The commercial lease transfer is understood as a transmission usually against payment, from the assignor (the tenant), including its rights and obligations, to an assignee (a third party), who will substitute the tenant.
Different transfer categories
Any deed stipulating that commercial lease should be transferred to a third party is a lease sale. It is the case when, for example, a synallagmatic promise of sale melts the above conditions. It should be mentioned that the assignor is liable toward the assignee of any vice and owes him guaranty.
Regarding the input in a company, those are view as a sale, such as the dissolution or a merger with another entity. These particular cases involving society merger and input are governed by the article L. 145-16 of the commercial Code : « in the case of a society merger or in the case of input, the legal entity resulting from the merger or the beneficiary of the input is, despite any contrary disposition, substituted to the one who benefit from the lease, in regard to all the rights and obligations arising from the lease ».
If the guarantee obligation cannot be assured in the terms of the lease, any guaranty offered by the assignor or a third party can be substituted in application of a judiciary judgment.
The above reference law cases have also excluded numerous operations that cannot be considered as a sale such as the transmission of the premise to the tenant’s heir if he shall die.
Free transfer of the business by the tenant to the purchaser
There is a general rule of the common right of contracts that allows the tenant to give his lease away, as all the beneficiary of the lease can do, except in a case of a contrary clause, as long as the town’s pre-emption right is enforced. It shall be reminded that the key element of the business transfer is the clientele cession. In addition, the transfer can be done as long as no legal decision bans the activity.
In regard to the lease transfer authorizing the exercise of any activity, it can be done to the purchaser only in the way that it is used at the moment of the sale. The purchaser can change the premise’s destination only after the sale.
Finally, the sale has to be notified to the owner in order to be enforceable. It has to be done by a seizure, or has to be accepted in a legal document, in accordance with the article 1690 of the civil Code.
Limitation to the transfer right
Any clause tending to limit or prevent the lease transfer with the business is null and void. However, the article L. 145-16 of the commercial Code allows any restrictive or non prohibitive clause. In that regard, clauses which require the tenant’s authorization are valid as well as the interdependent guarantee between the assignor and the assignee.
Therefore, any sale done without respect to the initial clauses mentioned in the lease is irregular. From then on, termination of the lease can be pronounced either on the article 1184 of the civil Code basis or on the contractual legal disposals.