The Commercial Lease :
the famous “3-6-9” (as solid as it is complex)
The advantages of signing a commercial lease:
- For the tenant: signing a commercial lease enables you to enjoy a property for a long period, even beyond the nine-year term. The tenant’s position is very strong, insofar as almost nothing can dislodge him as long as he respects the terms of the lease. At the end of the nine-year period, the lessor must pay him compensation if he wishes to leave. This indemnity is sufficiently dissuasive to force the lessor to renew the lease.
- For the owner: properly negotiating and drafting a commercial lease can enable the lessor to draw a comfortable income and build up a sustainable situation from his real estate assets. In fact, a number of charges and obligations can be contractually transferred to the lessee, thus relieving the landlord both financially and practically.
For both parties:
- It’s a gamble that can prove risky if it isn’t perfectly managed, since it’s a long-term commitment.
Whether you’re a professional or an individual, a lessee or a lessor, it’s imperative that you inform yourself about your rights. You need to protect yourself against non-performance by your co-contractor, and avoid making irreparable mistakes: indexation, revision, termination and renewal in this area are particularly complex, and full of exceptions that make their implementation risky and hazardous.
Before committing yourself (3 years for the tenant and 9 years for the owner), it may be worth considering a short-term lease. A sort of trial period…
The tenant must be careful not to let his lease exceed twelve years, as beyond that he risks being de-capped.