Right of Option: Key Points
Renewal is only definitive once the new rent is fixed — by agreement, court judgment, or prescription. Acceptance of the principle of renewal is always provisional. Both the landlord and the tenant hold the right of option: the landlord can refuse after offering; the tenant can renounce after requesting (Art. L. 145-57 C. com.).
The right is extinguished by agreement on the rent — even informal agreement. Accepting a renewal “at the same clauses and conditions as the expired lease” without any reservation on price has been held to extinguish the right of option for both parties (Cass. 3e civ., 15 April 2021).
Timing: can be exercised at any time before the rent is fixed; outer deadline is one month after service of the final rent-fixing judgment. A single service of the first-instance judgment starts both the appeal period and the one-month option period simultaneously — no second service is required (Cass. 3e civ., 14 January 2015).
Once exercised, the right of option is irrevocable. A landlord who exercises the option cannot use the right of repentance to reverse course. The party exercising the option must bear all costs of the prior proceedings — both parties’ fees and expert costs.
Art. L. 145-57 is not mandatory: parties can contract it out or modify the notice period by agreement. No form is required to exercise it; bailiff’s service is strongly recommended for evidential clarity. No motivation is required and no conditions or reservations may be attached.

What the Right of Option Is and Why It Exists

Article L. 145-57, al. 2 of the Code de commerce provides that within one month of the service of the final judgment fixing the new rent, the parties must draw up a new lease on the judicially determined terms — unless the tenant renounces renewal or the landlord refuses it, in which case the party who manifested their disagreement bears all procedural costs.

The right of option is the procedural expression of a deeper principle: renewal only exists definitively once the new rent is determined. The Court of Cassation has stated this clearly: acceptance of the principle of renewal is only provisional and does not prevent the landlord from subsequently refusing renewal (Cass. com., 16 May 1962). As long as the conditions of a lease are not definitively fixed, each party remains free not to commit and cannot have the lease imposed on them (Cass. 3e civ., 30 April 1969). This applies equally to the landlord who offered renewal and the tenant who requested it. Article L. 145-57 is not mandatory and the parties can contract it out of existence.

Conditions for Exercise

No Prior Agreement on the Rent

The right of option can only be exercised while there is no agreement on the new rent. Once the parties have agreed a rent — however informally — the renewal is definitively concluded and neither side can withdraw. This creates an important practical risk for tenants responding to renewal offers: accepting the principle of renewal while also accepting the proposed rent amount, or discussing charges and other terms, can be treated as an agreement that closes off the right of option. Any acceptance of a renewal offer should be limited expressly to the principle of renewal only, with no agreement on the proposed rent figure.

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Warning — Accepting “Renewal at the Same Clauses and Conditions”

A tenant who accepts a renewal offer “at the same clauses and conditions as the expired lease” and a landlord who accepts on those terms without any reservation on price have been held to have fixed the rent by agreement. The Court of Cassation confirmed in 2021 (Cass. 3e civ., 15 April 2021, n° 19-24.23) that this type of acceptance extinguishes the right of option for both parties. Similarly, a landlord who responded to a renewal request with silence (deemed acceptance) can still subsequently exercise the right of option as long as no rent has been agreed (Cass. 3e civ., 16 September 2015).

Timing: Before the Deadline

The outer time limit is one month from service of the final judgment fixing the new rent. The option can be exercised at any point before that — including during the rent-fixing proceedings or before they are even started. No specific prior act is required. The one-month period follows service of the judgment, not its filing or oral delivery. A single service of the first-instance judgment starts both the appeal period and the one-month option period simultaneously (Cass. 3e civ., 14 January 2015). During the appeal period, the right of option remains open since the rent is not yet definitively fixed. Where no action has been commenced for fixing the rent, the option can be exercised up to the expiry of the two-year prescription.

