Leasehold rights, assigning or repurchasing them without the business assets

What is the right to lease and what is it worth?

A right to occupy the premises, not ownership of the walls

The right to a lease is the right of a tenant of commercial premises to remain there and to carry out the intended business activity. It includes the remaining term of the lease and the right to renew it.

The tenant does not own the building. They own a lease. Assigning the lease means transferring this lease to a new tenant, who takes the place of the old one for the remaining term, under the same conditions.

The leasehold right is also one of the elements of a business, alongside the clientele, the brand, and the equipment. It is often the most valuable. That is why it can be sold separately.

Leasehold rights, key money, entry fee: three separate sums

The price of the leasehold interest is paid by the new tenant to the outgoing tenant. In everyday language, it is often referred to as "key money." For tax purposes, it is subject to the same rules as the transfer of leasehold interest, regardless of its name in the deed.

The entry fee, however, is paid to the landlord upon signing a new lease. The tax authorities treat it as a rent supplement, not as a transfer of lease rights. The payer, the beneficiary, and the tax treatment all change.

What gives a leasehold right its value?

A buyer pays to move into a specific location at a known rent. We always examine five elements together:

• the rent gap, because rent below the local market rate is the primary source of value;
• the remaining term, because a lease that expires in a year sells less well than a recent lease;
• the destination, because the broader the activity clause, the more potential buyers there are;
• the assignment clauses, because an assignment that is prohibited or subject to approval reduces the freedom to sell;
• the location itself, with its flow of foot traffic and neighbouring businesses.

Four of these five elements are written in the lease. That's why a leasehold right is assessed first by reading the contract, and only then on the sidewalk.

Transferring the lease alone or with the business assets

With the fund, the landlord cannot prohibit the transfer

The law protects the sale of a business. Article L. 145-16 of the Commercial Code deems null and void any clauses that prohibit the tenant from assigning their lease to the purchaser of their business or company.

The landlord retains some control over the sale. They can require the landlord's approval, their involvement in the transaction, or a notarized deed. They cannot, however, prohibit it. For this type of transaction, which also transfers the clientele and employees, see our page on lawyers specializing in the sale of businesses.

The lease alone makes the law

This protection does not apply to the transfer of the leasehold interest alone. We revert to the principle of Article1717 of the Civil Code : the tenant may transfer their lease, unless the contract prohibits it.

A clause prohibiting the transfer of the lease alone is therefore valid. The official government information sheet confirms this. In practice, many landlords include such a clause or make the transfer subject to their written consent.

Without the landlord's consent, a leasehold right subject to a prohibition cannot be sold. The price offered by the buyer is worthless until this issue is resolved.

The trap of the fake transfer of funds

Some sellers circumvent the clause by presenting the transaction as a sale of a business. The deed refers to clientele and equipment, whereas the buyer is actually opening a completely different business.

The risk is real. A business cannot exist without a clientele. If the buyer changes their business activity, the clientele is not transferred, and the transaction remains a transfer of lease rights. The landlord can then contest a transfer made in violation of the lease.

The potential consequences are serious: the transfer of ownership may be unenforceable against the landlord, the lease may be terminated, or the renewal may be refused. The new tenant then bears a risk that they often underestimated.

How do we choose between the two paths?

The choice depends on what actually happens after the signing. We ask three questions. Will the buyer take over the same business and customer base? If so, the sale of the business is possible and offers better protection to the seller.

Does the permitted use clause cover the future activity? If not, the landlord's agreement or a change of use will be required. Does the lease prohibit the sale of the premises alone? If so, negotiations with the landlord take precedence over any price discussions.

Can the landlord refuse the assignment of the lease?

Clauses to read before any negotiation

Before accepting an offer, reread the "assignment" clause in your lease. It often takes one of these forms:

• the prohibition of the transfer alone, which reserves the lease to the purchaser of the business;
• the approval clause, which requires the landlord's agreement on the new tenant, generally in writing and prior;
• the landlord's intervention in the deed, which calls upon the tenant to sign without necessarily allowing them to refuse;
• the required form, for example a notarial deed;
• the right of preference, which allows the lessor to take the place of the buyer, at the same price.

Each clause imposes a step and a deadline. Ignoring them renders the transfer unenforceable against the landlord, even if the price has been paid.

Unjustified refusal: what the Court of Cassation says

The approval clause does not give the landlord an unlimited right of refusal. The Third Civil Chamber of the Court of Cassation reiterated this on November 16, 2023 (No. 22-17.567).

The parties may make the transfer conditional upon the landlord's prior written consent. However, the tenant may obtain a court order overriding an unjustified refusal. The case concerned a transfer to the purchaser of the business.

