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French Business Law

Three Year Rent Review:
A Brief Overview in French Business Law

A statutory right exists for the Landlord or the Tenant to seek a rent review at the end of each three-year period of the lease, and this review is distinct from, and over and above, any yearly indexation linked, say, to the Index of the Cost of Building Construction.

The three yearly rent review is not automatic and care must be taken to ensure that the application is made within the appropriate time frame, as applications, which are not timely, will fail simply on technical grounds.

The application must set out the rental amount, which is sought or offered, and failure to do this renders the application null and void.

In the event that one or the other party were to refuse to accept the proposed revised rental amount, then the matter may be brought, at the behest of one or both parties, before the Higher District Court (Tribunal de Grande Instance).

The principal criteria which the Court will take into account with a view to setting a revised rental amount are :

- whether or not there has been an objective material change in the local business environment

- whether or not this phenomenon is to the benefit, or the detriment, of the particular type of business considered

The Court will usually appoint and instruct an independent specialist to draw up a report, which will generally be binding upon all the parties thereafter.

The foregoing is not intended to be exhaustive and for specific information on questions flowing from the three yearly rent review, please click here  

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