Short answer. Act no. 2026-403 of 26 May 2026, in force since 28 May 2026, amends five points of the French commercial lease regime and applies to leases already running: the tenant may require monthly payment of the rent (article L. 145-32-1 of the Commercial Code), the security deposit is capped at one quarter and no longer bears interest for the landlord (article L. 145-40), indexation collar clauses are validated provided they are symmetrical (article L. 145-38-1), a forfeiture clause can no longer take effect where the tenant shows he can settle the arrears and resumes paying the current rent before the first hearing (article L. 145-41), and the tenant right of first refusal on a sale of the premises is now defined by statute, excluding offices and warehouses (article L. 145-46-1). The landlord has to review his guarantees, his indexation clauses and his recovery procedure; the tenant has three new rights to exercise, and a shield against termination that he must prepare before the formal notice, not after.
A reform of the commercial lease regime does not only change the texts: it shifts the balance of power in thousands of leases already running, and it does so with no transitional period. Four months after it came into force, the questions firms receive are no longer about what the Act says but about what to do: must the landlord return part of the security deposit, can the tenant impose monthly payment in the middle of litigation, is a formal notice served in June still effective, does an indexation clause signed in 2019 hold. This article answers those questions from each party point of view, with, for each point, what to check, what to notify and what to renegotiate. The article by article analysis of the Act is in our piece on the 2026 commercial lease reform and in the practical guide that accompanies it; the commercial lease page describes the cases the firm handles.
1. What the Act changes, and what it leaves untouched
The Act of 26 May 2026 proceeds by retouching, at articles 61 to 63, without recodification. It touches neither the term of the lease, nor the capping of the renewed rent, nor the eviction indemnity, nor the right to renewal, all of which remain governed by the earlier texts; those mechanisms are dealt with in our article on renewal, rent decapping and the eviction indemnity. It does amend five points of the everyday life of a lease: the periodicity of the rent, the guarantees, indexation, termination for non payment, and the sale of the premises. Each of those points applies to leases concluded before as well as after 28 May 2026, save where a particular article says otherwise. It is that immediate application that obliges both parties to review their contracts without waiting for renewal.
2. Monthly payment: a tenant right, a landlord cash flow problem
The new article L. 145-32-1 allows the tenant of premises used for retail or wholesale trade, or for the supply of commercial or craft services, to require monthly payment of the rent in place of the quarterly payment in advance that most leases stipulate. The provision is mandatory: any clause to the contrary is deemed unwritten. The right is conditional on there being no undisputed arrears of rent or service charges, is exercised by notice to the landlord, and takes effect at the next payment date. The landlord cannot refuse, and his silence is not a refusal.
For the tenant the benefit is immediate: a quarter of rent in advance represents, for a Paris shop, several tens of thousands of euros of working capital. The notice must be given in writing with proof of receipt, after checking that no undisputed sum remains due; a tenant behind on a service charge adjustment risks a well founded refusal. Where the lease covers a mixed activity, or the premises are used as offices, the characterisation of the activity under the text must be checked before notifying, because a request outside the scope has no effect.
For the landlord, monthly payment changes the calculation of the security deposit, often expressed in multiples of a rental period, and the timetable of formal notices: non payment is now established every month, which allows earlier action but for smaller amounts. Leases already running have to be reread to identify the periodicity clauses now deemed unwritten, and billing systems adapted. A landlord who continues to invoice quarterly after a valid notice is in breach of contract.
3. Guarantees: one quarter, no more, and no interest
Article L. 145-40 as amended caps the security deposit at one quarter of the rent and forbids it bearing interest for the landlord. Where the building is sold, the deposit passes automatically to the buyer, and the other securities, a suretyship or a first demand guarantee, lapse and must be released within six months of the transfer. Return at the end of the lease follows time limits of three to six months depending on whether sums remain due.
A tenant whose lease provided for two or three periods of deposit is entitled to ask for the excess back; the request is made in writing, and a refusal opens an action for restitution before the judicial court. The tenant of a building that has been sold must check that the bank guarantee he provided has indeed been released, failing which he goes on paying for it for nothing. For the landlord, the most delicate question is aggregation: where the lease provides for a deposit and a first demand guarantee, the text does not expressly say whether the cap is assessed security by security or overall. In case of doubt, prudence suggests bringing the whole down to one quarter, or preparing a solid argument in case the tenant challenges it. Leases under negotiation must be drafted with this cap, and landlords who were counting on reinforced guarantees for fragile tenants have to look elsewhere: personal guarantees from the directors, escrow over the business, a joint liability clause on assignment.
4. Indexation: the collar clause validated, the asymmetrical clause destroyed
Article L. 145-38-1 confirms collar clauses, which confine the variation of the indexed rent between a floor and a ceiling, on two conditions: symmetry, upwards as well as downwards, and indexation to the ILC or the ILAT. The Court of Cassation had accepted such clauses subject to reciprocity (Cass. 3e civ., 1 June 2022, no. 20-17.691); the Act confirms this and fixes the sanction for asymmetry: the clause falls in its entirety, and the indexation with it, which brings the rent back to its initial amount for the period not time barred.
For the tenant this is a lever for negotiation and for litigation: a clause providing that the rent cannot go down but can rise without limit, or with a floor and no ceiling, is asymmetrical. The tenant can seek its annulment, obtain repayment of the indexation collected over the five year period not time barred, and in practice renegotiate the rent. For the landlord, auditing the indexation clauses of every lease in the portfolio is urgent: an asymmetrical clause should be corrected by a variation before a tenant challenges it, in exchange for which the landlord can obtain something. Indexation clauses tied to an index other than the ILC or the ILAT do not benefit from the statutory validation and remain subject to the earlier case law.
