Analysis of the judgment of the Nanterre Judicial Court of 21 April 2026
On 21 April 2026, the Nanterre Judicial Court handed down an important decision concerning commercial leases for student accommodation operated under an integrated model.
The dispute was between the company operating a student residence, acting on behalf of ICADE EUROSTUDIOS, and the owners of a studio who had given notice of termination, refusing to renew the lease and offering eviction compensation.
The court was primarily required to rule on two key issues:
- how to assess the eviction compensation owed to the operator of a student residence;
- which method to apply to determine the compensation for continued occupation after the lease expires.
Recognition of the partial loss of business goodwill
The commercial lease concerned a unit located in a centrally managed student residence.
The landlord argued that there was no operational unity between the various units in the residence and that the eviction from a single studio caused only limited damage. The owners cited, in particular:
- the absence of an indivisibility clause;
- the legal autonomy of the co-owners;
- the absence of economic interdependence between the units.
The operating company, on the other hand, argued that the loss of a studio unit resulted in a partial loss of the business operated within the residence. It based its argument on the case law of the Court of Cassation relating to managed residences.
The court adopted a nuanced position.
It refused to recognise the total indivisibility of the residence’s business assets, but clearly acknowledged the existence of a partial loss of the business corresponding to the evicted unit.
This reasoning is significant: the eviction of a single unit does not cause the entire business of the residence to disappear, but it nevertheless causes real commercial damage to the operator.
A valuation method inspired by managed residences
The court-appointed expert had identified two possible methods:
- a method based on the partial loss of the business assets;
- a flat-rate method corresponding to six months’ rent.
The court opted for the first approach.
The expert had assessed the loss by calculating the residence’s total turnover and then allocating it per unit to measure the economic loss associated with the evicted studio. This method resulted in a principal compensation payment of €16,166.
The court upheld this reasoning.
The judgment contains a particularly interesting analysis of the student residence management business. The court considers that this activity lies ‘between’ that of a property manager and that of a hotel operator.
The court notes in particular:
- a furnished rental business with services;
- a higher turnover of occupants than in conventional housing;
- limited hotel-style services;
- a leaner staffing structure than a traditional hotel.
This intermediate classification justifies the application of a specific valuation coefficient to the residence’s turnover. The court thus upheld the coefficient of 1.85 adopted by the expert.
Ancillary compensation awarded to the operator
In addition to the main compensation, the court awarded several ancillary payments:
- reinvestment allowance: €1,620;
- business disruption: €446;
- fixed costs: €320;
- removal costs: €150;
- administrative costs: €50.
The court noted that, in cases of eviction, the compensation must cover all the economic consequences of the non-renewal of the lease.
Notably, the court allowed compensation for re-establishment even in the presence of a non-transferable business, unless there was evidence to the contrary demonstrating that the tenant would not re-establish the business in the future.
The total amount of the eviction compensation was finally set at €18,752.
Rejection of indexation of the occupation compensation to the ILC
The landlords also requested that the occupation compensation be indexed in line with the ILC from the date of notice.
The court rejected this request.
(0.00 out of 5)