In France, the traditional lease contract is known as 3/6/9.
It’s a commercial contract between a landlord that owns the premises and a tenant to perform their business activity. This type of agreement is made to protect the interests of the tenant as long as they respect the terms stipulated rather than favouring the landlord. It’s thought to last for a minimum of 9 years, and it can be adopted by any type of enterprise. In case of requiring a lease for your business, it’s important to know that this model is the only choice for those whose activity is of a commercial, artisanal, or industrial nature.
WHAT ARE THE CHARACTERISTICS OF A 3/6/9 LEASE CONTRACT?
The form of the 3/6/9 contract can be either oral or written, and it’s made between the landlord and the tenant, who are entitled to establish the terms and conditions. However, it’s highly recommendable to have a written lease contract that has been drafted by a professional solicitor in case of litigation. Nevertheless, if you don’t want to use the services of a solicitor but want to make the existence of the lease contract known, it may be declared in the tax office.
The landlord needs to have an authorization stating that it’s allowed to carry out a professional activity in the premises, as well as an inventory compelling the state of the premises.
In this regard, it’s fairly easy to rent a commercial property in France.
HOW LONG DOES THE CONTRACT LAST?
As mentioned above, this type of contract is meant to last for a minimum of 9 years with a right to renew it if both parties agree. For most of the businesses, the lease contract can be terminated at the end of a three years period if the tenant requests it at least 6 months in advance.
If the tenant wants to renew the lease at the end of the 9 years period, they have to notify the landlord, and it can also be the landlord who proposes the renewal. In both cases, by means of a certified letter or a bailiff, a proposal with the new rental amount is made, and it can be either accepted, refused, or renegotiated. The landlord can only refuse it in certain cases, and if he does so, he may pay a compensation to the tenant. A tenant may also decide to terminate the contract after the first renewal, in which case he has to notify the landlord 6 months in advance coinciding with the end of the calendar quarter.
In addition, if by the end of the contract the landlord wants to sell the premises, the tenant has the priority to acquire them, although they only have a month to accept the offer.
WHAT ARE THE COSTS OF A 3/6/9 CONTRACT?
First and foremost, it’s important to know that the monthly amount is to be determined between both parties initially, although it’s normally up to the landlord to fix the price according to the rental value of the market. This amount can be reconsidered every three years, but it cannot be modified beyond the rental value limits during the initial 9 years contract, and can be revised and increased afterwards in case of renewal, depending on whether the rental value has increased, the premises have been improved, or the tenant has changed his professional activity.
It’s also normal that the tenant has to pay for the electricity, water, gas, condominium expenses, etc. as well as two months of rent in advance as security deposit.
Additionally, and even though it’s not mandatory, it’s highly recommended to sign your lease contract in front of a solicitor, whose rates in France range between € 400 and € 1,000.
As you can see, signing up a lease contract in France following this particular model is not complicated with regards to the administrative procedures and demands. However, the costs can increase in time, and it’s not easy to quit the initial agreement at any moment you wish since this type of contract represents a long term engagement. If you would like to have more flexibility in that regard, especially if you’re a starting company, you can domicile your enterprise in a business centre.