Category: Firm’s news

The French Economic Simplification Act of May 26, 2026: Key Changes to Commercial Leases

After two years of parliamentary debates, the French Economic Simplification Act (the Act) entered into force on May 26, 2026. A number of key measures affect commercial leases, notably strengthening the rights of tenants.

Right to pay monthly
Rent is generally paid quarterly in advance. To ease the burden on cash flow, eligible tenants may now request to make payments on a monthly basis. To be eligible, the tenant must occupy premises used for retail or commercial activity (tenants of offices and warehouses are not therefore eligible) and must not be in arrears.

Rent indexation mechanisms: validity of “tunnel” clauses
Rent indexation clauses may now include a cap on the variation of rent resulting from the commercial rent index applicable to commercial premises, provided the cap is symmetrical, limiting the variation to the same extent both upwards and downwards. This measure does not apply to indexation mechanisms linked to other indexes.

Cap on rental guarantees
The Act introduces a cap on rental guarantees that landlords may request from tenants. Cash security deposits, on the one hand, and other forms of security (such as suretyships and first demand guarantees), on the other hand, are each capped at 3 months’ rent. As the Act does not specify a cap on the combined total of guarantees, landlords can presumably request both a security deposit and a separate guarantee, each up to 3 months’ rent. This measure applies only to tenants of commercial premises eligible for monthly payments (see above).

Return of rental guarantees when the lease ends
Following the handover of keys at the end of the lease, landlords must now return rental guarantees within the following timeframes: (i) a reasonable period not exceeding three months for security deposits; and (ii) a maximum period of six months for other guarantees (suretyships, first-demand guarantees, etc.).

Since the service charges reconciliation at the end of the lease often occurs more than six months after the handover of keys and therefore after the return of all guarantees, landlords now find themselves with no guarantee for payment of any outstanding amounts resulting from such reconciliation

Treatment of rental guarantees in the event of a sale of the premises
When a property is sold, the obligation to return security deposits is now automatically transferred to the buyer (new landlord). Other guarantees (suretyships, first-demand guarantees, etc.) automatically lapse as a result of the sale, requiring sellers to return the relevant documents to tenants and to complete any releases within six months of the sale.

In practice, commercial leases will need to include an obligation on the tenant to provide the new owner with an equivalent guarantee no later than the date of sale, which means the seller must inform the tenant of the sale to allow the tenant to fulfil this obligation. Sale agreements will need to include a condition precedent requiring the provision of such a guarantee to the buyer.

Scope of tenant pre-emption right
Tenants of commercial property have a statutory pre-emption right in the event of the sale of their premises. The Act clarifies the scope of this pre-emption right, expressly limiting it to commercial premises and excluding offices and warehouses.

This measure puts an end to a series of lawsuits filed by tenants seeking to invalidate the sale of office space on the grounds that the pre-emption right should have been exercised.

Passing on property tax to tenants
One of the flagship measures originally proposed in the bill has – at least temporarily – been abandoned by lawmakers. The legislature refrained from prohibiting landlords from passing on property taxes to tenants, a standard provision in commercial lease agreements.

However, this prohibition could still be adopted in the future, in a new form, as a separate bill dated January 13, 2026, proposes a 50% cap on the amount of property tax that may be passed on to tenants. It remains to be seen whether such a measure will ultimately be enacted.

Muriel Guillin-Modaine, Partner

Sarah Copeland, Senior Associate

New mandatory formalities for transfers of shares in real estate-predominant companies

France has introduced new mandatory formalities for transfers of shares or interests in real estate-predominant companies, effective June 27, 2026. The reform strengthens France’s anti-money laundering framework and has immediate practical implications for domestic and cross-border transactions.

Prior to the reform, shares or interests in real estate-predominant companies could be transferred by a simple private agreement (acte sous seing privé), without the involvement of a regulated professional. New Article 1865-1 of the French Civil Code (introduced by Law No. 2026-534 of June 25, 2026) now requires, under penalty of nullity, that transfers occurring in France be recorded in a notarial deed, a deed countersigned by a lawyer or, in certain circumstances, a deed drawn up by a chartered accountant.

The chartered accountant route is narrow in practice, as it is only available where drafting the deed is directly ancillary to an existing accounting or tax-filing engagement for the company concerned. All three professionals are subject to anti-money laundering obligations.

