Real Estate Law
Sep 28, 2026
360 Approach • Component 05
Terminating a
Terminating a
commercial lease.
It is also worth considering whether, given the client’s specific situation, it would be advisable to terminate the commercial lease in order to explore another way of operating the property. In some cases, it may indeed be appropriate to consider changing the operating model, shifting from a commercial lease to a long-term furnished rental, no longer through an operator but via a management agreement. This option has advantages and disadvantages, but in certain cases, this shift may prove to be a wise decision.
Commercial Lease vs. Management Agreement
In a commercial lease, the operator guarantees a fixed rent. In a management agreement, a manager rents out your property, and the rent depends on the actual occupancy. More freedom, but less guarantee of income.
The Three Steps in Terminating a Commercial Lease
Considering whether it makes sense to terminate the lease
It is important to consider whether terminating the commercial lease is appropriate given the client’s overall situation. The key is to assess the advisability of this step in light of that overall situation,
in order to determine whether or not this alternative is the best course of action. We conduct this analysis in collaboration with our partners (notary, certified public accountant, and wealth manager).
Terminating a Commercial Lease
This solution—changing the property’s use to rent it out as a long-term furnished rental—necessarily involves terminating the current commercial lease. This termination can be achieved in two ways: either through negotiation or through legal proceedings. We systematically offer both of these options to our clients, with the first generally serving as a natural prerequisite for the second.
Negotiated Approach
We engage in negotiations with the operator to obtain an
amicable termination of the lease. These negotiations may or may not involve the payment
of termination compensation, depending on the circumstances of the case and the strategy
chosen.
Legal Proceedings
If the amicable approach fails, we then file a lawsuit with the court seeking to terminate the commercial lease for breach of contract, with the aim of having the operator’s breaches of contract formally recognized and obtaining a court order for the property to be vacated.
Our Post-Release Operations Solutions
Once the commercial lease has been terminated, it is essential to ensure the leasing, operation, and management of the property. To guarantee our clients a thorough and consistent service throughout the country, we have selected approximately twenty partner service providers, chosen for the outstanding quality of their work and their ability to effectively manage the properties entrusted to them.
Commercial Lease vs. Management Agreement
Criterion
Commercial Lease
Management Agreement
Criterion
Rent
Commercial Lease
Fixed, guaranteed by the operator
Management Agreement
Varies depending on actual occupancy
Criterion
Risk
Commercial Lease
Risk of Bankruptcy of the Sole Operator
Management Agreement
Risk spread across multiple tenants
Criterion
Freedom
Commercial Lease
Mandatory lease term (9–12 years)
Management Agreement
More flexibility and freedom
Criterion
Eviction Compensation
Commercial Lease
Due if the owner refuses to renew
Management Agreement
Not applicable
Criterion
Taxation
Commercial Lease
LMNP/LMP Tax Regime
Management Agreement
LMNP Tax Regime, Subject to Certain Conditions
FAQ
Frequently Asked Questions
What is the difference between a commercial lease and a management agreement?
Under a commercial lease, the operator guarantees you a fixed rent regardless of the property’s occupancy. Under a property management agreement, a manager rents your property to tenants in your name and on your behalf; the rent collected depends on the actual occupancy rate. The property management agreement offers more freedom but less income security.
What is eviction compensation in a commercial lease?
Eviction compensation is the amount owed by the landlord to the tenant when the landlord refuses to renew a commercial lease. In principle, the amount is equal to the damages caused by the non-renewal of the lease. In certain cases—particularly when the tenant is at fault— the landlord may refuse to pay it.
How long does it take to terminate a commercial lease?
It depends on the operator’s circumstances and the approach taken. Through negotiation, a few months if the operator is cooperative. Through legal proceedings (termination for cause), the process takes longer—from 6 to 18 months, depending on the court and the strength of the case. In any case, you must have built a strong case documenting the operator’s breaches.
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