Definition of common law lease (lease governed by the Civil Code)

The lease governed by the Civil Code is a rental contract governed by articles 1708 and following of the Civil Code. Unlike residential leases subject to strict regulations, this type of lease is essentially based on the freedom of contract for the parties.

It allows the lessor and the lessee to freely establish:

• The duration of the lease

• The amount of rent

• The termination conditions

• The specific clauses of the contract

The Civil Code rental lease is therefore not intended for the tenant’s primary residence. It applies only when the rental voluntarily or legally escapes the scope of application of the 1989 law.

In what cases to use a Civil Code lease?

The Civil Code lease is used in very specific situations, often linked to so-called "atypical" rentals.

You can resort to a common law lease particularly in the following cases:

• Secondary residence of the tenant

• Company housing

• Rental to a legal entity (company, association)

• Furnished rental for short or medium duration outside primary residence

• Temporarily occupied housing (professional mobility, mission)

In these situations, the Civil Code rental lease allows for more flexible management of your property while remaining compliant with the legal framework.

Advantages and limits of the Civil Code lease

The advantages for the property owner

The common law lease presents many benefits for an owner:

• Great contractual freedom

• Lease duration freely determined

• More flexible termination conditions

• Unregulated rent setting, even in tense areas

• Suitable for temporary or professional rentals

It is particularly appreciated in a strategy of flexible rental investment, especially in large cities.

The limits and risks to anticipate

However, the lease governed by the Civil Code also has limits:

• Possible reclassification as a residential lease if the conditions are not respected

• Less protective for the tenant, which can lead to disputes

• Strict legal drafting essential

Misuse of the Civil Code rental lease can lead to penalties, hence the need for support in professional rental management.

Obligations of the parties in a common law lease

Even though the Civil Code lease offers great freedom, certain legal obligations remain unavoidable.

Obligations of the lessor (owner)

As a property owner, you must in particular:

• Provide decent housing, suitable for the intended use

• Ensure peaceful enjoyment of the property

• Carry out the necessary major repairs

• Provide the mandatory real estate diagnostics

• Respect the clauses stipulated in the lease contract

These obligations directly stem from the Civil Code and engage your responsibility.

Obligations of the lessee (tenant)

On their side, the tenant must:

• Pay the rent and charges by the due dates

• Use the housing in accordance with its purpose

• Maintain the property and perform tenant repairs

• Return the housing in good condition at the end of the lease

The Civil Code rental lease is therefore based on a clear contractual balance between the parties.

How to draft a compliant and secure Civil Code lease?

The drafting of a lease governed by the Civil Code must never be approximate. It is a custom contract that requires particular attention.

Essential clauses to include in the contract

To secure your common law lease, certain clauses are essential:

• Precise identification of the lessor and the lessee

• Detailed description of the rented housing

• Purpose of the property (secondary residence, professional use…)

• Duration of the lease

• Rent amount and payment terms

• Security deposit

• Conditions for termination and notice

• Allocation of charges and work

These elements are essential to avoid any legal ambiguity.

Prohibited or risky clauses to avoid

Even in a Civil Code lease, certain clauses may be deemed abusive:

• Clauses infringing on the freedom of the tenant

• Waiving any future recourse

• Clauses contrary to public order

• Provisions allowing eviction without judicial decision

Poorly mastered drafting can lead to the nullity of the lease or its reclassification.

Setting the rent within a Civil Code lease

One of the main advantages of the Civil Code rental lease lies in the freedom to set the rent.

Unlike leases subject to the 1989 law:

• The rent is not capped

• Rent control does not apply

• The amount is freely set between the parties

This freedom is particularly interesting for properties located in areas of high rental demand.

Adjustment and indexing of the rent in a common law lease

The adjustment of the rent in a Civil Code lease is not automatic. It must be specifically provided for in the contract.

You can in particular:

• Provide for an annual indexing clause

• Choose the reference index (IRL, ICC, ILAT depending on use)

• Define the frequency and terms of adjustment

Without a specific clause, no rent increase can be applied during the lease.

Duration of the Civil Code lease and renewal conditions

The duration of the lease governed by the Civil Code is completely free:

• A few months

• One year

• Several years

The contract may provide for:

• Tacit renewal

• Express renewal

• An automatic end at expiration

This flexibility allows the Civil Code rental lease to be adapted to specific rental projects.

Conclusion

The lease governed by the Civil Code is a powerful tool for property owners seeking more flexibility in managing their property. When well-used, it allows for optimized rental profitability while adapting to specific situations. However, poorly drafted or misused, it can expose one to significant legal risks. Hence the importance of a clear, compliant, and well-structured Civil Code rental lease.