5. The forfeiture clause: the formal notice is no longer enough
This is the change with the heaviest consequences for litigation. Article L. 145-41 as amended makes a forfeiture clause for non payment subject to two new conditions the tenant may rely on: proof of his ability to settle the rent arrears, and resumption of payment of the current rent before the first hearing. A landlord who serves a formal notice invoking the forfeiture clause, waits the month, then applies for urgent relief to have the termination declared, now meets a tenant who resumes paying the current rent, produces a plan for settling the arrears and keeps the lease. The Court of Cassation had already held that an action to have an irregular forfeiture clause deemed unwritten is not subject to limitation (Cass. 3e civ., 19 November 2020, no. 19-20.405); the text goes further by neutralising a valid clause where the tenant shows he can pay.
For a tenant in difficulty, the strategy is prepared before the formal notice: resume paying the current rent from the first late payment, even if the arrears are unpaid, assemble the evidence of capacity to pay (cash position, financing, a sale plan, the accountant confirmation), and offer the landlord a schedule before the hearing. A tenant who arrives at the hearing without having resumed the current rent loses the benefit of the text. For the landlord, the forfeiture clause ceases to be the automatic instrument it was; he has to address solvency from the moment of the formal notice, document earlier incidents, and consider the other routes: judicial termination for serious breach, refusal of renewal for serious and legitimate cause after formal demand (article L. 145-17), or negotiating an exit. The formal notice itself has to be impeccable, because the tenant will first try to have it set aside. Formal notices served on or after 28 May 2026 fall under the new regime.
6. Sale of the premises: the right of first refusal redefined
Article L. 145-46-1 now defines the commercial or craft premises to which the tenant right of first refusal applies where the owner sells, and expressly excludes premises used exclusively as offices and warehouses. A selling landlord must notify the tenant of the price and the terms, the tenant having a period in which to accept; the Court of Cassation has set out the consequences of withdrawing the offer (Cass. 3e civ., 25 June 2026, no. 25-10.765) and the calculation of the sums due to a tenant deprived of the right (Cass. 3e civ., 23 January 2025, no. 23-18.643). For the landlord, the statutory definition makes sales of offices and warehouses safe, since they fall outside the right, but it requires a properly drawn notice for retail premises, failing which the sale is exposed to an action by the tenant. For the tenant, the right of first refusal is an opportunity to buy the premises, often at a price the market would not offer; it requires being able to finance within the period, which is prepared before the notice arrives. Proposed sales notified since 28 May 2026 fall under the new text.
7. What the landlord should do now
Auditing a lease portfolio in the light of the Act comes down to five checks: the periodicity of the rent and the handling of monthly payment notices; the amount of the guarantees held and their compliance with the cap, with restitution or regularisation; the indexation clauses, to be corrected by variation if they are asymmetrical; the recovery proceedings under way, to be reassessed in the light of the new article L. 145-41; and any planned sales, to be made safe by a compliant notice. Each check leads to an action: a letter to the tenant, a variation, a change of litigation strategy. The firm carries out that audit on the documents, lease by lease, and delivers a table of the actions to be taken with their degree of urgency.
8. What the tenant should do now
The tenant has three new rights to exercise without delay: monthly payment, restitution of the excess security deposit, and a challenge to an asymmetrical indexation clause with repayment of the indexation wrongly collected. He also has a shield against the forfeiture clause, provided he prepares it before the formal notice. Finally, if he trades in premises that may be sold, he has an interest in arranging finance for a possible exercise of the right of first refusal. The firm acts to serve these requests in proper form, quantify the restitution due, negotiate variations and, where necessary, go to court.
9. What the Act does not settle
Several questions will wait for the courts. The aggregation of guarantees under the one quarter cap. The exact scope of the ability to settle the rent arrears required to paralyse a forfeiture clause, and the position of a tenant who resumes the current rent but produces no credible plan. How monthly payment interacts with clauses requiring payment in advance. And the regime of derogatory leases and precarious occupation agreements, which the Act does not address. On each of these points, litigation strategy is being built today without any leading decision, which puts a premium on argument and on preparing the file.
Landlord or tenant, your leases changed on 28 May 2026 without you signing anything. A first conversation will identify, lease by lease, the clauses that have become ineffective, the rights to exercise and the procedures to adapt.
Frequently asked questions
Does the Act of 26 May 2026 apply to commercial leases already signed?
Yes. Save where a particular article says otherwise, the five changes have applied to leases already running since 28 May 2026: monthly payment on notice from the tenant, the cap on guarantees, validation of symmetrical collar clauses, the reinforced forfeiture clause for formal notices served since that date, and the right of first refusal for proposed sales notified since that date.
Can the tenant require to pay the rent monthly?
Yes, for retail or wholesale premises or premises used for commercial or craft services, if he has no undisputed arrears (article L. 145-32-1 of the Commercial Code). He gives notice to the landlord, who cannot object; monthly payment applies from the next payment date.
Must the landlord return part of the security deposit?
If the deposit exceeds one quarter of the rent, the tenant can ask for the excess back (article L. 145-40 as amended). The deposit no longer bears interest for the landlord, and where the building is sold the other securities lapse within six months.
Is a formal notice invoking the forfeiture clause still enough to terminate the lease?
No. Since 28 May 2026, article L. 145-41 allows the tenant to escape termination by showing his ability to settle the arrears and by resuming payment of the current rent before the first hearing. The landlord has to address the tenant solvency from the moment the formal notice is served.
Is my indexation clause still valid?
A collar clause indexed to the ILC or the ILAT is valid if it operates symmetrically upwards and downwards (article L. 145-38-1). An asymmetrical clause falls in its entirety, which allows the tenant to obtain repayment of the indexation collected over the period not time barred.
Article written by Herve Guyader, member of the Paris Bar, doctor of law. This content is general information and does not replace legal advice.