- 12
- Apr.
- 2024
What’s the Latest Update on Commercial Leases?
modified on 24 Apr. 2024 à 03:18 Read : 3 minute(s) A A A
The fate of parties engaged in old commercial leases remains uncertain, despite the State Council’s decision on April 5, 2023, to suspend Decree-Law No. 12835 concerning the government's referral of the commercial lease law to Parliament.
Until the Council of State adjudicates on the substance of Decree-Law No. 12835 concerning old commercial leases — either by nullifying it or rejecting the nullification request — the dispute between parties to such leases remains unresolved. As for the law, it is still seen as protective of the tenants' rights, putting forward their interests in the pursuit of “a certain social justice.”
However, the Assembly of Property Owners of Rented Real Estate in Lebanon considered the Council of State's preliminary decision, suspending the enforcement of Decree-Law No. 12835, as “a step towards the government's referral of the commercial lease law to Parliament, aimed at liberalizing these leases and preserving the rights of property owners.”
Admissible in Form
The Council of State deemed the petition from the Assembly of Property Owners of Rented Real Estate in Lebanon “admissible in form.” Simply put, the administrative jurisdiction considered that the petitioner had sufficient reason and interest to act. In that respect, it deviated somewhat from its typically restrictive jurisprudence regarding the appeal before the administrative tribunal.
Administrative Contestation
The Assembly of Property Owners of Rented Real Estate in Lebanon has accused the Executive of disregarding the Legislature, citing the Lebanese Constitution. The debate is primarily about fundamentals rather than two opposing individual viewpoints.
Res Judicata Authority
In reality, the litigation is ongoing, and it will take the Council of State several months to reach a resolution and issue a final judgment that will hold the res judicata authority.
Meanwhile, significant pressure mounts on Caretaker Prime Minister Najib Mikati to retrieve the decree-law and proceed with its publication for enforcement.
A restrictive interpretation of the Council of State's preliminary decision does not compel the Caretaker Prime Minister to do anything.
Government Act
In this specific case, the Council of State's preparatory decision has consecrated its competence to decide on the matter, ruling out the hypothesis that the Caretaker Prime Minister's referral of the decree-law to Parliament for a second reading qualifies as a government act. As a reminder, government acts refer to actions undertaken by the executive authority that cannot be subject to court review as they necessitate political expertise rather than legal expertise to be assessed.
Serial Violation
The Parliament voted, article by article, on the law dated December 15, 2023, regarding old commercial leases. However, in January 2024, Mikati unilaterally withdrew the decree-law on commercial leases from a list intended for publication in the Official Gazette, instead referring it back to the Chamber for review. He disregarded both the fact that this prerogative belongs solely to the President of the Republic and the consent of the government.
Decree-Law No. 12835 introduced a progressive, four-year phase-out of the freeze on old commercial rentals. It thereby followed the trajectory of the law for the gradual liberalization of residential leases, spanning nine years, voted in 2014 and slightly amended in 2017.
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