Exit inventory in commercial leases: costing and recovering the reinstatement

The return of commercial premises is the moment when the landlord discovers the real cost of the use it authorised: partitions pierced, services altered, signage removed without making good the façade, technical rooms left out of service. Between the handover of the keys and re-letting, each week of vacancy weighs on the yield of the asset, and Law No. 2026-403 of 26 May 2026 on simplifying economic life now confines the return of the security deposit to a period of three months from the handover of the keys, less only sums that are duly justified. In other words: the time the landlord has to record, cost and document the reinstatement is constrained by law. This guide deals with the tenant's exit from the standpoint of the institutional landlord: building the evidence through the exit inventory (état des lieux de sortie), costing the chargeable amount by distinguishing damage from wear and tear, deducting from the security deposit in the proper form, and recovering the balance.

The exit inventory: an evidential instrument, not a formality

What Article L. 145-40-1 of the French Commercial Code requires

Arising from Law No. 2014-626 of 18 June 2014, known as the Pinel Law, Article L. 145-40-1 covers two moments: taking possession and the return of the premises. Inventories in commercial leases are therefore not confined to the entry. The text requires the inventory to be drawn up jointly and amicably by the landlord and the tenant or by a third party appointed by them. Failing that, it is drawn up by a bailiff (huissier de justice), on the initiative of the more diligent party, with costs shared equally between the landlord and the tenant. The text in force still uses that title.

Two practical consequences for a property department. First, the statutory equal sharing of costs neutralises the cost argument: nothing justifies forgoing the record because the tenant refuses to fund it. Second, the initiative lies with the more diligent party, which in practice means the landlord, since the tenant no longer has any economic interest in documenting the condition of the premises it is leaving.

The sanction on the negligent landlord: loss of a presumption

The last paragraph of L. 145-40-1 is precise in its scope:

A landlord who has not taken all steps to have the inventory drawn up may not invoke the presumption of Article 1731 of the Civil Code.

This is a loss of a presumption, not the nullity of the notice nor a forfeiture of the action for reinstatement of the commercial premises. Article 1731 of the Civil Code provides that, in the absence of an inventory, the tenant is presumed to have received the premises in good condition as regards tenant's repairs, and must return them in that condition, unless proved otherwise. The negligent landlord therefore loses that evidential comfort, but remains able to act on the basis of Article 1732 of the Civil Code, having to establish the damage by other means. What exactly the notion of all steps covers is a matter for the courts' assessment: written summons of the tenant for a specific date, a reminder, referral to a professional authorised to draw up a record in case of default, are the elements found in well-kept files. The consequences for the landlord of the absence of a joint instrument are developed in our article on the inventory in commercial leases.

The converse reading deserves emphasis for internal decisions: a landlord who has had the record made and holds an entry inventory stands on the ground of Article 1730, far more favourable than that of the presumption.

An obligation not listed in Article L. 145-15

Article L. 145-15, in the wording resulting from Law No. 2026-403, deems unwritten clauses that defeat the right to renewal and Articles L. 145-4, L. 145-32-1, L. 145-37 to L. 145-41, the first paragraph of L. 145-42 and Articles L. 145-47 to L. 145-54. Article L. 145-40-1 does not appear there. Article L. 145-40, on the security deposit, does appear, and the novelty of 2026 lies in the addition of the reference to L. 145-32-1. This asymmetry structures the negotiation: the security deposit regime is locked down, that of the inventory is not locked to the same degree, which leaves room for careful contractual drafting of the return arrangements (notice of summons, scope of the record, appointment of the professional, handover of plans and certificates of compliance of the installations).

The case of the derogatory lease

Article L. 145-5 allows the parties to depart from the statute on condition that the total term of the lease or successive leases does not exceed three years. The same article requires an inventory on taking possession of the premises and on their return, jointly and amicably, failing which by a bailiff (huissier de justice) with costs shared equally. The evidential reasoning developed below therefore also applies to short occupations, often the worst documented in practice (pop-up stores, precarious ground-floor occupations).

