L 145-5-1
Article L 145-5-1 of the Commercial Code — the statutory definition of the convention d'occupation précaire, introduced by the Pinel law of 2014. Codifies decades of case law: occupation authorised only by reason of circumstances independent of the sole will of the parties.
2 elements
Two cumulative elements must be present: (1) genuine fragility of the occupant's right — meaning it can be terminated at any moment; and (2) objective external circumstances justifying that fragility, existing at the date of conclusion. A label alone is never enough.
No statute
A valid convention d'occupation précaire sits entirely outside the commercial lease statute: no right of renewal, no eviction indemnity, no rent revision rules. And unlike the bail dérogatoire, it never triggers the statute through holdover — however long the occupation lasts.

What Is a Convention d'Occupation Précaire Under French Law?

The convention d'occupation précaire is defined in Art. L 145-5-1 of the Commercial Code as a convention characterised, whatever its duration, by the fact that the occupation of the premises is authorised only by reason of circumstances independent of the sole will of the parties. This statutory definition, introduced by the 2014 Pinel law, codifies the definition that the Cour de cassation had developed over decades (Cass. 3e civ. 9-11-2004 n° 1170 ; Cass. 3e civ. 29-4-2009 n° 08-13.308).

The core idea is fragility: the occupant has no legitimate expectation of a future in possession of the premises for the purpose of creating or developing a business (CA Versailles 12-1-1995 n° 94-7406). It is a contrat sui generis — neither a lease nor a prêt à usage — and falls entirely outside the commercial lease statute. The convention d'occupation précaire is also distinct from the prêt à usage governed by Arts. 1875 to 1891 of the Civil Code: the prêt à usage is essentially gratuitous (Art. 1876 C. civ.) while the convention d'occupation précaire must be onerous — some consideration, even a token amount, is required.

Distinguishing Precarious Occupation from Three Similar Conventions

Convention d'Occupation Précaire
  • No maximum duration
  • Requires objective circumstances of precariousness at conclusion
  • No right of renewal; no eviction indemnity
  • Stays outside statute even with indefinite holdover
  • Onerous (consideration required)
Bail Dérogatoire (Art. L 145-5)
  • Maximum 3 years total duration
  • No precarious circumstances required — parties simply opt out
  • Holdover beyond 3 years: statute applies automatically
  • No renewal right as such, but holdover triggers a full commercial lease
  • May be successive if not exceeding 3 years total
Bail Commercial (Arts. L 145-1 s.)
  • Minimum 9-year term
  • Right of renewal at expiry
  • Eviction indemnity if renewal refused
  • Rent revision rules apply
  • Statutory protection fully applicable

The terminology "bail précaire" is sometimes used loosely by practitioners and courts to describe both the bail dérogatoire and the convention d'occupation précaire. This ambiguity is dangerous: a bail dérogatoire triggers the commercial lease statute after three years of holdover; a genuine convention d'occupation précaire never does, even if the occupant remains for decades (C. com. Art. L 145-5-1 ; Cass. 3e civ. 25-5-1977 n° 76-10.226).

The Two Required Elements of a Valid French Precarious Occupation Agreement

Two cumulative elements must be present for a convention d'occupation précaire to be validly characterised. Both must be genuinely intended and agreed by the parties (Cass. com. 28-2-1966 n° 62-11.924): calling a contract "precarious" is not sufficient (Cass. 3e civ. 12-10-1988 n° 87-12.117).

Element 1 — Fragility of the Occupant's Right

The occupant's right must be genuinely precarious — meaning it can be brought to an end at any moment. Precariousness lies in fragility, not brevity: a convention d'occupation précaire may last for many years and still be valid provided the precarious circumstances persist throughout. Courts have upheld conventions lasting three months (Cass. 3e civ. 29-4-2009), five years (Cass. 3e civ. 16-2-2000), and even twenty years (Cass. 3e civ. 28-10-1987). Duration — whether determined or indeterminate — is not a defining indicator on its own (Cass. 3e civ. 13-5-1997 n° 95-16.735). The precariousness arises from the uncertainty about the duration, not the duration itself.

Element 2 — Objective Circumstances Independent of the Parties' Will

The precariousness must stem from circumstances independent of the sole will of the parties (Art. L 145-5-1). These circumstances must exist at the date of the convention's conclusion — not merely anticipated at some future point (Cass. 3e civ. 29-4-2009 ; Cass. 3e civ. 31-1-2012 n° 10-28.591 ; Cass. 3e civ. 7-7-2015 n° 14-11.644). A circumstance that depends exclusively on one party's decision or wish is not objective. Where the occupant himself chose to leave his commercial lease, his desire to sell his business is a circumstance depending on his own will — not an objective external factor (Cass. 3e civ. 7-7-2015 n° 14-11.644 ; CA Paris 1-12-2021 n° 20/04742). Similarly, a mere intention to buy the premises without a binding commitment or pending loan application is insufficient (CA Bordeaux 19-2-2024 n° 22/00234).

