Commercial lease: set and revise the rent

Verified 28 May 2026 - Entreprendre Public Service / Directorate of Legal and Administrative Information (Prime Minister)

At the conclusion of the commercial lease, the amount of the rent is freely fixed by the parties. During the lease, the rent is revised according to different mechanisms. The review may take place every 3 years at the request of the owner or automatically through a sliding scale clause. In the event of a dispute over the amount of the revised rent, it is possible to refer the matter to the Commercial Lease Conciliation Commission (CCBC) and/or the President of the Judicial Tribunal.

The amount initial rent is not regulated. He is freely fixed by the parties to the contract. The owner (called landlord) is not bound by the rent of the previous tenant or by reference rents. If the lease is intended for all businesses, the rent is in principle higher than that of a lease authorizing only a defined activity.

On the other hand, when the lease is revised or renewed, the amount of the rent is regulated.

The lease agreement may provide for the payment by the tenant of other sums in addition to the rent:

The date of payment of the rent depends on what is provided for in the lease contract.

In practice, the lease generally provides that the tenant must pay the rent at the beginning of each quarter. We are talking about quarterly advance payments. Parties may also choose to pay rent at the end of the quarter or monthly at the beginning of the month or at the end of the month.

Warning  

Since the May 28, 2026, the tenant has the right to obtain the monthly payment of the rent by making a request to his landlord. This possibility applies to both the lease in progress and the lease signed or renewed from that date.

To make this request, the tenant must complete the 2 following conditions :

  • The local rented must be intended for the exercise of an activity of retail trade or wholesale trade or the provision of services of a commercial or craft nature. When the commercial lease concerns offices or warehouses, the tenant is not entitled to monthly rent payment.
  • It must be up-to-date payment of rents and charges. This means that he can apply to his landlord only if he has no late payment. On the other hand, the non-payment of rents or charges that he has already disputed does not prevent him from making the request for monthly payment.

When these conditions are met, the monthly payment is imposed on the lessor and takes effect from the payment due date following the request made to the lessor.

The step corresponds to the payment of an entrance fee paid by the tenant (called taker) to the owner (called landlord) when entering the premises.

It is not mandatory and applies to vacant premises.

The amount of the door step is freely fixed by the parties and generally corresponds to 3 or 6 months of rent.

This entry fee may be paid in one go or by installments in addition to rent. It is usually offset by a lower rent.

It is not refunded at the end of the lease.

FYI  

The amount of the step and the terms of payment must be indicated in the lease.

At the time of writing the lease contract, the landlord and tenant must decide whether the step is a rent supplement (most common case) or compensation.

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Rent supplement

In this hypothesis, the step is taken into account for the calculation of the triennial revision and for setting the rent of the renewed lease.

For the owner, it constitutes income from land.

The doorstep is subject to VAT if the rent of the lease is itself subject to it. The rent of premises equipped, i.e. equipped with furniture and equipment necessary for the operation of the tenant's activity is subject to VAT. If the lessor benefits from the exemption from VAT, it is not concerned by the declaration and payment of VAT.

For the tenant, the gateway constitutes an expense deductible from the results as a percentage of the duration of the contract (1/9e per year) provided that the rent fixed in the lease is abnormally low, i.e. significantly lower than the rental value.

Allowance

For the owner, there is no taxation.

For the tenant, the door step is not a deductible charge and it cannot be depreciated.

Please note

Doorstep is subject to the contribution on rental income (CRL) from 2.50%. It must be paid only by the owners of legal persons (i.e. businesses, associations, private law bodies, etc.) if the premises are located in a building that has been completed for at least 15 years and if the rental income is not subject to VAT.

The VAT rules on commercial rents differ depending on whether the rented premises are equipped or bare.

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Equipped premises

The owner who rents premises equipped, i.e. equipped with furniture, equipment and facilities necessary for the operation of the tenant's business (e.g. auditorium designed to receive spectators) is subject to the VAT rate equal to 20%.

If the owner benefits from the exemption from VAT, it is not concerned by the declaration and payment of VAT.

Bare Premises

The owner who rents bare premises, i.e. not equipped with equipment, furniture or equipment necessary for the operation for which they are intended, is exempt from VAT.