The exit timeline seen as a decision calendar

The handover of the keys has become the starting point of a statutory period. The organisation of the exit must therefore be planned in advance, and not treated as a property management task after departure.

• Three to six months before expiry: technical pre-visit of the premises, retrieval of the entry inventory, of the amendments and of the works authorisations given during the lease, identification of the fit-out carried out by the tenant.
• Written summons of the tenant to the exit inventory, at a fixed date and time, with a reminder of the equal sharing of costs if a professional is used.
• Day of return: exhaustive joint record, dated photographs, meter readings, inventory of equipment, check of technical installations, express mention of reservations and disputed items.
• Handover of the keys, by hand or by registered letter with acknowledgement of receipt to the landlord or its agent: this is the event that triggers the three-month period of Article L. 145-40.
• In the following days: consultation of contractors, obtaining of quotes, preparation of a costed joint statement of account, formal notice to the tenant.

Where the tenant refuses to attend or abandons the premises without returning the keys, a pre-trial evidence-gathering measure remains available under Article 145 of the French Code of Civil Procedure. Note the procedural point: since Decree No. 2025-619 of 8 July 2025, applicable to proceedings commenced from 1 September 2025, where the measure of inquiry concerns a building, the court of the place where the building is situated has sole jurisdiction. The applicant no longer has the choice between the court hearing the merits and that of the place of execution in that situation. For a national portfolio managed from Paris, the application must be made locally, failing which several weeks may be lost on a plea of lack of jurisdiction. On the legitimate-ground condition and the conduct of such a measure, see our analysis of summary expert-appointment proceedings (référé-expertise) before a property or construction dispute.

Lastly, where the tenant remains in the premises pending payment of the eviction indemnity, Article L. 145-28 provides that no tenant entitled to claim an eviction indemnity can be compelled to leave the premises before having received it, and that it is entitled to remain in the premises on the terms and clauses of the expired lease, the occupation indemnity being determined in accordance with sections 6 and 7, taking into account all relevant factors. The actual exit, and therefore the exit inventory, is then postponed to the actual vacation of the premises: the costing of the reinstatement must be assessed at that date, and not at the date of expiry of the lease.

Costing the reinstatement: the 1730, 1732, 1755 framework

The foundation: the entry/exit comparison

Article 1730 of the Civil Code is the basis for costing where an entry inventory exists: if an inventory has been drawn up between the landlord and the tenant, the tenant must return the property as received, in accordance with that inventory, except for what has perished or been damaged through wear and tear or force majeure. The chargeable cost is therefore a differential, item by item, between two descriptions. The quality of the costing depends directly on the granularity of the entry inventory: a two-page document recording premises in good general condition does not allow a serious discussion of the replacement of a technical floor or the repair of an air-handling unit.

The burden of proving absence of fault lies on the tenant

Article 1732 usefully reverses the debate: the tenant is liable for damage or loss occurring during its occupation, unless it proves that it occurred without its fault. Once the differential is established, it is for the tenant to show the non-culpable origin of the defect. This mechanism explains the importance of dating records: a defect that appeared after the handover of the keys, in vacant premises under the landlord's custody, no longer falls within the tenant's occupation.

Mandatory deductions: wear and tear, force majeure, major repairs

Three limits frame the statement of account and must be built in from the internal costing, failing which the statement loses its credibility before the judge.

Article 1755 provides that none of the repairs deemed to be tenant's repairs is chargeable to tenants where they are caused only by wear and tear or force majeure. A floor covering at the end of its life after a long occupation is not charged to the tenant as damage.

Article 1754 lists the tenant's repairs or minor maintenance for which the tenant is liable, unless there is a clause to the contrary: the list is default, and in a commercial lease the contractual stipulation largely prevails. Hence the value of a precise maintenance and return clause, drafted by trade rather than by general formula.