Form: No Requirements, but Serve by Bailiff

The right of option is subject to no formal requirements. It can be exercised by bailiff’s act, by a pleading in pending proceedings, or by any means that clearly manifests the party’s intention. No motivation is required and no conditions or reservations can be attached. Bailiff service is strongly recommended for evidential clarity. A tenant who, after receiving a renewal notice, serves a notice indicating they wish to vacate is treated as exercising the right of option rather than serving a formal notice (Cass. 3e civ., 16 March 2023).

Common Effects: Irrevocability and Costs

Once exercised, the right of option is irrevocable — for both landlord and tenant. A landlord who exercises the option and finds that the resulting eviction indemnity is higher than expected cannot use the right of repentance to reverse course (CA Paris, 5 January 2022). Landlords should have the eviction indemnity informally assessed before exercising the right of option. The only escape from the consequences is a subsequent agreement between the parties to renew on mutually acceptable terms.

The party who exercises the option must bear all procedural costs incurred up to that point: the opposing party’s costs, expert fees, and any costs in the prior rent-fixing proceedings. These are the costs of the concluded proceedings only — not of any subsequent proceedings for fixing the eviction or occupation indemnity (Cass. 3e civ., 16 September 2009). Exercise of the right terminates pending rent-fixing proceedings and nullifies any judgment already rendered on the rent.

Consequences Depending on Who Exercises the Option

Landlord Exercises the Option
Tenant Gets Eviction Indemnity + Right to Remain
  • Parties in same position as landlord refusing renewal with eviction indemnity offer;
  • Tenant entitled to full eviction indemnity and right to remain in occupation pending payment;
  • Occupation indemnity runs from the date of lease expiry (not from option exercise date), at market value under Art. L. 145-28, without rent-capping benefit (Cass. 3e civ., 18 January 2011);
  • Even where original lease had a turnover-based rent, occupation indemnity assessed at market value (Cass. 3e civ., 3 October 2007).
Tenant Exercises the Option
Dual Indemnity Structure (Cass. 3e civ., 16 March 2023)
  • From lease expiry to option exercise: statutory occupation indemnity at market value, under the commercial lease statute; two-year prescription under Art. L. 145-60; no precarity discount;
  • From option exercise until key handover: general law occupation indemnity (can exceed market value); five-year general prescription;
  • No notice to quit needed; vacate promptly after exercising to avoid accumulating the more onerous general law indemnity.
Practical Checklist: Before Exercising the Right of Option
Verify the option has not been extinguished: check all prior correspondence for any informal or express agreement on the rent figure, or any acceptance “at the same clauses and conditions” without rent reservation. If either party has agreed a rent — however informally — the option is already gone.
Landlords: assess the eviction indemnity before exercising: the option is irrevocable once exercised. Commission an informal valuation of the likely eviction indemnity (replacement value of the business, goodwill, relocation costs) before deciding. The right of repentance cannot rescue a landlord who has exercised the option and is then faced with a high indemnity figure.
Tenants: vacate immediately after exercising the option: from the date of option exercise, the tenant is an occupant without title under general law and owes an indemnity that can in principle exceed market value. There is no statutory protection during this period. Vacate and return the keys promptly to avoid accumulating this liability.
Budget for the costs of prior proceedings: the party exercising the option bears all costs of the concluded rent-fixing proceedings — the opposing party’s legal fees, expert fees, and court costs. Obtain a costs estimate before deciding, particularly where an expert has already been appointed and has produced a report.
Serve by commissaire de justice and keep records: no form is required, but serve the option by commissaire de justice for evidential clarity. If proceedings are underway, a procedural filing also suffices — but a standalone service creates an unambiguous record of the date of exercise, which matters for both the costs allocation and the occupation indemnity calculation.
Considering Exercising the Right of Option?

The right of option is a powerful tool — but irrevocable once used. Whether you are a landlord assessing whether to withdraw a renewal offer after seeing the proposed new rent, or a tenant deciding whether to walk away from a renewal, we advise on the financial and procedural consequences before the decision is made.

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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 on the right of option in a French commercial lease.