However, he can opt for VAT by sending a single letter to the company tax office of the location of the premises.

Who shall I contact

Please note

When renting does not give rise the actual payment of the VAT, the owner of the legal person (businesses, associations, private law bodies, etc.) must pay the contribution on rental income (CRL).

During the lease, the rent can be revised according to the triennial (legal) revision every 3 years, according to a sliding scale clause (usually annual) or according to a recipe clause.

Triennial review (legal review)

The rent can be revised at the request of the landlord (also called landlord) or the tenant (also called taker). This review is not automatic. This is a right that can be exercised even when the lease does not provide for it.

When does the triennial review take place?

The triennial rent review can be requested by the landlord or tenant in a period of 3 years after any of the following:

  • Entry of the tenant into the premises
  • Renewal of a previous lease
  • The previous revision takes effect.

The review is requested only when the 3-year period has expired (i.e. from the day after its expiry). There is no maximum time limit.

The request for a triennial review may also occur after the expiry of a period of 4 years, 5 years or more.

The request for review must be sent by act of commissioner of justice (formerly act of judicial officer) or by registered letter with acknowledgement of receipt (LRAR). It must specify the amount of rent requested.

When the tenant accepts the request for rent review, he can either write to the landlord with his agreement or do nothing and pay the new rent.

Calculation of revised rent

The triennial review shall take into account any of the following:

FYI  

The Quarterly Cost of Construction Index (CCI), which was used as a reference for the three-year commercial rent review, can no longer be used for leases entered into or renewed since September 2014.

The rules for calculating rent are different if it is the first revision or a subsequent revision.

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First revision of rent

The formula for calculating the revised rent is as follows:

Rent in progress x (last index published at the time of revision/ reference index at the time of initial fixing).

For contracts concluded or renewed since September 2014, the change in rent may not lead to an increase greater than, for a year, 10% the rent paid in the previous year.

Example :

A lease is signed on 1er october 2021 with a monthly rent of €500 based on the ILC. The first triennial review takes place at 1er October 2024.

To obtain the revised rent amount:

Rent in progress x (last index published at the time of revision/ reference index at the time of initial fixing)

= €500 x (index of 2e quarter 2024/index of 2e quarter 2021)

= €500 x (136.72 / 118.41)

= €577.31

Subsequent revisions

New requests for review may be made every 3 years.

The period starts from the moment the previously revised rent is applied.

In calculating the revised rent, the current benchmark must be taken into account on the date of the last revision.

The formula for calculating the revised rent is as follows:

Rent in progress x (last index published at the time of the revision/ benchmark at the time of the last revision).

Example :

A lease is signed on 1er october 2018 with a monthly rent of €500, based onILC.

During the 1re review in october 2021, the rent is set at €525.84.

=500 x (index of 2e quarter 2021 / index of 2e quarter 2018

= 500 x (118.41/112.59)

= €525.84

During the 2e triennial review of 1er in october 2024, the following calculation formula shall apply:

Rent in progress x (last index published at the time of the revision/ benchmark at the time of the last revision)

= Current rent x (index of 2e quarter 2024 / index of 2e quarter 2021)

= 525.84 x (136.72/118.41)

= €607.15

Uncapping of the triennial review

The three-year rent review is in principle capped, i.e. it cannot exceed the change in the commercial rent index (ILC ) or the tertiary rent index (ILAT). However, in some cases, the rent revision is uncapped: it is then set according to the rental value.

The landlord may request a rent waiver in one of the following cases:

  • Changes to local marketing factors (increase in population, new arteries, pedestrianized street, etc.) which led to an increase or decrease of more than 10% of the rental value
  • Contract clause concerning the duration of the lease
  • Change of activity (called de-specialization) in the lease made by the tenant

In these different cases, the amount of the rent can be uncapped and thus correspond to the rental value locals.

The rental value of the property takes into account the following:

  • Characteristics of the premises (location, surface, standing and layout of the premises, etc.)
  • Destination of the premises (nature and number of shops authorized by the lease, e.g. bakery)
  • Obligations of the parties, including distribution of taxes and charges of co-ownership
  • Local commercial factors
  • Prices in the neighborhood.