The reform applies to any transfer of shares or interests in a personne morale à prépondérance immobilière (“PMPI”), a category broader than the familiar société civile immobilière (SCI). It covers unlisted civil entities, regardless of nationality, whose assets consist mainly of French real estate or real property rights, or interests in other PMPIs. Its extension to unlisted commercial companies is widely considered likely, although the point remains debated. Certain collective investment vehicles, including SCPIs and OPCIs, are excluded, though their real estate subsidiaries may still qualify as PMPIs. Importantly, real estate predominance is assessed by taking into account operating real estate used in a business, not only investment property.

The reform may therefore apply well beyond traditional asset-holding structures. A significant body of legal commentary considers that “transfer” should be interpreted broadly, covering not only sales but also gifts, contributions (apports), exchanges, buy-back-and-cancellation transactions and transfers of bare ownership (nue-propriété). The position on transfers of usufruct alone remains debated, although the prevailing view favours a broad interpretation. Mergers and other universal transfers of assets are excluded.

Cross-border transactions require particular attention. The new requirement may apply where the target company is foreign but meets the French tax-law definition of a PMPI, notably where the transfer deed is executed in France or must be registered in France. Separately,

French tax law (Articles 635 and 726 of the French General Tax Code) already requires certain transfers of interests in PMPIs carried out abroad to be recorded in an authentic deed received by a French-practising notary before registration in France. These overlapping requirements call for careful coordination, while some cross-border scenarios remain to be clarified.

Non-compliance renders the transfer void. The prevailing view is that this constitutes an absolute nullity (nullité absolue), given the anti-money laundering purpose of the reform. If confirmed, this would mean that the defect cannot be waived or cured after the fact, although this characterisation has not yet been tested in the courts.

An action to void a non-compliant transfer remains subject to the ordinary five-year limitation period. In a related measure, new Article 635-0 A of the French General Tax Code empowers the French tax authorities to refuse to register the transfer unless a qualifying deed is provided.

In practice, the reform affects transaction planning in three ways: (i) higher execution costs, as a regulated professional is now mandatory; (ii) longer timelines for onboarding and anti-money laundering checks; and (iii) greater legal certainty, through authenticated transaction dates, confirmed availability of funds at signing, certified capital gains calculations, and reduced fraud and dispute risk.

Clients holding French real estate through holding companies, joint ventures or multi-tiered group structures should therefore assess at an early stage whether any contemplated transfer may fall within the new regime, particularly in cross-border transactions. Clients who have already signed a transfer of PMPI shares or interests since June 27, 2026 without following the new formalities should promptly assess the implications.

Maëliss Bourbon, Counsel

Monitoring Working Time in France: A Challenge for Foreign Employers

Risks and Practical Solutions
Many foreign companies employing staff in France are not fully aware of the legal risks associated with inadequate monitoring of employees’ working time.
Under Article L.3245-1 of the French Labour Code, employees may bring claims for unpaid overtime covering a period up to three years backwards. In practice, French labour courts are very employee friendly in overtime disputes. Employees are only required to provide evidence regarding the hours allegedly worked, which may include timesheets prepared retrospectively, some emails or messages sent outside normal working hours, and witness statements from current or former colleagues.
Employers, for their part, must be able to produce objective and reliable records capable of demonstrating the actual working time performed by the employee.
Failure to do so can expose employers to significant overtime claims, together with potential damages and related liabilities. To mitigate such risks, many employers consider implementing the French forfait annuel en jours (annual working days package).
The forfait jours is a working time arrangement under which working time is measured in days worked per year, rather than in hours. The arrangement is capped at 218 working days per year and may only be implemented for employees who enjoy genuine autonomy in organizing their work schedule, subject to the conditions set out in Articles L.3121-58 et seq. of the French Labour Code.

The implementation of a forfait jours is subject to two cumulative requirements:

• the existence of an applicable collective agreement authorizing the use of the scheme; and
• the execution of an individual forfait jours agreement with the employee.

Employees subject to valid forfait jours are not governed by the statutory 35-hour week, daily maximum working time limits, weekly maximum working time limits, or the rules applicable to overtime compensation. They nevertheless remain entitled to the mandatory daily and weekly rest periods, public holidays observed within the company and paid annual leave.
According to data published by DARES, approximately 2.5 million employees were covered by a forfait jours in 2025, representing approximately 16% of full-time employees in the private sector and nearly 60% of full-time managerial employees.
While this system may appear particularly attractive from an employer’s perspective, many foreign employers overlook the strict obligations that accompany its implementation.
Indeed, French law requires employers to ensure on an ongoing basis that the employee’s workload remains reasonable.
In practice, a simple annual review meeting, a self-reporting tool, or general reminders concerning statutory rest periods may prove insufficient where they do not enable the employer to effectively identify and address situations involving excessive workloads.

