The Caen Court of Appeal has confirmed the judicial termination of a Pierre & Vacances commercial lease despite the late settlement of outstanding rent.
A holiday residence facing unpaid rent resulting from the health crisis
In a judgment dated 15 May 2026, the Caen Court of Appeal upheld the judicial termination of a commercial lease entered into between a private investor and the company PV Exploitation France for the operation of a Pierre & Vacances holiday residence.
The case concerned a landlord who, in 2018, had purchased several units in the ‘Presqu’île de la Touques’ holiday residence and had let them under a commercial lease to the operator Pierre & Vacances for a period of ten years. Following the Covid-19 health crisis, the operator suspended rent payments between March and June 2020, then made partial payments and applied various deductions to the rent due in 2020 and 2021.
Faced with persistent arrears, the landlord issued a demand for payment in October 2021 relating to arrears of nearly €20,000. Despite some settlements, the debt was not fully cleared until February 2024. In the meantime, the landlord had taken legal action against PV Exploitation France to seek the judicial termination of the lease and the eviction of the tenant.
The Lisieux District Court granted this application in November 2024, declaring the lease terminated at the tenant’s fault, ordering their eviction and ordering them to pay compensation for occupation until the premises were returned.
The arguments put forward by PV Exploitation France
Before the Court of Appeal, PV Exploitation France argued that the late payments were due to the exceptional consequences of the pandemic and the administrative measures that had affected the tourism sector from spring 2020 onwards. The company also argued that it had initiated conciliation proceedings and opened negotiations with the landlords to restructure the contractual arrangements.
In its view, as the arrears had finally been paid in full on 16 February 2024, no breach serious enough to justify the judicial termination of the lease could yet be established. It therefore sought the setting aside of the judgment and the dismissal of all the landlord’s claims.
The landlord countered that the company had unilaterally ceased paying rent for several years, without demonstrating any persistent financial difficulties and without being able to validly invoke the discussions entered into with certain landlords. He considered that the belated settlement of the debt did not negate the seriousness of the contractual breach committed.
Confirmation of a serious breach justifying the termination of the lease
The Court of Appeal noted that the tenant’s primary obligation is to pay rent on the agreed due dates and that judicial termination may be ordered where a sufficiently serious breach is established.
It noted that, despite the order to pay issued in October 2021, PV Exploitation France did not settle its debt until February 2024, more than two years after the formal notice and well after the end of the main health restrictions. The company did not provide any specific accounting evidence to establish that it was still unable to settle the sums due. On the contrary, it had failed to produce its own balance sheets and profit and loss accounts.
The court also emphasised that the financial reports of the Pierre & Vacances Center Parcs group revealed a rapid recovery in business from 2022 onwards. Following a significant drop in turnover during the crisis, the group had returned to and subsequently exceeded its previous level of activity as early as the 2021–2022 and 2022–2023 financial years.
Finally, the judges point out that the initiation of conciliation proceedings or the conduct of negotiations with certain landlords never had the effect of suspending the payment of rent. These circumstances could not therefore justify the continuation of such significant arrears over such a long period.
Scope of the decision
In view of the size of the rent arrears, the length of the delay in settling them and the lack of any serious financial justification, the court fully upholds the judicial termination of the lease, the eviction of the operator, the compensation for occupation and the orders already made. It further orders PV Exploitation France to pay an additional €2,500 pursuant to Article 700 of the Code of Civil Procedure, as well as the costs of the appeal.
This decision once again illustrates the severity with which the courts treat operators of holiday accommodation who have allowed rent arrears to persist for a prolonged period following the health crisis, even where these were eventually settled during the proceedings.
(0.00 out of 5)