Article R. 145-35 of the French Commercial Code, applicable to contracts concluded or renewed from 5 November 2014, prohibits charging to the tenant expenditure relating to major repairs referred to in Article 606 of the Civil Code as well as expenditure relating to works intended to remedy wear and tear or to bring the leased property into compliance, where they fall within those major repairs. This is the limit not to be crossed: a reinstatement statement that in reality funds a technical upgrade of the building is exposed to a frontal challenge on all of its items.

The fate of fit-out carried out by the tenant

The costliest question at the end of a lease is not that of damage, but that of fit-out works authorised during the lease: mezzanines, heavy partitioning, dedicated services, load transfers. Two bases intersect. On the one hand, the lease stipulations, providing either for the fit-out to accrue to the landlord at the end of the lease, or for restoration to the original state at the tenant's expense. On the other, Article 555 of the Civil Code, which gives the owner of the land the choice between retaining ownership of the constructions and works, or requiring their author to remove them, the removal then being carried out at the author's expense and without any indemnity to it; if the owner prefers to retain them, it must, at its choice, reimburse either a sum equal to the increase in value of the land, or the cost of the materials and the price of labour assessed at the date of reimbursement.

The interplay between an accrual clause without indemnity and Article 555 is a matter for case law and calls for caution: no provision of the statute governs it. In practice, the institutional landlord must decide before the handover of the keys, not after, because the option exercised determines both the amount claimed and the re-letting timetable. Keeping a fit-out suited to market demand may be worth more than a complete strip-out charged to the tenant and then refinanced as capex for the incoming tenant.

Deducting from the security deposit: the new regime of Article L. 145-40

A three-month return period since the law of 26 May 2026

Article L. 145-40, in the wording resulting from Article 62 of Law No. 2026-403 of 26 May 2026, now provides:

Sums paid by way of security by the tenant are returned to it within a reasonable period not exceeding three months from the handover of the keys, by hand or by registered letter with acknowledgement of receipt, to the landlord or its agent, less, where applicable, sums remaining due to the landlord and sums for which the landlord may be liable in place of the tenant, provided that they are duly justified.

The requirement is twofold: a maximum period, and justification of the deductions. An internal statement not backed by documents does not constitute justification. The practice to secure consists in producing, within the period, the exit inventory, the entry inventory, contractors' quotes and, where the works have already been commissioned, the corresponding invoices, as well as the final statement of rent account (rents, charges, chargeable taxes, occupation indemnity where applicable).

The article adds, for the premises referred to in Article L. 145-32-1, that is, premises intended for retail or wholesale trade or for commercial or craft services, that the sums paid by way of security may not exceed the amount of the rents due for one quarter, as may the value of property, securities, undertakings and guarantees of any kind required to ensure proper performance of the lease, and that these sums do not bear interest in favour of the tenant. The wording of the text limits this cap to those premises: any extension to offices or warehouses calls for verification.

In the event of a transfer, with or without consideration, of the leased premises, the obligation to return the sums paid by way of security passes to the new landlord; the transfer automatically renders lapsed the guarantees of any kind referred to in the second paragraph and obliges the transferor to return the related documents to the tenant and to carry out the necessary releases within six months. A point to build into any acquisition documentation for a let asset: the return liability follows the asset.

The transitional provisions of Article 62 II

They must not be mixed up. The quarterly cap, arising from the second paragraph of 4° of I, applies to leases concluded or renewed from the promulgation of the law, that is 26 May 2026. The rules on transfer, arising from the third paragraph of the same 4°, apply to transfers occurring on expiry of a period of three months after promulgation. The return within a maximum of three months, arising from the last paragraph, applies to leases in progress on the date of promulgation where the handover of the keys occurs on expiry of a period of three months after that date. The article applies in the Wallis and Futuna Islands.

Immediate operational consequence: for exits occurring in autumn 2026, the three-month period applies including to older leases. Internal property management procedures must be aligned with this timetable.