Economic Indicators Used by Courts to Detect Genuine Precariousness

Individual indicators do not suffice alone to establish precariousness, but courts assess them as a cumulative bundle of factors (faisceau d'indices). The four main indicators are:

Termination Flexibility
The ability to terminate at any time, without notice or on short notice (3–6 months), is a strong indicator. Both parties often share the termination right. Long notice periods or conditions on termination are inconsistent with precariousness (Cass. com. 20-6-1961 ; Cass. com. 10-4-1967 n° 63-11.578).
Low Rent / Modest Consideration
Rent significantly below market value is a strong indicator (Cass. com. 28-2-1966 ; Cass. 3e civ. 25-4-1990). A high rent does not automatically preclude precariousness if the parties' other intentions are unambiguous (CA Paris 4-4-2018 n° 17/14027). No maintenance obligations or charges borne by the occupant equally support precariousness.
Nature of the Premises & Access
Location inside a larger establishment (shopping centre kiosk, space in a department store), limitation to specific opening hours, or mobile/demountable installations all support precariousness (Cass. 3e civ. 9-2-1994 n° 91-16.864). Intermittent occupation — specific market days or limited hours — equally supports precariousness.
Conduct of the Parties
No commercial shopfront, no direct street access, no requirement to maintain a viable fonds de commerce, no renewal discussions — all support precariousness. Conversely, market-rate rent, a public commercial shopfront, and years of known business operation point towards a disguised commercial lease (Cass. com. 15-12-1966 n° 64-11.760).

Objective Circumstances That French Courts Accept as Legitimising Precariousness

Recognised Precarious Circumstances (illustrative list)
  • Pending expropriation proceedings (Cass. 3e civ. 12-1-1977 ; Cass. 3e civ. 6-11-1991)
  • Planned demolition or urban redevelopment (Cass. 3e civ. 14-11-2019 n° 18-21.297)
  • Planned industrial zone creation by a municipality (Cass. 3e civ. 16-2-2000)
  • Land in a dam-construction protection zone (Cass. 3e civ. 28-10-1987)
  • Pending reconstruction after fire at the occupant's own premises (Cass. 3e civ. 2-4-2003)
  • Property subject to judicial administration pending ownership litigation (CA Paris 13-1-1972)
  • Building let by liquidator pending asset disposal (Cass. 3e civ. 29-4-2009 n° 08-13.308)
  • Parcels acquired in anticipation of future quarry extension (Cass. 3e civ. 20-5-2014)
  • Occupation pending completion of a sale under a bilateral promise (Cass. 3e civ. 31-1-2012)
  • Kiosk in department store or market-day booth (shared space, limited hours)
  • Trial period for a new ancillary activity in an adjacent space (Cass. 3e civ. 9-2-2017 n° 15-18.251)
  • Occupant authorised to remain pending social housing construction (CA Paris 4-4-2018 n° 17/14027)
  • Sub-tenant remaining after main lease termination pending insolvency (CA Aix-en-Provence 13-6-2019)
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Rejected as Insufficient Precarious Circumstances

An occupant's own desire to sell their business and move out (Cass. 3e civ. 7-7-2015 ; CA Paris 1-12-2021). A retiring tenant wishing to sell their fonds de commerce. The existence of a crédit-bail contract — its outcome depends on the credit-lessee's own will (CA Lyon 23-9-2021). An intention to buy the premises without a binding avant-contrat or loan application in progress (CA Bordeaux 19-2-2024). A dépannage arrangement that lasted eleven years without ever crystallising any genuine precarious event.

Requalification Risk: When a Precarious Convention Becomes a Commercial Lease

A convention d'occupation précaire entered into for the sole purpose of evading the mandatory commercial lease statute, without a genuine objective reason for precariousness, is a disguised commercial lease (bail déguisé) and will be requalified by courts (Cass. 3e civ. 25-5-1977 n° 76-10.226). Once requalified, the landlord cannot rely on any restrictive clause in the convention: for example, a clause restricting lease assignment is null because the tenant's right to assign is protected by Art. L 145-16 C. com. (Cass. 3e civ. 1-4-2009 n° 07-21.833). If the occupant was misled into believing they had a commercial lease but the agreement was later requalified into a convention d'occupation précaire, they may claim damages for the loss of the renewal right they believed they held (Cass. 3e civ. 28-1-2021 n° 19-25.036).

Successive conventions d'occupation précaire between the same parties remain valid and do not trigger the statute as long as the conditions of precariousness remain genuinely fulfilled throughout (Cass. com. 7-5-1962 ; Cass. 3e civ. 21-3-1990). Continued occupation beyond the initial period without signing a new convention similarly leaves the statute inapplicable — provided the precarious motive genuinely persists (Cass. 3e civ. 2-4-2003 ; CA Paris 22-6-2005 n° 03-3789).

