Droit au bail risks and costs?
I’m in the process of signing a contract to rent a shop in Annecy for my frozen yogurt business in France. I am shocked by the high cost of the droit au bail (160,000 euros) and the associated administration fees (12,000 euros for the notaire and 10,000 euros for the agency).
Before signing this contract I want to fully understand the risks involved. Under what circumstances could I possibly lose the 160,000 euros? Are there any safeguards or guarantees by the state? My basic understanding is that by paying this 160,000 euros I become the leaseholder of the shop. This in turn gives me the right to demand 160,000 euros from the next person wanting to rent the shop after me. What happens if nobody is willing to pay 160,000 euros for the droit au bail after me?
In Greece for example, a similar concept existed before the crisis. Now nobody dares to ask for additional money other than the rent. My concern here is that France might get stuck in a prolonged recession which would have a downward pressure on the value of the droit au bail.