5 exhaustive criteria
Art. L. 145-33: the list is exhaustive — courts and experts may not consider factors outside these five criteria
Art. R. 145-2–8
Implementation: each criterion is detailed in the regulatory articles — premises (R. 145-3), obligations (R. 145-8), commercial factors (R. 145-6)
Property tax trap
Taxe foncière transferred to tenant = mandatory downward adjustment even where all comparables also transfer it (Cass. 3e civ., 8 Feb. 2024)
Weighting
Weighted area: main zone 1.00; coefficients reduce progressively for deeper/ancillary areas; prior agreed weighting has no res judicata for next renewal

The Principle and Its Limits

Article L. 145-33 of the Code de commerce establishes that the renewed or revised rent must correspond to market rental value. In practice, this is substantially attenuated by the rent-capping rules of Article L. 145-34 — market value is only directly applied where those capping rules permit derogation (uncapping). Nonetheless, the court must always determine market rental value, even where the cap applies, because the value is needed as the reference for the capping calculation. The five criteria are identical for both revision and renewal proceedings.

Criterion 1 — Art. R. 145-3
Characteristics of the Premises
Location within the building; surface area, volume, ease of access; distribution between public-facing, operational, and ancillary areas; dimensions, configuration, adaptation to the activity; state of upkeep/deterioration; equipment provided. Maintenance assessed on the premises themselves — fault irrelevant (Cass. 3e civ., 17 Sept. 2008). Works by tenant: assessed through accession clause — end-of-tenancy accession = works excluded throughout.
Criterion 2 — Art. R. 145-4
Destination of the Premises
The contractual permitted use determines which comparable references can be used. Only references with the same or functionally equivalent authorised use are valid comparators. A narrow permitted use (e.g. shoe repair only) limits the applicable market and may reduce rental value relative to a broader clause. Assessed at the date of renewal or revision.
Criterion 3 — Art. R. 145-8
Obligations of the Parties
All obligations deviating from the normal statutory allocation are adjustments. Downward: taxe foncière borne by tenant (mandatory deduction even where all comparables do the same — Cass. 3e civ., 8 Feb. 2024); building insurance premiums; management fees; major structural repairs (pre-Nov. 2014 leases only). Upward: authorised subletting; free assignment; broad permitted use / "all activities" (+5–10%).
Criterion 4 — Art. R. 145-6
Local Commercial Factors
Proximity to public transport; foot traffic; trading profile of the street; adjacent complementary businesses. Courts also consider: parking proximity, visibility, disability access, commercial magnets. Critical: factors must be assessed relative to the activity actually carried out — a high-footfall location may be less relevant for a legal services office than for a pharmacy.
Criterion 5 — Art. R. 145-7
Prevailing Prices in the Neighbourhood
The comparables criterion. References must be the same type, genuinely comparable location, comparable activity, expressed per m² per year HT HC (ex-tax, excluding service charges). Key debate: decapitalisation of key money back into rent reference — Paris CA generally refuses decapitalisation. Turnover leases: only the fixed minimum floor rent is appropriate for comparison.

Surface Area Weighting Methodology

The weighted area (surface pondérée) is calculated by applying coefficients to different portions of the premises, reflecting their actual value to the commercial operation. The main zone method for high-street retail assigns 100% to the primary zone (typically the first 20m from the shop front), then progressively reduces the coefficient for deeper zones and service areas.

Zone / Area typeTypical coefficient
Main zone (front portion of retail ground floor)1.00
Second zone0.80
Third zone0.60
Ancillary areas attached to the premises0.20–0.40
First floor accessed via mall (shopping centre)1.00
First floor accessed only via the shop0.50
Mezzanine (structural)0.40
Peripheral retail / retail parks — ground floor1.00
Peripheral retail — ancillary attached surfaces0.20
Outdoor display areas0.10–0.30

A contractually agreed weighting is binding for the period it covers but does not bind the judge in a later renewal — a prior weighting has no res judicata effect for a subsequent proceeding (CA Paris, 19 November 2008).

Upward and Downward Adjustments

Upward adjustments (typical %)Downward adjustments (typical %)
Enclosed terrace on public highway: +2–15%Grosses réparations (Art. 606) borne by tenant: −5–10% (only pre-November 2014 leases)
Authorised subletting: +2–5%Compliance works borne by tenant: −5–10% (excluding monovalent premises)
Broad permitted use / "all activities": +5–10% (up to 10%)Taxe foncière borne by tenant: deducted at flat rate or actual amount (mandatory regardless of market practice)
Free assignment of lease right without landlord's consent: +2–5%Building insurance premiums borne by tenant: deducted at actual amount
Combined "all activities" + free assignment: cumulative effect (~+30%)Management fees borne by tenant: −5% or actual
 Accession of tenant works in favour of landlord at end of tenancy: −10–20%
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Practical Point — Property Tax and Shopping Centres

A systematic abatement for property tax must be applied even where the market comparables used are all leases that also transfer the property tax to the tenant. The Court of Cassation has confirmed this in successive rulings through to February 2024 (Cass. 3e civ., 8 February 2024, n° 22-24.268). This position regularly meets resistance from shopping centre landlords — it remains the binding rule.

Market Rental Value: Key Points
  • Five criteria are exhaustive (Art. L. 145-33): courts and experts cannot consider factors outside them. Applied identically for revision and renewal proceedings. Market value must be determined even where the capping rule means it is not directly applied as the final rent.
  • Criterion 1 — Premises characteristics (Art. R. 145-3): surface area; maintenance assessed on the premises themselves, fault is irrelevant (Cass. 3e civ., 17 Sept. 2008). Tenant's works assessed through the accession clause — end-of-tenancy accession means works are excluded from the assessment throughout the tenancy.
  • Criterion 3 — Obligations (Art. R. 145-8): property tax transferred to tenant = mandatory downward adjustment regardless of market practice (Cass. 3e civ., 8 Feb. 2024). Same for building insurance and management fees. Broad permitted use and free assignment = upward adjustments. Art. 606 grosses réparations: only a downward factor for pre-November 2014 leases.
  • Surface weighting: main zone 1.00; coefficients reduce for deeper and ancillary areas. Contractually agreed weighting is binding for the current lease only — no res judicata for the next renewal (CA Paris, 19 Nov. 2008).
  • Comparables (Criterion 5): expressed per m² per year HT HC; same type, comparable location and activity. Paris CA generally refuses decapitalisation of key money. Only fixed floor rent appropriate for comparison in turnover leases.
Reviewing or Contesting a Renewed Lease Rent?

Whether you are a landlord or tenant preparing for a renewal or revision proceeding, or challenging an expert report that has applied the wrong methodology, we advise on the application of each criterion and on the adjustment factors that are most frequently disputed.

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This article is for general information and educational purposes only. It does not constitute legal advice and does not create a lawyer-client relationship. Laws and regulations may have changed since publication. Always seek qualified French legal advice on market rental value in a French commercial lease.