For the assignment of the lease alone, the analysis is more specific. If the lease explicitly prohibits assignment, the landlord can refuse without cause. If it only requires approval, a refusal without serious grounds can be challenged. Everything depends on the exact wording.

Can the buyer engage in another activity?

This is the issue that causes the most sales to fail. The buyer takes over the lease as is, with its permitted use clause. A bakery doesn't become a real estate agency simply by signing a transfer agreement.

There are two options. For related or complementary activities, the tenant notifies the landlord of their intention, according to Article L. 145-47 of the French Commercial Code. For a complete change of activity, the landlord's agreement or a court order is required.

In practice, the change of use is often negotiated before the transfer, in an addendum signed by the landlord. It comes at a price: the landlord may request a rent adjustment.

The exception of retirement

One case escapes most of these restrictions. Article L. 145-51 of the Commercial Code concerns tenants who have applied to claim their retirement benefits, or who receive a disability pension.

The tenant can transfer their lease to another business. They must notify the landlord and any registered creditors of their intention, specifying the price and the new business activity. The landlord has two months to buy back the lease at that price or to take legal action in court.

If no response is received within this timeframe, their agreement is deemed to have been granted. The text also applies to the sole shareholder of a single-member limited liability company (EURL) and the majority shareholder of a limited liability company (SARL) who has held the position for at least two years, when the company is the leaseholder.

A recent clarification is important. In the case of jointly owned landlords, the two-month period only begins after each landlord has been notified, unless a specific power of attorney has been granted. The Third Civil Chamber ruled on this matter on October 15, 2026 (No. 25-11.964).

The transferor's guarantee and its time limits

A guarantee that comes from the lease

Many leases contain a joint and several guarantee clause. The assignor undertakes to pay the rent and charges if the assignee fails to do so. This guarantee is contractual in nature: it is stipulated in the lease.

For the seller, this is the most underestimated risk. He sold, he left, and two years later he receives a claim for rent from a business he no longer knows.

Three years and one month, the two limits set by law

The Pinel law of 2014 regulated this guarantee. Article L. 145-16-2 of the Commercial Code stipulates that the landlord can only invoke it for 3 years from the date of the transfer.

Article L. 145-16-1 adds a notification obligation. The landlord must inform the transferor of any unpaid rent by the transferee within one month of the date on which the sum should have been paid.

For example, a lease is assigned on March 1, 2027. The new tenant fails to pay the April 1st installment. The landlord must notify the assignor within one month, by May 1st. The landlord can no longer enforce the guarantee after March 1, 2030.

The text does not specify a penalty for a late warning. This is an argument to be made on a case-by-case basis, not an automatic release for the transferor.

What changes with the ruling of November 6, 2025

The Third Civil Chamber issued a ruling on November 6, 2025, published in the Bulletin, concerning this guarantee (No. 24-10.745). The landlord had reached a settlement with the new tenant, then sued the seller under the guarantee.

The Court ruled that a joint guarantor can invoke the settlement agreement reached between the landlord and the buyer when it provides the buyer with an advantage from which the guarantor can also benefit. The guarantor does not need to have signed the settlement agreement.

For the seller facing legal action, the first instinct is to ask if the landlord negotiated with the buyer. An agreement reached without the landlord's involvement may reduce the amount owed.

Insolvency proceedings, the clause falls through

The rule changes when the transferring tenant is in insolvency proceedings. If the liquidator assigns the lease, any clause imposing joint and several liability on the assignor with the transferee is deemed null and void (Article L. 641-12 of the French Commercial Code). Article L. 622-15 establishes the same rule in safeguard proceedings.

This rule protects struggling companies that sell their assets. It does not benefit tenants who sell outside of formal procedures, as ruled by the Court of Cassation on November 15, 2017 (Commercial Chamber, No. 16-19.131). The liquidator must, however, respect the other clauses of the lease, such as the approval process, even outside of a sale plan.

Fanny Hurreau, a partner at the firm, handles these cases. She explained the mechanisms involved in an interview on commercial leases in insolvency proceedings.

For a lease taken out in safeguard, receivership or liquidation proceedings, see also our page on lawyers specializing in commercial leases in collective proceedings.

The formalities of a transfer of lease rights

The transfer of a leasehold interest alone is not subject to the same publicity requirements as the sale of a business. There is no legal notice, no publication in the Official Bulletin of Civil and Commercial Announcements (BODACC), and no objection period. It follows its own specific steps, in this order.

Check the municipality's right of pre-emption

Within a designated area for the protection of local businesses and crafts, the municipality has priority in purchasing the lease. The transferor must submit a preliminary declaration to the mayor using the official form.