Set-off: certain, liquidated and due claims

Deducting the cost of reinstatement from the security deposit is a set-off. Article 1347-1 of the Civil Code recalls that it takes place only between two fungible obligations that are certain, liquidated and due. A claim for works whose amount is still undetermined is not liquidated. Hence the method: have the items costed by contractors, notify a reasoned statement of account, and retain only what is justified. The same reasoning applies to the interplay between occupation indemnity and security deposit where the tenant has remained in the premises: as long as the occupation indemnity has not been fixed, the corresponding deduction does not have the required liquidated character, which argues for a contractually framed provision rather than a global retention. The rules for fixing it, the precariousness discount and the recovery arrangements are dealt with separately in our article on occupation indemnity in commercial leases.

The text does not provide an express sanction for exceeding the three-month period. That must not lead to treating it as a recommendation: an unjustified retention exposes the landlord to a claim for return and to a debate on the loss caused to the tenant.

Recovering the cost of reinstatement beyond the security deposit

Formal notice, then performance at the tenant's expense

The security deposit rarely covers heavy reinstatement. The landlord then has Article 1222 of the Civil Code: after formal notice, the creditor may also, within a reasonable time and at a reasonable cost, have the obligation performed itself and claim from the debtor reimbursement of the sums spent for that purpose. It may also apply to the court for an order that the debtor advance the sums needed for that performance. Formal notice is a prerequisite, not an optional precaution: Article 1344 specifies that the debtor is put on notice either by a summons or an act containing sufficient demand, or, if the contract so provides, by the mere fact that the obligation has fallen due. The landlord cannot commission the works at the tenant's expense without this prerequisite.

Two safeguards appear in the text itself: the time and the cost must be reasonable. A works contract awarded without competition, including items that enhance the value of the asset, weakens the claim for reimbursement.

The range of remedies and damages

Article 1217 allows, in particular, enforcement in kind of the obligation to be pursued and reparation of the consequences of non-performance to be claimed, compatible remedies being capable of cumulation, damages may always be added. Article 1231-1 founds the debtor's liability to pay damages either by reason of non-performance of the obligation, or by reason of delay in performance, save force majeure. It is on this ground that the loss from the premises being tied up during the reinstatement works is argued, an item that institutional landlords frequently claim. No specific text of the statute governs it: the basis is the general law and its assessment is a matter for the courts. It must therefore be documented as a real loss (technical duration of the works, marketing mandate, lost offers) and not presented as an automatic multiple of the rent.

Likewise, the costing method adopted by the judges, cost on the basis of a quote or an invoice, discount for wear and tear, whether or not actual completion of the works is required, is fixed by no text. The most solid defensive position remains that of the landlord who has actually commissioned the works and produces the invoices.

Limitation: a characterisation not to be overlooked

Article L. 145-60 of the French Commercial Code provides that all actions brought under this chapter are time-barred after two years. Article 2224 of the Civil Code sets the limitation period for personal actions at five years, from the day on which the holder of a right knew or ought to have known the facts enabling it to exercise it. The characterisation of the landlord's action for compensation for reinstatement works, based on the statute or on the general law of contract, is debated and is not settled by the texts. Management consequence: reason on the shortest hypothesis and act within two years of the return, rather than exposing the claim to a plea of inadmissibility.

The usability of the asset, the real stake of the exit

Reinstatement is not only a claim to be recovered, it is a precondition for re-letting. The institutional landlord chooses between three scenarios. Demanding complete reinstatement, which maximises the claim but ties up the premises for the duration of the works and may destroy marketable fit-out. Keeping all or part of the fittings and negotiating a settlement indemnity, which shortens the vacancy period. Or making release of the security deposit conditional on the tenant itself carrying out the works before the handover of the keys, a contractual option to be provided for from the drafting of the lease.

This choice must be made before the exit inventory, because it determines the content of the record. An inventory drawn up without a re-letting strategy describes defects; an inventory drawn up with that strategy identifies what will be removed, what will be kept and what will be charged. The difference in value is measured in months of vacancy, not in items of painting.

Conclusion

The law of 26 May 2026 has shifted the centre of gravity of exit disputes. The landlord is no longer judged only on the merits of its claims, but on its ability to document them within three months from the handover of the keys. The exit inventory ceases to be a management act and becomes the centrepiece of the recovery file: it conditions the benefit of the comparison under Article 1730, the liquidated character of the claim within the meaning of Article 1347-1, and the justification of deductions required by Article L. 145-40.

