When it comes to choosing between a business lease and a contract for the provision of services, business owners need to understand the fundamental differences between these two types of agreement. Each of these contracts offers specific rights and obligations that can have a significant impact on the management and security of the business. This understanding is essential to avoid misunderstandings and potential disputes.

When business owners have to choose between a professional lease and a service contract, it’s crucial to understand the legal and practical differences between these two options. A professional lease offers specific legal protections, while a service contract allows for greater flexibility. This article explores the key distinctions, benefits and risks associated with each type of contract, to help businesses make the best choice for their needs.

Legal distinction between a professional lease and a service contract

A professional lease and a contract for the provision of services are two types of contract that are often confused, but they offer very distinct rights and obligations. A professional lease is subject to strict regulations that protect the tenant. For example, tenants benefit from legal protections that are not available under a service contract. On the other hand, a service contract is more flexible and less legally framed, which can be advantageous in certain situations.

Contractual flexibility

Service contracts offer great flexibility in terms of duration and conditions. Unlike professional leases, which are often rigid and regulated, these contracts enable companies to adapt quickly to their changing needs. For example, a company can lease office space under a service contract, including services such as maintenance and security, without being subject to the constraints of a commercial lease. This flexibility is particularly appreciated by start-ups and fast-growing companies, as described in this article on the benefits of coworking.

Risk of confusion and protection of the service provider

It is common for tenants to confuse these two types of contract, which can lead to misunderstandings and legal disputes. A company may think it has the same rights as a traditional tenant, when in fact it has signed a service contract. For example, a start-up may sign a service contract for a coworking space, thinking it has the same protections as a lessee under a traditional lease. To avoid such confusion, it’s important to understand the differences between these two types of contract, as explained in this guide to renting office space in Paris.

Classification as a sublease

Another important aspect to consider is the qualification of the sublease. According to the French Supreme Court (Cour de cassation), the provision of premises for a fixed overall price, which remunerates both the provision of the premises and specific services, does not constitute a sublease within the meaning of article L. 145-31 of the French Commercial Code. For more details on the essential rules governing office subleases, see this article.

Alternatives to the traditional rental lease

Companies often need flexible solutions to meet their ever-changing needs. Service contracts offer a number of interesting alternatives, such as coworking or short-term office rentals. These options enable companies to benefit from additional services without the constraints of a traditional 3, 6 or 9-year lease. To explore these alternatives, read this article.

Case in point: La Défense, the past or the future of the office?

A concrete example of the evolution of workspaces is the La Défense district in Paris. This dynamic business district exemplifies the new trends in office space and service contracts. To find out more about the future of office space in La Défense, read this article.

FAQ : Professional lease or service contract: what choice should I make?

What is the difference between a professional lease and a service contract?

A professional lease is a contract granting the right to occupy premises for professional use. It is generally subject to strict regulations that protect the tenant. A service contract, on the other hand, is more flexible and includes additional services such as maintenance or security. This type of contract is less legally regulated.

What are the advantages of a professional lease?

The advantages of a professional lease include better legal protection for tenants, more complex eviction procedures and a more stable contract duration. Tenants benefit from specific rights that enable them to secure their occupation of the premises.

What are the advantages of a service contract?

A service contract offers great flexibility in terms of duration and conditions. It enables companies to adapt quickly to their changing needs, and can include additional services without the constraints of a commercial lease. This flexibility is particularly appreciated by start-ups and fast-growing companies.

Is it possible to confuse a lease with a service contract?

Yes, it is common for tenants to confuse these two types of contract. For example, a company may sign a service contract for a coworking space, thinking it has the same rights as a tenant under a standard lease. This can lead to misunderstandings and legal disputes.

What are the risks of signing a service contract while thinking you’re signing a lease?

Signing a service contract under the impression that you’re signing a lease can lead to unpleasant surprises, such as very short notice periods or simpler eviction procedures in the event of non-payment. It’s important to understand the nature of the contract to avoid these risks.

How can you tell the difference between a lease contract and a contract for the provision of services?

The status of commercial leases presupposes a lease as defined in article 1709 of the French Civil Code. The Cour de cassation (French Supreme Court) points out that a lease contract must be distinguished from a contract for the provision of premises when the use of the premises is part of the provision of various services.

What is the definition of a sublease under a leasing contract?

Under article L. 145-31 of the French Commercial Code, subletting does not apply when the lessee makes the leased premises available to third parties in return for a fixed overall price, which covers both the provision of the premises and the specific services required by customers.

Why is it crucial to distinguish between a lease and a service contract?

To avoid misunderstandings and potential disputes, it’s crucial to distinguish between a lease and a contract for the provision of services. Rights and obligations differ considerably between these two types of contract, and a misunderstanding can lead to significant legal consequences.