The municipality has two months to decide. Without a declaration, the sale can be cancelled. This rule is set out in Article L. 214-1 of the Town Planning Code. A call to the town hall's planning department will clear up any doubt.

Sign a written agreement, with the correct conditions

The transfer is recorded in writing, either privately or before a notary, unless the lease specifies a particular form. The document identifies the lease, sets the price, and the effective date of the transfer.

For the buyer, the agreement includes conditions precedent: the landlord's agreement, the absence of a right of first refusal, and financing. For the seller, it settles the fate of the security deposit and the allocation of expenses for the year.

Establish a property condition report

Article L. 145-40-1 of the French Commercial Code mandates a joint inventory of fixtures during the transfer of a lease. This inventory is drawn up by the landlord and the tenant, or by a third party they appoint.

This document protects the new tenant upon departure. Without it, any damage that occurred before their arrival can be held against them at the end of the lease.

Make the assignment enforceable against the landlord

The landlord only recognizes the transfer of ownership once the transfer has been formally notified to the landlord. Article 1690 of the Civil Code stipulates that notification must be served by a bailiff.

It is not required if the landlord is a party to the transaction and accepts it, or if the transfer is executed before a notary. As long as it is missing, the landlord can continue to contact the transferor.

Register the deed within one month

The deed is registered with the land registry office in the district where the property is located, within one month of signing. The notary handles this if the deed is notarized. The registration fees are paid at that time.

How much does it cost to transfer a leasehold right?

Registration fees

Article 725 of the General Tax Code subjects any transfer of lease rights to the scale for sales of business assets, set by article 719. The name given to the sum in the deed is irrelevant.

• 0% on the portion of the price up to €23,000;
• 3% on the portion between €23,000 and €200,000;
• 5% above €200,000, with a minimum collection of €25.

A leasehold right transferred for €80,000 is subject to 3% on €57,000, i.e., €1,710. At €250,000, the duties reach €5,310 on the 3% portion and €2,500 on the 5% portion, i.e., €7,810.

The buyer typically pays these fees. The agreement may stipulate a different allocation between the parties.

A price that is too low does not reduce the tax

Duties are payable on the actual market value of the transferred right if the stipulated price is lower or nonexistent. Administrative doctrine clarifies this (BOI-ENR-DMTOM-30).

Transferring a lease "for one euro" to a related company does not provide protection. The authorities can also reclassify a termination followed by a new lease if it conceals a paid transfer of occupancy rights.

The accounts between the seller and the buyer

The security deposit remains with the landlord. In practice, the new tenant reimburses it to the previous tenant in the deed, and the landlord returns it at the end of the lease to the incoming tenant.

The year's charges and taxes are allocated on a pro rata basis. The law of May 26, 2026, modified several rules governing commercial leases, including monthly rent payments and guarantees: see our article on the 2026 reform of commercial leases.

Costly mistakes and good reflexes

Three common mistakes

In lease transfers, the sticking point rarely stems from the price. It usually arises from a clause discovered after the price has been agreed upon. Three common mistakes are:

• signing a promise before reading the assignment clause, then discovering that the landlord can refuse;
• forgetting the destination clause, and paying for a location where the planned activity is not permitted;
• neglecting the meaning, so that the landlord continues to claim rent from the assignor.

Failure to comply with the terms may also lead the landlord to invoke the termination clause. We explain the mechanisms of this in our article on the termination clause and the landlord's waiver.

Four typical situations

Three concrete reflexes

• Read the entire lease before discussing the price: assignment, purpose, remaining term, joint guarantee, rent review;
• obtain the landlord's written agreement before the deed, and have them involved in the signing when possible;
• include in the deed suspensive conditions which cover approval, pre-emption and, if necessary, the new activity.

Certain clauses in your lease may also be deemed unwritten, which changes your negotiating power. We've reviewed the clauses deemed unwritten since the Pinel law.

What this article does not cover

These rules apply to commercial leases governed by the Commercial Code. Professional leases, temporary occupancy agreements, and short-term leases are subject to different rules. For these types of leases, assignment may simply be impossible.

Selling the location without taking on the risks

The price is determined by the lease

A leasehold interest sells well when its terms allow it. A lease with broad scope, no restriction on assignment, and a comfortable term attracts potential buyers. A restrictive lease requires prior negotiation with the landlord.

Safety depends on the order of the steps

Pre-emption, landlord's agreement, deed, inventory, notification, registration. Each reversed step creates a risk: a voidable sale, an unenforceable transfer, a transferor held liable longer than expected.

For a case that also involves premises, see our expertise in real estate law and commercial leases. If the transaction concerns the entire company, consult our expertise in commercial law and business assets.