A significant change in local commercial factors justifies setting aside rent capping as long as it is likely to have a favorable impact on the tenant’s business activity, without the need to demonstrate an actual, measurable effect on the business carried out.

Court of Cassation, 3rd Civil Chamber, September 18, 2025, Appeal No. 24-13.288

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The Facts: A Disputed Lease Renewal

The company Expo Luminaires, specializing in the sale and display of lighting products, was leasing premises owned by Diffusion des Produits du Bâtiment.
When the lease was renewed, the landlord requested a substantial rent increase. In the absence of an agreement, the landlord brought the matter before the court, seeking to have the rent set at market value.

The Paris Court of Appeal (January 25, 2024), ruling after a previous cassation decision, upheld the landlord’s claim and lifted the cap on the rent, finding that there had been a significant change in local commercial factors.

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The Tenant’s Appeal

The tenant and its court-appointed plan administrator argued that rent uncapping could only occur if the change in local commercial factors had an actual impact on the business actually conducted on the premises.

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The Court of Cassation’s Ruling: Potentiality is enough

The 3rd Civil Chamber upheld the Court of Appeal’s reasoning, interpreting Articles L. 145-34 and R. 145-6 of the French Commercial Code:

“A significant change in local commercial factors constitutes grounds for rent uncapping if it is of a nature likely to have a favorable impact on the tenant’s actual business activity, regardless of its actual and measurable impact on the business operated in the premises.”

In other words, the law does not require proof of a concrete or quantifiable effect: it is sufficient that there be an objectively favorable potential.

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Commentary

The court may consider a change in local commercial factors as long as it is likely to benefit the tenant’s business.

Uncapping does not require strict proof of a real impact. This interpretation favors landlords, who no longer need to prove an actual effect on the tenant’s trade—a type of proof that would often be extremely difficult to establish.

In short, the Court of Cassation confirms a flexible and landlord-friendly reading of the law, shifting the debate back to the objective nature of local developments, rather than the tenant’s specific economic results.

This solution was not entirely self-evident, however, since Article R. 145-6 of the Commercial Code specifies that local factors must present an interest “for the business in question.”

By Olivier Vibert,
Partner Attorney