Exemption commercial lease for short-term office rentals

In the real estate sector, there are various types of contracts. For example, there are research mandates, sales mandates, but also leases for which there are sub-categories. For professionals looking to rent one or more offices for a short period of time, signing an exceptional commercial lease may be a solution to consider. What exactly is it about? This is what we invite you to discover in this article.

What is an override commercial lease?

Commonly called “precarious lease”, commercial derogatory leases can be an interesting option for those who want to rent without committing to a long period of time. Normally, a commercial lease is signed for a minimum of nine years. A precarious lease has a maximum duration of three years and no minimum term is imposed. An advantage for the tenant as well as for the owner who, therefore, do not commit themselves over a long period of time.
With an exceptional commercial lease, the rent is fixed freely and is, in addition, not capped. However, it is possible to include an indexing clause in the lease in order to avoid abusive revisions to the lease amount. When the term of three years is reached, the owner can refuse to renew the lease without having to pay eviction benefits to his tenant. For its part, the tenant wishing to terminate his derogatory lease before the term agreed in it will have to pay the rent up to the date initially planned. In concrete terms, if he signs a six-month lease, but decides to cancel it after four months, he will still have to pay the remaining two months' rent.
Note: with an exceptional commercial lease, the rents are often lower in order to compensate for the tenant's right to renewal. In addition, if the landlord agrees to renew the lease after three years, it will automatically be transformed into a traditional commercial lease.

Exemption commercial leases: for whom?

For professionals who are starting out, an exceptional commercial lease can be an interesting choice. A merchant who opens his store, for example, may ask to sign a one-year lease in order to give himself time to get started while not making a commitment over too long a period of time. Likewise, a start-up that wishes to rent one or more offices can choose this alternative synonymous with more flexibility. An exceptional commercial lease or precarious lease is therefore the ideal solution for those who start an activity without knowing if it will work and last. From self-employed workers to start-ups, there are many who have good reasons for choosing this rental contract.

Differentiate derogatory commercial lease and precarious occupancy agreement

Real estate vocabulary can sometimes be complex and it is not uncommon to confuse various terms. For example, this is the case of derogatory commercial leases and precarious occupancy agreements, which are often confused. Exemption commercial leases are subject to lease law, which is not the case with precarious occupancy agreements. The derogation lease must be for a period of less than three years while the precarious occupancy agreement can only be signed in the event of an uncertain duration of occupancy of the premises or office. In addition, with the latter, both the lessor and the occupier must be able to put an end to it without notice. Finally, the rent, or rather the fee, must be of a low amount due to the various conditions mentioned above. If the legitimacy of a precarious occupancy agreement is not proven, it will be reclassified as a classic commercial lease.

What are the differences between these two leases?

In the field of real estate, it is crucial to understand the nuances between derogatory commercial leases and precarious occupancy agreements. Exemption commercial leases are subject to legislative regulations on leases, while precarious occupancy agreements offer an alternative by escaping these constraints. A major distinction lies in the duration, since the derogatory commercial lease can last for less than three years, unlike the precarious occupancy agreement, which is ideal for uncertain periods of occupancy. A notable aspect is flexibility, as both parties have the right to end the precarious employment agreement without notice.

In financial terms, the amount of rent, or right of occupancy, must be established at a moderate level due to specific conditions. It is important to note that if the validity of a precarious occupancy agreement is questioned, it could be reclassified into a standard commercial lease. These subtleties are of paramount importance in guiding choices, allowing the parties involved in a real estate transaction to make informed decisions based on their specific needs.

In summary

Exemption commercial leases are an interesting alternative to traditional commercial leases and have various advantages: a maximum duration of three years, generally lower rents, because the tenant does not benefit from the right to renewal... The people who have every interest in signing such a lease are those who start an activity (traders, for example). If a lessor agrees to renew a derogatory commercial lease beyond three years, it automatically becomes a classic commercial lease. The law prohibits signing an override lease after a traditional commercial lease. At the end of the lease, the owner has one month to oppose the presence of his tenant if the tenant refuses to leave the premises.
Finally, leases concluded since September 1, 2014 must be subject to an incoming inventory and an outgoing inventory of fixtures. For others, an exit inventory must be carried out only if an entry inventory has been carried out.
Note: the reference text for derogatory commercial leases is article L145-5 of the Commercial Code. Do not hesitate to consult it to find out more about this particular contract.

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