“Leases Under Louisiana Law” - Article by Jess Frey

February 20, 2020

By Jess Frey
Taylor Porter Special Counsel

Whether you are driving by the shopping centers on Jefferson Highway or the sugar cane fields on LA 1, there is one thing the businesses in these areas have in common: they are governed by Louisiana’s laws on leases. However, the parties to a lease may agree to change these provisions as they relate to the lease in question, subject to some exceptions. This article will discuss Louisiana’s laws on leases and the contractual provisions related thereto.  

A Lease is defined as a contract where the one party gives the use and enjoyment of a thing for a term in exchange for rent that the lessee binds himself to pay.[1] Louisiana Civil Code Article 2676 states that the rent shall be fixed by the parties in a sum certain or determinable through a method agreed by them or fixed by a designated third party.  The lease is unenforceable if, in the original lease term, the method is unworkable or the designated third party is unwilling or unable to fix the rent.  However, the court may fix the rent and the lease would remain in effect if that method relates to a later re-determination of rent (such as an option to extend).  Additionally, Article 2703 contains a suppletive rule that if rent is payable in intervals shorter than the term, rent is due at the beginning of each interval, and in the absence of a contrary agreement, payable at the address of the lessee.

Article 2679 limits the duration of a lease term to 99 years. If the term of a lease exceeds 99 years, including all options to extend that lease, then the term is reduced to 99 years.[2]  If the parties have not agreed on a term,[3] or if the term's duration depends solely on the will of one of the parties and the parties have not agreed to a maximum duration,[4] the Code supplies a term for the lease, which varies depending on its type.[5]  The legal term for an agricultural lease is year to year.[6]  The lease of any other immovable (and any movable used as a residence) is month to month.[7]  All other leases are day to day, unless the rent was fixed by longer or shorter periods.[8]

A lease with a fixed term[9] terminates upon expiration of that term, unless reconducted or extended.[10]  Reconduction occurs when a tenant remains in possession of the leased premises beyond the expiration of the lease term for a specified period without opposition from the lessor.[11]  For example, in the case of a non-agricultural lease with a ten year term (or any lease with a term longer than one week), the lease is reconducted by the lessee's maintenance of unopposed possession for more than one week.[12]  Upon reconduction, the term is changed to, and will continue on a basis of, month to month for any lease whose term was a month or longer.[13]  All leases, whether movable or immovable, are susceptible to reconduction.[14]

Jess Frey practices in the areas of contracts, corporate transactions, business, real estate and finance, focusing on business and finance transactions ranging from acquisitions, divestitures and mergers to general contract matters, formation for large and small companies and governance. He represents individuals, start-ups, small businesses and public companies (including master limited partnerships) in various industries, including chemical plants, construction companies, real estate investors and developers, management companies, oil and gas companies, waste management companies, doctors and insurance companies, assisting with their growth, planning and day-to-day operations. Jess’ practice includes representing both banking or lending institutions and borrowers in financing transactions; private placements of equity and debt; drafting and negotiating contracts, such as service agreements, supply agreements, Purchase Order terms and conditions, construction contracts, purchase agreements, acts of sale, leases, servitude agreements, loan documents, mortgages, employment agreements, operating agreements, joint venture agreements, management agreements and pipeline contracts.

[1] La. Civ. Code art. 2668.
[2] La. Civ. Code art. 2679.
[3] See La. Civ. Code art. 2678.
[4] La. Civ. Code art. 2679.
[5] See La. Civ. Code art. 2680.
[6] Id.
[7] Id.
[8] Id.
[9] See La. Civ. Code art. 2678.
[10] La. Civ. Code art. 2720.
[11] La. Civ. Code art. 2721.
[12] Id.
[13] See La. Civ. Code art. 2723.
[14] Id.

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