Employers should therefore implement a robust monitoring framework, including in particular:

• maintaining a record of the employees’ working days and half-days, as well as non-working days, identifying the nature of each rest day. Such records may be completed by the employee but should be reviewed monthly by a manager;
• periodically verifying, and documenting, that the employee’s workload remains compatible with compliance with mandatory daily and weekly rest periods;
• put in place a Charta on disconnection;
• regularly reminding employees of the requirement to maintain reasonable working hours and an appropriate work-life balance;
• conducting at least one formal annual meeting to discuss workload, work organization, work-life balance and remuneration with written minutes signed by both parties (a mere statement made during a performance interview indicating that the employee has no concerns is insufficient to satisfy the employer’s obligations).

Failure to comply with these requirements, the forfait jours may result in the arrangement being declared unenforceable.
Thus, the employee may be reinstated into the ordinary working time regime based on the statutory 35-hour week, with hours worked beyond qualifying as overtime.
The financial consequences can be significant. In addition to overtime claims, employers may be exposed to damages and other sanctions for non-compliance with French working time regulations.
Therefore, the forfait jours system can serve as an effective risk-management tool, if it is implemented and monitored with the degree of rigor required by French law.

Nicola Kömpf, Partner

Félicia Couratte-Arnaude, Legal Counsel

Pay Transparency: Key Challenges for Multinational Groups with French and EU-Based Employees.

A/ Overview

The Directive (EU) 2023/970 issued by the European Parliament, which entered into force on May 10, 2023, is commonly referred to as the “Pay Transparency Directive”. It is undoubtedly one of the European texts currently generating the most debate across the EU as it aims to put an end to direct and indirect pay discrimination between women and men by harmonizing practices at both national and European level.

The Pay Transparency Directive sets a shared objective of reducing unjustified pay gaps and thus establishes minimum requirements on pay transparency to comply with the principle of equal pay. Yet it does not provide a uniform, standardized rulebook. Instead, implementation will vary across EU Member States, requiring compliance to be assessed on a country-by-country basis.

To date, based on publicly available information, only 6 of the 27 EU Member States have met the deadline set by the European Union for transposing the Pay Transparency Directive, namely Estonia, Greece, Italy, Lithuania, Malta and Slovakia. France, like several other Member States, is experiencing a significant delay in the transposition process.

More than three years after the adoption of the Pay Transparency Directive, the second draft law is due to be presented to the French Council of Ministers on September 10, 2026.

Its entry into force is targeted for January 1, 2028, an objective repeatedly announced by the Minister of Labor, although this date is not yet legally fixed and remains subject to the parliamentary process and implementing decrees.

As it stands, the draft law comprises twenty-two articles and applies to employers in both the private and public sectors. It is structured around three main pillars: (i) transparency on remuneration granted to employees, both at the recruitment stage and through an annual right to information; (ii) transparency on pay gap indicators to promote greater equality between women and men; and (iii) reversal of the burden of proof and sanctions applicable in case of non-compliance.

What Will Change in Practice: Core Obligations

• No more questions about previous salary. Employers will no longer be allowed to ask candidates about their previous remuneration.
• A salary range from the job offer stage. Employers will have to communicate a salary range and the applicable collective bargaining provisions in the job vacancy notice or, failing that, prior to the job interview.
• An annual right to information. Employees will be able to request their own level of remuneration and that of colleagues holding comparable positions, unless this would allow an individual employee to be identified.
• Pay gaps under scrutiny. Any unjustified pay gap between women and men, not based on objective criteria, will trigger an obligation to implement corrective measures such as negotiations on professional equality, action plans, etc.
• Reversal of the burden of proof. In the event of a dispute, it will no longer be up to the employee to prove discrimination; instead, the employer will have to demonstrate that its decision was based on objective criteria unrelated to any discriminatory ground.
• Sanctions. In case of non-compliance, criminal sanctions may apply, such as up to two years’ imprisonment and a €7,500 fine, where an offence is committed by the same employer against several individuals.

