Shopping Centre Lease Due Diligence Checklist
Check the financing structure: if the centre is held under crédit-bail immobilier, the sub-lease is structurally precarious. Negotiate an express clause committing the credit-bailleur to take over the lease if the credit-bail ends for any reason. Without this, the tenant’s rights evaporate on default or expiry of the credit-bail.
Confirm stability of emplacement: a clause allowing the centre owner to move the unit unilaterally defeats statutory protection. The emplacement must be fixed and permanent for the commercial lease statute to apply. Verify you have management autonomy and a personal clientele.
Exclusivity is not implied: there is no implicit obligation on the landlord not to lease to competitors. If exclusivity matters to your business model, it must be expressly written into the lease. A non-competition clause binding the tenant creates no reciprocal obligation on the landlord.
No footfall guarantee without an express clause: the landlord has no implied obligation to maintain a commercially favourable environment. A commitment to maintain a specific concept, fill anchor tenant vacancies, or maintain a minimum occupancy rate must be negotiated and written in.
Verify the charges regime against Art. R. 145-35: major structural repairs, property tax (absent an express clause), management fees, and vacant unit charges cannot be passed to the tenant. Any clause doing so is deemed unwritten. Preserve all pre-contractual communications from the centre’s agents.

Does the Commercial Lease Statute Apply in a Shopping Centre?

The commercial lease statute applies to operators in shopping centres on the same conditions as elsewhere: the tenant must have a personal clientele, management autonomy, and a stable and permanent emplacement. The difficulty is that many shopping centre operators fail these tests, particularly the management autonomy requirement.

Courts have consistently denied the statute to operators who are fully subject to the centre’s opening hours, whose charges and publicity are managed entirely by the centre owner, and who have no ability to develop a relationship with customers outside the centre’s own trading environment — even where the operator manages stock, pays utilities directly, and operates under its own legal personality (Cass. 3e civ., 5 February 2003).

A clause unilaterally allowing the centre owner to move the emplacement defeats statutory protection: without stability of location, there is no statutory protection (Cass. 3e civ., 10 May 1991; CA Aix-en-Provence, 20 January 2015).

The Credit-Bail Financing Trap

Many French shopping centres are financed through crédit-bail immobilier (property leasing). The crédit-preneur — the shopping centre operator who holds the property under the credit-bail arrangement — is not the owner and does not itself hold a commercial lease. It can sub-let individual units to traders under commercial leases that carry statutory protections.

The critical risk for a sub-tenant is structural: if the credit-bail contract ends — whether through the credit-preneur’s default, a decision not to exercise the purchase option, or any other cause — the sub-tenant has no right to renewal and no eviction indemnity against the credit-bailleur. The credit-bailleur has no obligation to take over the sub-lease contracts unless there is an express clause in the sub-lease to that effect.

⚠️
Warning — Check the Financing Structure Before Signing

Before signing a commercial sub-lease in any shopping centre, establish how the centre is financed. If it is held under a credit-bail arrangement, the sub-lease is structurally precarious: the tenant’s rights evaporate if the credit-bail ends for any reason. Negotiate, before signature, a clause in the sub-lease under which the credit-bailleur commits to taking over the credit-preneur’s obligations in the event of the credit-bail’s termination.

Model clause to negotiate: “In the event of default by [credit-preneur] vis-à-vis the credit-bailleur for any reason whatsoever, or if it decides not to exercise the option at the end of the credit-bail, the credit-bailleur undertakes to take over the obligations of [credit-preneur] towards the tenant and to continue the present lease on the same terms and conditions.”

The Tenant’s Obligations: What Shopping Centre Leases Actually Require

Shopping centre leases contain some of the most restrictive clauses found anywhere in French commercial lease practice. Any commitment made in emails or commercial presentations should be preserved. Always take qualified legal advice before signing.

