in no case exceed the rental value”.
2018. A commercial lease of 3 March 1999 provided for a rent equal to 7% of the tenant’s turnover net of VAT, with a guaranteed minimum to be set at rental value at each renewal; the parties conferred “jurisdiction on the rent judge”. For the renewal of 1 April 2012, the landlord, seeking a minimum of €200,800 a year net of VAT and charges, applied to that judge. On 19 September 2017, the Versailles Court of Appeal dismissed the claim and annulled the clause: rental value “can only be envisaged as a rent ceiling”.
2026. Under a lease of 29 September 2002, a company rented commercial premises from an SCI, for a fixed part and a variable part calculated on its turnover. It asked the commercial rent judge to set the renewed rent; on 16 May 2024, the Douai Court of Appeal dismissed its claim. Its appeal relied on the lease being subject to “all the provisions of the commercial lease statute”, on clause 4.1, which describes the base rent as a “guaranteed minimum corresponding to the rental value”, and on the clause barring, at renewals, a base rent lower than the rental value under article L. 145-33.
The decision
2016: quashed. On 3 November 2016 (Cass. 3e civ., appeals no. 15-16.826 and 15-16.827, reported), the Cour de cassation partially quashed both judgments. According to the summary published in the Bulletin, the parties “may provide for recourse to the commercial rent judge to set, at renewal, the guaranteed minimum at rental value”; the judge then applies the criteria of article L. 145-33 of the French Commercial Code, having regard in particular to the variable part due on top of the minimum, “assessing the allowance that follows from it”.
2018: quashed. On 29 November 2018 (Cass. 3e civ., appeal no. 17-27.798, reported), the Court quashed the Versailles judgment in its entirety: such a clause “does not prevent, where the contract so provides, recourse to the commercial rent judge to assess, at renewal, the rental value that determines the guaranteed minimum”.
2026: appeal dismissed. On 18 June 2026 (Cass. 3e civ., appeal no. 24-21.045, unreported), the Court dismissed the appeal. The Court of Appeal had “rightly” held that the revision of the fixed part “was governed only by the agreement of the parties” and that the rent judge could set the base rent at rental value “only if the parties had expressed that intention”; in its sovereign assessment of all the clauses, it found that the parties had not agreed to refer the rent to the rent judge.
How these rulings fit together. The 2016, 2018 and 2026 rulings point the same way: in 2016 and 2018, judicial setting of the minimum is allowed because the lease provides for it; in 2026, it is refused for lack of the parties’ intention. The reported ruling of 30 May 2024 made clear that this intention may be sought even without an express clause, in the contract or in extrinsic evidence; being later, it prevails over a strict reading of the words “where the contract so provides”. The 2026 ruling, the most recent, follows the same line: whether that intention exists is for the trial judges’ sovereign assessment (first-instance court and court of appeal).
What this changes for valuation
The first question is a legal one. In 2016 and 2018, the lease provided for recourse to the judge, expressly naming the rent judge in 2018; in 2026, neither describing the minimum as rental value, nor referring to article L. 145-33 as a floor, nor subjecting the lease to the statute was enough for the Court of Appeal to find an agreement. The valuer does not decide that question but flags it and, where the clause is silent, traces the history of the rent and its amendments. Absent the parties’ intention, the rental value serves only to negotiate or to value the property.
Rental value, then the allowance. Rental value follows the five criteria of article L. 145-33. In a shopping centre, the area used is the gross leasable area (GLA) or, where the lease is silent, the floor area, under the Charte de l’expertise en évaluation immobilière (the French property valuation charter, 6th edition, November 2025, Title III, chapter 6, § 6.3); the comparables are guaranteed minimums of similar premises. For the allowance, the report computes the expected additional rent, then compares total rent as a share of turnover with the trade’s effort rate (taux d’effort; Charte, Title III, chapter 9). The judge assesses the allowance; the report supplies the material.
Rental value is not only a ceiling. Unlike the Versailles Court of Appeal, the Court accepts that, where the contract so provides, rental value determines the guaranteed minimum. It follows, although the Court does not say so in these terms, that the total rent may exceed the rental value: a percentage of turnover with the minimum as a floor in 2018, the minimum plus a variable part in 2016. The judge only determines a fixed sum, the variable clause being carried over (2024 ruling), so the report sets out the minimum and the expected total rent separately.
Not to be confused with a fixed rent. Under a fixed-rent lease, the renewed rent follows the rent cap (plafonnement) and its exceptions. Nor is the guaranteed minimum the same as the floor clause of an indexed rent, which, according to the Court, defeats the adjustment of the rent to rental value.
What the valuer takes from it
- The judge sets the guaranteed minimum at rental value only if the parties so intended.
- The report first quotes the lease clauses; the common intention is for the trial judges to assess.
- Where the judge may set the rent, the valuer establishes the rental value under article L. 145-33, then the elements of the allowance linked to the variable part.
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 and valeur locative de renouvellement complement this article. The neighbouring points: French lease born of short-term leases: two years to set the rent, Rent uncapping: a rent fixed by settlement is enough on its own, Uncapped rent smoothing: 10% a year, the parties set the schedule and Rent paid in advance does not lower the renewal rental value. On the same theme: Single-use premises rent: no allowance for tenant improvements and Local commercial factors: a potential effect on trade is enough. The decisions are available on Légifrance: no. 15-16.826, no. 15-16.827, no. 17-27.798 and no. 24-21.045.
What next
A rent with a guaranteed minimum and a variable part, and a renewal under discussion?
I check what the lease provides on recourse to the rent judge, establish the rental value of the premises under the criteria of article L. 145-33 and quantify the elements of the allowance linked to the variable part, for the landlord as for the tenant.
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