Office fit-out works in France: who pays, the landlord or the tenant?

Two layers of rules

The Civil Code sets the general obligations of any lease. The landlord must deliver the leased premises, maintain them in a condition fit for the use for which they were let, and ensure the tenant's quiet enjoyment (art. 1719). The landlord must deliver the premises in a good state of repair of every kind and, during the lease, carry out all repairs that may become necessary, other than tenant's repairs (art. 1720). Tenant's repairs or minor maintenance are borne by the tenant “unless otherwise agreed” (art. 1754).

For a commercial lease, the Commercial Code adds transparency rules and prohibitions: a precise and exhaustive inventory of charges (art. L145-40-2) and a list of costs that cannot be passed on to the tenant (art. R145-35).

This guide covers the commercial lease. If your offices are let under another regime, in particular a professional lease (bail professionnel), have the applicable rules checked by your adviser.

What cannot be charged to the tenant

For commercial leases entered into or renewed on or after 5 November 2014, the date of publication of Decree no. 2014-1317 of 3 November 2014 (art. 8), the following, among others, cannot be charged to the tenant (art. R145-35):

• costs relating to the major repairs referred to in article 606 of the Civil Code, together with, where applicable, the fees for carrying out those works;
• costs of works intended to remedy wear and tear or to bring the premises or the building into compliance with regulations, where they fall within those major repairs;
• the landlord's fees for managing the rents;
• in a multi-let building, the charges, taxes, levies and cost of works relating to vacant premises or attributable to other tenants.

The major repairs of article 606 are “those of the main walls and vaults, the restoration of beams and of entire roofs”, and that “of dykes and of retaining and boundary walls, also in their entirety”; “all other repairs are maintenance”.

Two qualifications written into the same article R145-35: embellishment works whose cost exceeds that of like-for-like replacement are not covered by the first two prohibitions; and compliance works are covered only where they fall within the major repairs.

The tenant's own fit-out

Partitions, finishes, networks, meeting rooms and furniture that serve your organisation are not covered by these articles: who pays for them, and any contribution from the landlord, is discussed and written into the lease. The market speaks of “Cat A” for a floor delivered ready for fit-out and “Cat B” for the tenant's fit-out; these terms are not regulatory and what they include must be checked in the lease and its annexes (see the budget of an office project).

Before any works, also check which works the lease makes subject to the landlord's consent, and within what timeframe.

What the landlord must provide

The commercial lease includes a precise and exhaustive inventory of the categories of charges, taxes and levies, with their allocation between landlord and tenant; it gives rise to an annual summary statement (art. L145-40-2).

When the lease is signed, and then every three years, the landlord provides each tenant with (art. L145-40-2):

• a forecast of the works the landlord plans to carry out over the next three years, with a provisional budget;
• a summary of the works carried out over the previous three years, with their cost.

This information is provided within two months of each three-year anniversary, and the landlord provides, at the tenant's request, any document supporting the cost of those works (art. R145-37). In a property complex with several tenants, the lease specifies how charges or the cost of works are shared between the tenants; this allocation is based on the floor area occupied (art. L145-40-2).

These obligations apply to leases entered into or renewed on or after 1 September 2014 for article L145-40-2, and on or after 5 November 2014 for articles R145-35 to R145-37.

At the end of the lease: handing the premises back

• If a schedule of condition (état des lieux) was drawn up, the tenant must return the premises as received, except for what has perished or deteriorated through wear and tear or force majeure (art. 1730 of the Civil Code).
• Without a schedule of condition, the tenant is presumed to have received the premises in a good state of tenant's repairs and must return them as such, unless proven otherwise (art. 1731).

The lease may contain reinstatement clauses for the fit-out carried out by the tenant: read them before partitioning, because they weigh on the cost of leaving.

Before signing: the questions to ask

• Was the lease entered into or renewed on or after 5 November 2014? If not, articles R145-35 to R145-37 do not apply to it: its clauses and the Civil Code should be reviewed with your adviser.
• What does the inventory of charges contain, and which works does it include?
• What is the landlord's three-year works forecast (façade, roof, shared building services)?
• In what condition is the floor handed over, and what remains to be fitted out?
• Which works require the landlord's consent, and what will have to be reinstated when you leave?

Frequently asked questions