Destination Clause

The destination clause defines the authorised activities with great precision — specifying principal and ancillary activities and capping ancillary activities at a percentage of turnover. The landlord generally requires that all authorised activities be actually exploited. In the early years of a shopping centre’s operation, Art. L. 145-48, al. 2 C. com. restricts the tenant’s statutory right to déspécialisation plénière for nine years from the date of possession, locking the tenant in for the formative years of the centre.

Exclusivity Clause

A non-competition obligation imposed on the tenant does not carry any reciprocal obligation on the landlord to guarantee exclusivity. Only an express clause in the lease creates such an obligation for the landlord. Where an exclusivity clause does exist in favour of the tenant, the landlord is bound to ensure it is respected throughout the term (Cass. 3e civ., 28 January 2021, n° 19-18.233). The competing tenant who causes the breach commits no fault — they are operating within the limits of their own lease.

⚠️
Warning — Non-Competition Without Exclusivity

The absence of any mention of exclusivity in a shopping centre lease does not mean the landlord has an implied obligation not to let competing units. Courts have consistently refused to recognise an implicit exclusivity obligation arising from the location of the premises or from the strict activity restrictions imposed on tenants. If exclusivity matters to your business model, it must be negotiated and expressly written into the lease.

Brand (Enseigne) Clauses

Clauses requiring tenants to operate under a specific named brand have been struck down as contrary to Art. L. 145-48 C. com. (déspécialisation) and Art. L. 145-16, which renders unwritten any clause preventing assignment with the fonds de commerce (Cass. 3e civ., 12 July 2000, n° 98-21.671). A brand clause prevents full despecialisation and makes the lease effectively non-transferable to a business operating under a different brand. Landlords have moved to enseigne substitution clauses (accepting a substitute brand of equivalent notoriety), but the risk of nullity remains if the clause effectively prevents despecialisation or assignment.

Compulsory Traders’ Association Membership

Clauses requiring tenants to join and maintain membership of a traders’ association are absolutely void as contrary to freedom of association (Cass. 3e civ., 12 June 2003; Cass. 1re civ., 20 May 2010). Landlords have replaced the association with a groupement d’intérêt économique (GIE): courts have held that GIE membership is lawful when it corresponds to the purpose of the building (Cass. 3e civ., 18 December 2001). Any member of the GIE may withdraw on the conditions provided in the contract. Nullity of an association or GIE membership clause results in restitution: the tenant recovers sums paid but must return the value of services received (Cass. com., 16 September 2014).

Charges and the Triple Net Clause

Art. R. 145-35 C. com. (Pinel Act 2014) lists the charges that cannot be passed on to the tenant: major structural repairs (Art. 606 C. civ.) and related professional fees; works required by age or compliance (where they qualify as Art. 606 repairs); the contribution économique territoriale; rent management fees; and charges attributable to vacant units or other tenants. In a multi-tenant building, the lease must specify the charge allocation method and the basis for apportionment (Art. L. 145-40-2, al. 3 C. com.).

The Landlord’s Obligations: No Guarantee of Footfall

The Court of Cassation has been unequivocal: absent a specific contractual undertaking, the landlord is not obliged to maintain a commercially favourable environment. The landlord’s obligations are those in Art. 1719 C. civ.: to deliver the premises, maintain them fit for the agreed use, and ensure peaceful enjoyment throughout the term. This is an obligation of means, not of result (Cass. 3e civ., 11 May 1995; Cass. 3e civ., 21 December 2021).

A landlord who restructures the centre’s commercial concept may be liable only if the lease contained an express obligation to maintain a specific concept (e.g. “not modify the Usines Center concept”: CA Paris, 13 March 2002). Without such a clause, the landlord is free to change the centre’s direction, even to the detriment of existing tenants. The landlord is, however, liable for the condition of common areas: they must maintain sufficient upkeep, security, and access to allow tenants to operate in normal conditions (CA Paris, 16 June 1996).