The recommendation is simple and operational. Establish a standardised exit protocol for the whole portfolio: written summons of the tenant at least one month before expiry, exhaustive record by trade with dated photographs, consultation of at least two contractors within three weeks of the handover of the keys, notification of a reasoned statement of account with supporting documents before expiry of the three-month period, and formal notice under Article 1344 before any works are commissioned at the tenant's expense. And before signing the next lease, have your return and accrual clauses reviewed in light of the new Article L. 145-40: the quarterly cap on security for the premises referred to in Article L. 145-32-1 applies to leases concluded or renewed since 26 May 2026.

Frequently asked questions

Is an exit inventory mandatory in a commercial lease? Article L. 145-40-1 of the French Commercial Code provides that an inventory is drawn up on taking possession of the premises and on their return, jointly and amicably by the landlord and the tenant or by a third party appointed by them. Failing that, it is drawn up by a bailiff (huissier de justice), on the initiative of the more diligent party, with costs shared equally. A landlord who has not taken all steps to have it drawn up may not invoke the presumption of Article 1731 of the Civil Code. The obligation also applies to the derogatory lease of Article L. 145-5.

What is the period for returning the security deposit in a commercial lease since 2026? Since Law No. 2026-403 of 26 May 2026, Article L. 145-40 requires the return of sums paid by way of security within a reasonable period not exceeding three months from the handover of the keys, by hand or by registered letter with acknowledgement of receipt, to the landlord or its agent. Deductions are allowed only for sums remaining due and those for which the landlord may be liable in place of the tenant, provided that they are duly justified. That period applies to leases in progress on the date of promulgation where the handover of the keys occurs on expiry of a period of three months after that date.

Can the landlord retain the security deposit to fund reinstatement? Yes, but the deduction presupposes a claim that meets the conditions for set-off: fungible obligations that are certain, liquidated and due within the meaning of Article 1347-1 of the Civil Code. To this is added the requirement of justification laid down by Article L. 145-40. In concrete terms, the deduction must be backed by an exit inventory compared with the entry inventory and by quotes or invoices, notified to the tenant within the three-month period.

What can be charged to the tenant for reinstatement of commercial premises? The scope results from the entry/exit comparison provided for in Article 1730 of the Civil Code, the tenant having to return the property as received except for what has perished or been damaged through wear and tear or force majeure. Article 1755 excludes repairs caused only by wear and tear or force majeure. Article R. 145-35 of the French Commercial Code also prohibits charging to the tenant the major repairs of Article 606 of the Civil Code and works remedying wear and tear or ensuring compliance where they fall within those major repairs.

Can the landlord have the works carried out and claim reimbursement? Article 1222 of the Civil Code allows it, but only after formal notice, and within a reasonable time and at a reasonable cost. The landlord may then claim from the debtor reimbursement of the sums spent, or apply to the court for an order that the debtor advance the sums needed. Formal notice is governed by Article 1344: a summons, an act containing sufficient demand, or the mere fact that the obligation has fallen due if the contract so provides.

What limitation period applies to the action for reinstatement? Article L. 145-60 of the French Commercial Code subjects to a two-year limitation period all actions brought under the commercial lease statute, whereas Article 2224 of the Civil Code sets five years for personal actions from the day on which the holder knew or ought to have known the facts. The characterisation of the landlord's action for compensation for reinstatement works is debated. As a precaution, it is recommended to act within two years of the return of the premises.

Before which court should an application be made for a pre-trial expert appraisal of the condition of the premises? Article 145 of the French Code of Civil Procedure allows a measure of inquiry to be obtained before any trial where there is a legitimate ground. Since Decree No. 2025-619 of 8 July 2025, applicable to proceedings commenced from 1 September 2025, where the measure of inquiry concerns a building, the court of the place where the building is situated has sole jurisdiction. The applicant no longer has, in that situation, the choice between the court hearing the merits and that of the place of execution.