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How to Minimise Requalification Risk

In the preamble of the convention, set out in clear terms the specific circumstances that justify the precariousness — citing the precise administrative process, pending transaction, or physical characteristic of the premises that makes the occupation genuinely fragile. The preamble is the primary document courts will examine. A clause stating that the parties "intend to derogate from the commercial lease statute" is insufficient on its own and will not prevent requalification if no objective circumstances are present (Cass. 3e civ. 15-10-2014 n° 13-20.085).

No Formalism, But Writing Is Essential in Practice

The convention d'occupation précaire is not subject to any mandatory form: it may be written or verbal (Cass. 3e civ. 28-10-1987 n° 84-10.296). In the event of a dispute, proving the existence and content of a verbal convention is extremely difficult. Unlike a commercial lease of more than twelve years, even a long convention d'occupation précaire does not need to be published at the land registry (Cass. 3e civ. 19-11-2014 n° 13-20.089).

Owner's Obligations and Fire Liability

The owner under a convention d'occupation précaire does not bear the standard landlord obligations. The Art. 1719 C. civ. obligation of delivery does not apply: if the occupant suffers loss from a casualty in the premises, they must establish a specific contractual breach (Cass. 3e civ. 11-1-2024 n° 22-16.974). Obligations to carry out works necessitated by dilapidation are not binding on the owner (Cass. 3e civ. 12-6-1985 n° 84-12.214). The warranty against eviction (Art. 1719 C. civ.) also does not apply (Cass. 3e civ. 22-7-1992 n° 1258). Despite this, the occupant is subject to the presumption of liability in the event of fire under Art. 1733 C. civ. — escapable only by proving force majeure, a construction defect, or fire spread from a neighbouring property (Cass. 3e civ. 28-10-1975 ; Cass. 3e civ. 2-6-1977). This presumption does not apply where the convention was granted not by the property owner but by a tenant of the property (Cass. 3e civ. 7-7-2016 n° 15-12370). At the end of the convention, the occupant must vacate: there is no right of renewal and no right to an eviction indemnity (Cass. 3e civ. 6-11-1991 n° 1588).

Precarious Occupation vs. Commercial Lease in France: The Essentials
Statutory definition (Art. L 145-5-1): occupation authorised only by reason of circumstances independent of the parties' sole will. A contrat sui generis — outside the commercial lease statute, outside the bail de droit commun, and not a prêt à usage (which must be gratuitous).
Two cumulative required elements: (1) genuine fragility of the occupant's right — terminable at any moment; and (2) objective external circumstances justifying that fragility, existing at the date of conclusion. A label is never enough (Cass. 3e civ. 12-10-1988).
Precariousness = fragility, not brevity: conventions lasting 5 years (Cass. 3e civ. 16-2-2000) and 20 years (Cass. 3e civ. 28-10-1987) have been upheld. Duration is not the defining indicator. The precariousness arises from the uncertainty, not the duration itself.
Circumstances depending on one party's own will do not qualify: the occupant's desire to sell their business, retire, or exercise a purchase option in a crédit-bail all fail the objective external circumstances test (Cass. 3e civ. 7-7-2015).
Unlike the bail dérogatoire, the convention d'occupation précaire has no maximum duration and never triggers the statute through holdover — however long occupation lasts, provided the precarious motive genuinely persists (Art. L 145-5-1). Successive conventions remain valid.
If requalified as a commercial lease: the landlord loses all restrictive clauses. If requalified as precarious where the occupant believed they had a commercial lease: they may claim damages for loss of the renewal right (Cass. 3e civ. 28-1-2021 n° 19-25.036).
Legal regime: no formalism required but writing is essential; no land registry publication even for long durations; owner owes no standard landlord obligations (delivery, works, eviction warranty). Fire presumption (Art. 1733) applies against occupant if convention is with the owner — does not apply if the convention is with a tenant-occupant (Cass. 3e civ. 7-7-2016).
No right of renewal and no eviction indemnity at the end of the convention. To minimise requalification risk: set out the specific objective circumstances clearly in the preamble. A clause stating the parties "intend to derogate from the statute" alone is insufficient (Cass. 3e civ. 15-10-2014).
Unsure Whether Your Agreement Is Precarious or a Commercial Lease?

The qualification of a convention as precarious or commercial can turn on specific facts that are far from obvious. Both the drafting and the requalification risk require careful analysis of the objective circumstances at the date of conclusion.

Speak with a French Lawyer

This article is for general information and educational purposes only. It does not constitute legal advice. Laws may have changed since publication. Always seek qualified French legal advice before entering into, relying on, or contesting a convention d'occupation précaire.