Warning  

The increase in rent as a result of the removal of the ceiling may not exceed, for a year, 10% the rent paid in the previous year. This is called the rent smoothing.

Scalable clause (or indexing clause)

Variation as a function of a benchmark

During the conclusion of the lease, the parties may agree on a sliding scale clause (or indexing clause), allowing the variation of the rent according to a benchmark mentioned in the contract.

The index is different depending on the activity carried out:

  • For the commercial or craft activities, this is the quarterly commercial rent index (ILC).
  • For other activities, it is the tertiary rent index (ILAT)

The construction cost index (CCI) can also be used for rent indexation as part of a sliding scale clause.

The periodicity is freely fixed by the parties to the contract. In practice, the rent review often takes place every year.

The rent is then revised automatically on the expiry date provided for in the contract, without intervention by the owner (lessor).

Warning  

For commercial leases entered into or renewed as of 28 may 2026, it is now possible to provide for tunnel indexing clause. This clause allows for a limited variation in the same proportions, both upwards and downwards, of the rent according to a reference index. Thus, the landlord and the tenant can provide that the variation in the rent related to the property cannot exceed ± 3% or ± 5%.

Protection against too high a variation of the rent

If, by means of the sliding scale clause, the rent increases or decreases by more than ¼ in relation to the price previously fixed, one of the parties may request the immediate rent review.

This request is made by registered letter with AR or by act of commissioner of justice (formerly act of judicial officer).

The judge will then set it at the rental value.

The increase may not be greater than 10% the rent paid in the previous year.

Recipe clause

The revenue clause (or variable rent clause) is a clause in the commercial lease that provides that the rent varies according to the tenant's turnover.

In addition to a variable part that corresponds to a percentage of the tenant's turnover, the rent often includes a fixed part (called Guaranteed minimum rent).

This clause is often used for premises located in shopping centers.

Where the lessor and the lessee fail to reach an agreement, either party may bring proceedings against:

  • Either the Commercial Lease Conciliation Commission (CCBC)
  • Either the president of the judicial tribunal

Referral to the Commercial Leases Conciliation Commission

In case of disagreement on the amount of the revised rent, the landlord or tenant can refer the matter to the Commercial Lease Conciliation Commission (CCBC). It is trying to reach an agreement between the parties. Its referral is free of charge.

To bring the matter before the CCBC, you have to follow the next steps :

  • Send a registered letter with acknowledgement of receipt
  • Mention the contact details of the landlord and the tenant
  • Attach the documents relating to the request (lease agreement, statement of expenses, letters, summary of the dispute and expectation of the parties...))

You must contact the Conciliation Committee of the department in which the activity is carried out.

To know the competent CCBC, you can contact the prefecture:

Who shall I contact

Please note

Referral to the Conciliation Committee is not mandatory. The parties may apply directly to the President of the court.

The Commission shall endeavor to reconcile the parties and delivers an opinion within 3 months.

If an agreement is reached on the rent of the revised lease, the Commission notes the conciliation which must receive application.

If the parties are unable to reach an agreement, the committee shall issue an opinion setting out the main points of disagreement and a reasoned rent proposal. The landlord or tenant can then refer the matter to the president of the court.

Referral to the President of the Judicial Tribunal

The matter may be referred to it either after the conciliation before the Conciliation Commission has failed or directly by one of the parties.

One party must send a written submission to the other party by registered letter with AR. The President of the court shall be seised 1 month after receipt by the tenant or the owner of the first written statement.

The landlord and tenant must be assisted by a lawyer.

Please note

During the procedure, the tenant must continue to pay the rent provided for in the lease.

The president of the judicial tribunal may refer the parties to a Mutual Agreement Hearing (MRA) held by another judge. The proceedings are then interrupted and referred to another judge who tries to reach an amicable agreement.

Warning  

When the tenant or landlord are in collective procedure, it's the Economic Activities Court (EAB) which is responsible for the following 12 cities: Avignon, Auxerre, Le Havre, Le Mans, Limoges, Lyon, Marseille, Nancy, Nanterre, Paris, Saint-Brieuc and Versailles.

Know the competent court for the procedures of prevention or treatment of difficulties

FAQ