💡
Practical Point — Contractualise the Landlord’s Obligations

A tenant who genuinely relies on the centre’s footfall as a condition of commercial viability should not assume any implied obligation of the landlord to maintain it. If this matters — and it almost always does in a shopping centre context — it must be expressly stipulated: a commitment to maintain a certain commercial concept, to fill anchor tenant vacancies within a defined period, or to maintain a minimum level of occupancy. Without a specific clause, courts will not read such an obligation into the general Civil Code delivery and maintenance obligations.

Variable Rent (Clause Recette): How It Works and What It Costs

Shopping centre leases include clauses recettes — variable rent clauses linking the rent to the tenant’s turnover. The structure is typically binary (loyer binaire): a guaranteed minimum rent (LMG) plus a variable element determined by a percentage of annual turnover, payable when the variable element exceeds the minimum.

Key rules now largely settled by case law:

  • Statutory rent revision does not apply to the variable component. The clause recette falls outside Art. L. 145-39 C. com. and is governed solely by the parties’ agreement (Cass. 3e civ., 5 January 1983; Cass. 3e civ., 12 June 1983). Statutory revision applies only if the lease expressly confers competence on the commercial rent judge to fix the minimum guaranteed rent at market value (Cass. 3e civ., 18 June 2002).
  • At renewal, the minimum guaranteed rent must be fixed at market value. Under the Théâtre Saint-Georges jurisprudence (Cass. 3e civ., 10 March 1993), the contractual method governs rent fixing at renewal. The Court of Cassation confirmed in two rulings of 3 November 2016 that where the judge has competence to fix the LMG at market rental value, they must do so under Art. L. 145-33 C. com. while taking into account the existence of the variable element.
  • The GLA surface is the reference for market rental value. In shopping centres, the surface used for the market value calculation is the Gross Leasing Area (GLA) — excluding common areas, wall thicknesses, and structural elements, without further weighting.
  • Property tax (taxe foncière) is a factor of reduction. Where the lease passes the taxe foncière to the tenant, this constitutes a charge transfer the judge may take into account to reduce the market rental value, even when comparable leases in the same centre also pass the tax (Cass. 3e civ., 8 April 2021; Cass. 3e civ., 8 February 2024).
  • The landlord retains the right of option even with a variable rent clause. Even in the presence of a clause recette, the landlord retains the right, in case of disagreement on the renewal rent, to refuse renewal under Art. L. 145-57 C. com. (Cass. 3e civ., 12 June 2003; Cass. 3e civ., 11 January 2006).
Practical Checklist: Before Signing a Shopping Centre Lease
Verify the credit-bail structure and negotiate the take-over clause: the single most important due diligence step in any shopping centre lease. Establish the financing structure, obtain the credit-bail contract, and negotiate the express credit-bailleur commitment to take over the sub-lease before signing.
Review the destination clause thoroughly: understand precisely which activities are authorised, which are ancillary and subject to turnover caps, and which are forbidden. Confirm the obligation to actually operate all authorised activities. The 9-year despecialisation restriction under Art. L. 145-48, al. 2 prevents a full change of activity during the formative period.
Negotiate exclusivity expressly or accept there is none: there is no implied exclusivity. If competitor proximity would materially affect your business model, ensure an express exclusivity clause is included, with clear definitions of the protected activity and the protected zone within the centre.
In a binary rent lease, model the renewal rent exposure: understand how the LMG will be fixed at renewal — whether the judge has competence, how the GLA surface will be calculated, and how the property tax transfer in the lease may reduce the market rental value. Stress-test the economics under multiple renewal scenarios before signing.
Preserve all pre-contractual communications: emails, commercial presentations, and representations by the centre’s agents may be used to establish pre-contractual obligations or to challenge lease terms. Save everything before signature. Do not rely on verbal commitments not confirmed in writing.
Negotiating a Shopping Centre Lease?

Shopping centre leases are the most complex and tenant-unfavourable documents in French commercial property. Our team advises international retailers and investors on lease review, clause negotiation, and dispute resolution.

Book a Consultation

Legal Notice. This article is for general information and educational purposes only. It does not constitute legal advice. Laws and regulations may have changed since publication. Always seek qualified French legal advice before concluding a French commercial lease.