B/ Impact of the Directive on Multinational Organizations with French and EU-Based Employees

For foreign groups already established in France, or considering doing so, this issue deserves particular attention.

The implementation of pay transparency and its transposition into French law introduce new HR compliance obligations, which will replace the current professional equality index (index de l’égalité professionnelle).

These companies are already subject to a substantial number of other non-financial reporting requirements, including the Corporate Sustainability Reporting Directive (CSRD) and the duty of vigilance.

The cumulative effect of these obligations contributes to a perception of regulatory complexity, which may be a concern for foreign investors.

Two points deserve particular attention from international groups establishing operations in France:

• Compliance with the new requirements laid down by the EU Directive may entail significant costs, as multinational companies will be required to redesign their pay structures, conduct pay-gap audits, adapt their HR information systems and monitoring processes, and train recruitment teams on the new rules governing salary transparency.
• The tension between global remuneration policies and local requirements. Many international groups apply remuneration policies and classification grids defined at global or regional level. The need to objectively justify pay gaps by category of work of equal value, using criteria compliant with French law, will require a local adaptation of these policies that some HR departments have not yet anticipated.

For multinational employers, the Pay Transparency Directive is a challenge, as they will have to navigate a regulatory patchwork should they operate in multiple EU markets.

They cannot simply wait for local implementation, bearing in mind that, at least in France, the timetable is uncertain.

Building a coordinated, group-wide compliance framework now will ensure these organizations are fully prepared when each national transposition takes effect.

Florence Coussau, Partner

Diane-Valérie Bilala, Associate

We are pleased to have advised Safran Corporate Ventures, the corporate venture capital arm of the Safran Group, on the creation of Rebound, a joint venture bringing together Safran, Airbus, Technip Energies and Tereos to develop a large-scale sustainable aviation fuel (SAF) production project.

Located at the Port of Dunkirk, the project aims to develop a production capacity of approximately 160,000 tonnes of SAF per year, using Alcohol-to-Jet technology. By bringing together the complementary expertise of the four partners across the entire value chain, Rebound aims to contribute to the decarbonisation of the aviation sector and to strengthening European energy sovereignty.

Alerion Avocats team:

• Pierre-Olivier Brouard, Partner, M&A, Corporate, Private Equity
• Catherine Robin, Partner, Competition & Commercial
• Benoît Deramoudt, Counsel, M&A, Corporate, Private Equity

Congratulations to all the parties involved in this strategic transaction supporting the aviation sector’s energy transition.

To learn more: Skadden conseille Technip Energies dans le cadre d’une joint-venture avec Airbus, Safran et Tereos – LE MONDE DU DROIT – Le magazine des professionnels du droit

We are pleased to announce the appointment of our partner Schéhérazade Abboub, a specialist in data, public procurement, and digital technology, as vice president of Droit.org – the French Institute for Legal Information.

Schéhérazade Abboub is also one of our representatives on our “AI Committee” and a co-founder of the Observatoire Data Publica, which contributes to public discourse and debate on the use of data and AI in the public interest.

This appointment, made during Droit.org’s General Assembly on September 21, 2026, marks a new phase in the association’s development. For over fifteen years, the association has been committed to making the law accessible and is now particularly focused on issues related to data, artificial intelligence, and digital sovereignty.

Droit.org is notably involved in the Legal Data Space, an initiative aimed at building a shared infrastructure for the exchange and utilization of legal data and at fostering the emergence of sovereign legal artificial intelligence.

Congratulations to Schéhérazade on this appointment, which further strengthens our commitment to the responsible and controlled use of data and artificial intelligence.

To learn more: https://lnkd.in/p/eQvKYyG9

On September 22, Corinne Thiérache, our partner specializing in IP/IT and Privacy, spoke at the GESTE working group on the topic: “Understanding the New RIA Obligations and Applying Them to Media Practices”

This presentation provided an opportunity to analyze the transparency obligations applicable to media entities as providers or deployers of artificial intelligence tools, as well as to identify the various types of AI usage within the sector.

It also provided an opportunity to address a key issue: preserving and ensuring human oversight in the use of these tools, particularly with regard to the media’s editorial responsibility.

It was a fruitful discussion on the new requirements of the European Artificial Intelligence Regulation (AIR) and their practical application to the practices and operations of the media sector.

Thank you to GESTE, Carole Boyer, Laure de Lataillade, and all the participants for their involvement.