The Legal 500

About the reform of property taxation - ACE

(1) The general contractor is not liable vis-à-vis third parties for damages caused by his subcontractor (2) Termination by right of a commercial lease by application of a cancellation clause implies a breach of the express obligations contained in that lease (3) A provision in a lease transferring to the lessee the cost of major repairs and of walls and roofs, must be narrowly interpreted

The liability of a deputy project owner

A deputy project owner who has been instructed bythe project owner acts in the latter’s name and on hisbehalf. Therefore, any contractual obligations arisingfrom contracts signed between a deputy projectowner - acting in the name of his principal - andcontractors are the responsibility of the project owneralone. 

A lessor cannot assert provisions of leases departing from the status of commercial leases so as to defeat the lessee’s commercial property rights

Collective negotiations.

Country Q&A France. 1. What have been the main trends in the real estate market in your jurisdiction over the last 12 months? What have been the most significant deals?

Lafe performance penalties in work contracts. The parties to works contracts can insert clauses to penalise delays in paying for works as well as the late delivery of the work.

Any promise of sale (“promesse de vente”) granted by a natural person, having as its object the sale of a building or of an interest in land, whose term of validity exceeds eighteen months, or any extension of such promise bringing its term to eighteen months, shall henceforth be memorialized in an official deed (“acte authentique”).

The regime set out in Article 210 E of the General Tax Code (SIIC III – reduced taxation on capital gains arising on disposals of real estate assets to a property company making a public issue, or approved by the AMF [the French markets authority]) is to be modified by the amending Finance Law for 2009, currently being debated, in order to include operations financed through leasing.

- Clarification on the implementation of a termination clause
- Recipient of the lessee’s notice of termination upon expiry of the lessee’s three-year period

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Upon the renewal of a commercial lease, the rent can be increased from the initial rent.

When the term of the lease is less than 9 years, pursuant to Article L. 145-34 of the Commercial Code, the rent under the renewed lease should be capped absent any significant change in any of the factors in assessing rental value (inter alia features
of the premises, local marketability factors or prices habitually practiced in the neighbourhood).

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