The purpose of this quarterly publication is, for the real estate team of SQUADRA AVOCATS, to provide the players of the real estate world with an overview of recent legislative or case-law developments.
Legislative developments
The experiment of the Economic Activity Courts
As part of the experiment under the orientation and programming law of 20 November 2023, twelve commercial courts have been renamed "Economic Activity Courts"* since 1 January 2025.
Until 31 December 2028, these courts will absorb certain jurisdictions of the judicial courts so as to concentrate claims relating to amicable and collective proceedings before this single court.
These Economic Activity Courts now have jurisdiction to deal with:
- safeguard, reorganisation or judicial liquidation proceedings and amicable proceedings of all professionals, whatever their status and activity, with the exception of regulated legal professions.
- All actions and disputes relating to commercial leases, arising from the collective proceedings and which present sufficient connecting links with the latter.
*List of the Economic Activity Courts (TAE): Avignon, Auxerre, Le Havre, Le Mans, Limoges, Lyon, Marseille, Nancy, Nanterre, Paris, Saint-Brieuc and Versailles.
Use of premises: Opinion of the Court of Cassation of 10 April 2025 on the application of the Le Meur law over time
In its opinion n°25-70.002 of 10 April 2025, the Court of Cassation specifies that where a civil fine is sought on the basis of an unlawful change of use occurring before the entry into force of the law of 19 November 2024, the determination of the residential use of the premises provided for by article L.631-7 of the CCH must be carried out in light of the criteria of the former law.
Reminder: law n° 2024-1039 of 19 November 2024 aimed at strengthening the tools for regulating furnished tourist accommodation at the local level, known as the Le Meur law, amended article L.631-7 of the CCH regarding the reference period used to determine the use of premises.
Since the Le Meur law, premises allocated to residential use are deemed to be for residential use:
- either on a date between 1 January 1970 and 31 December 1976 inclusive;
- or at any time during the thirty years preceding the application for prior authorisation for the change of use or the challenge to the use.
Furthermore, the civil fine for unlawful change of use is now sanctioned by a civil fine which may not exceed 100,000 euros per premises unlawfully transformed, compared with 50,000 euros previously.
The former wording of article L. 631‑7 of the CCH provided that premises were deemed to be for residential use if they were so on 1 January 1970.
Cass., 10 April 2025, n°25-10.002
The return of the bill to simplify economic life and commercial leases
The examination of the bill to simplify economic life and commercial leases had been suspended following the dissolution of the National Assembly.
Since then, this text has been examined by a special committee of the National Assembly, which adopted a series of amendments concerning in particular:
- The capping of guarantees, whatever their form, at three months’ rent. This cap would apply to current leases and lessors would have a period of six months to repay the excess guarantees;
- Release and return of the premises by the liquidator within two months following the pronouncement of the judgment opening the judicial liquidation of the tenant;
- The option to pay commercial rents on a monthly basis, including for operators of single-use premises;
This bill is to be put to a vote on 6 May.
Case-law developments
Destruction of the premises and termination of the lease
Article 1722 of the Civil Code allows, depending on the circumstances, the termination of a lease in the event of destruction of the leased property by a fortuitous event.
When the destruction is partly attributable to a failure to maintain the leased property by the lessor, the condition of a fortuitous event is not met and termination cannot be pronounced.
Cass. 9 January 2025, 23-16.698
Indexation clause deemed unwritten
The action seeking to have a clause of the commercial lease deemed unwritten is not subject to limitation.
The repayment of sums unduly paid by the tenant may be requested within the limit of the five years preceding the legal action.
The claim for restitution of the undue amount must be calculated on the basis of the amount of rent that would have been due in the absence of application of such a stipulation.
Cass. 23 January 2025, 23-18.643
Amicable expertise and probative force
Judges may, without violating the adversarial principle, base their decision exclusively on a non-judicial expertise carried out at the request of one of the parties.
Cass. 16 January 2025, 23-15.877
Commercial lease and renewed rent
The creation, during the expired lease, of a new legal obligation must be taken into consideration for setting the renewal rent.
This is notably the case of the obligation since 2014 for the lessor to take out civil liability insurance in its capacity as non-occupying co-owner.
In this case the judges considered that this new obligation could be held as grounds for uncapping the renewal rent.
Cass. 23 January 2025, 23-14.887
Termination clause and request for grace period
It follows from article L. 145-1 paragraph 2 of the Commercial Code that the suspension of the effects of a termination clause may be decided by the judge, whatever the tenant’s breach of its obligations.
Beyond the classic breach of the tenant of its obligation to pay the rent, article L. 145-1 paragraph 2 of the Commercial Code may therefore be invoked by the tenant in the event of a breach of its obligation to carry on its activity in order to avoid termination of the lease.
Cass. 6 February 2025, 23-18.360
Allocation of charges between the lessor and the lessee
Before the Pinel law, the parties were free to agree in a lease on the allocation between them of charges, taxes, duties and fees.
Since then, the lease must compulsorily include an inventory of the charges and taxes, some of which cannot be re-invoiced to the tenant.
Any ambiguity in this matter is interpreted in favour of the tenant and the fact that the latter paid certain charges for nine years does not deprive it of the right to request their reimbursement within the limit of the applicable limitation period.
Cass. 13 February 2025, 23-17.978
Option right: form and validity
Unlike a notice to quit or a request for renewal, the exercise of the lessor’s option right in order ultimately not to renew a commercial lease imposes no condition of form and no mandatory mention, in particular as regards the two-year limitation period.
It nonetheless remains that it must be possible to prove the date of exercise of the option right, which argues for notification by a judicial commissioner.
Cass. 27 March 2025, 23-20.030
Option right and occupation indemnity
As long as the rent of a lease renewal has not been definitively set amicably or judicially, the lessor may, under article L. 145-57 of the Commercial Code, exercise its option right and ultimately refuse the renewal.
In such a case the tenant owes an occupation indemnity equal to the rental value (which may be higher than the capped rent) and this, from the date of expiry of the lease.
Cass. 27 February 2025, 23-18.219
Expertise interim proceedings and limitation period
Pursuant to article 2239 of the Civil Code, the appointment by the interim relief judge of a judicial expert interrupts the limitation period for the duration of the expertise.
However, this interruption benefits only the party that requested the expertise. It is therefore essential for the defendant, if it does not intend to oppose the expertise, that it file submissions to avoid any limitation.
Cass. 6 March 2025, 23-16.269
Enforceability of an assignment of leasehold rights
Any assignment of leasehold rights or of a business made in violation of the lease stipulations which required the signing of an authentic instrument and the presence of the lessor, is unenforceable against the latter.
It is therefore essential to refer to the clauses of the lease before any assignment.
Cass. 13 March 2025, 23-23.372
Incompatibility "Assignment and sub-letting"
The judges recall the obvious: in the context of collective proceedings, a tenant cannot, on the same premises, conclude a contract for the assignment of its leasehold rights and a sub-letting contract. One of the two contracts is necessarily without cause.
Cass. 27 March 2025, 23-17.963