CGH Les Cimes Blanches: eviction compensation set at €42,373

CGH holiday residence ‘Les Cimes Blanches’: eviction compensation set at €42,373 following refusal to renew the lease.

A new eviction dispute at a CGH holiday residence

In a judgment of 22 May 2026, the Albertville District Court set the eviction compensation payable by the owners to Compagnie de Gestion Hôtelière (CGH) following a refusal to renew a commercial lease for a flat located in the ‘Les Cimes Blanches’ holiday residence in La Rosière. This decision is of particular interest in that it details the methods for assessing the loss suffered by a tourist residence operator in the event of a partial loss of its business assets.

The dispute concerned an apartment, a cellar and a parking space let under a commercial lease to CGH from 28 June 2007 for a term of eleven years. In 2015, the properties were acquired by new owners who, on 22 December 2017, served notice of termination with a refusal to renew but with an offer to pay compensation for eviction.

As no agreement could be reached on the amount of this compensation, CGH brought the matter before the court to have the loss assessed by the court. A judicial expert’s report was ordered before the court made a final ruling on the assessment of the compensation.

The principle of the right to eviction compensation was no longer in dispute

The question of the very right to compensation had already been settled by a previous judgment handed down on 5 March 2023.

The court had then rejected the landlords’ arguments that CGH should be denied any compensation due to alleged breaches of its contractual obligations. As this issue had been definitively settled, the debate centred solely on the amount of compensation due to the operator.

CGH claimed compensation of €48,162, arguing that the refusal to renew the lease had resulted in a significant financial loss. The landlords, on the other hand, considered that the compensation should not exceed €32,900.

A partial loss of the business, not a total loss

The court began by reiterating the principles of Article L.145-14 of the Commercial Code. Eviction compensation is intended to remedy the loss resulting from the failure to renew the lease and primarily comprises the market value of the business lost by the evicted tenant.

The judges noted that CGH operated a four-star tourist residence comprising 152 apartments. The refusal to renew the lease concerned only one apartment, a cellar and a parking space. The company therefore continued to operate the rest of the residence.

The loss therefore did not correspond to the total loss of the business but to a partial loss thereof. The compensation should therefore be calculated as replacement compensation corresponding to the fraction of the business lost by the operator.

Rejection of several valuation methods proposed by the expert

The court-appointed expert had examined several valuation methods.

The court first rejected the method inspired by a judgment of the Paris Court of Appeal, which involved applying a coefficient to the residence’s gross margin and then applying a rent ratio to the result. The judges considered that this method mixed data relating to the entire residence with data specific to the disputed unit and did not allow for a correct assessment of CGH’s actual loss.

They also rejected the method based on amicable settlements observed in other cases, due to a lack of objective evidence to verify its relevance.

The so-called ‘rent multiples’ method was also rejected. According to the court, this approach is based on the landlord’s income, whereas the eviction compensation is intended to compensate the tenant for their loss. According to the judges, no direct economic link justifies calculating the value of the lost business based on the amount of rent paid to the landlord.

The methods selected: turnover and gross operating surplus

The court ultimately favoured the two methods traditionally used in the valuation of business assets: the turnover method and the gross operating surplus (GOS) method.

With regard to turnover, the expert had used an average of €18,706 excluding VAT, calculated over the financial years 2018, 2019, 2022 and 2023, with the years 2020 and 2021 excluded due to the exceptional disruptions caused by Covid-19. After applying a coefficient of 1.5, the resulting value amounted to €28,059.

Regarding EBITDA, the loss of earnings suffered by CGH had been assessed at €12,597. By applying a multiple of 4.5, the court arrived at a value of €56,687.

Eviction compensation set at €42,373

To arrive at a balanced assessment, the court decided to use the arithmetic mean of the results derived from the two methods deemed relevant.

This average led to the eviction compensation being set at €42,373, a sum to be borne by the owners.

The court, however, refused to award any additional compensation, as CGH had failed to demonstrate any specific relocation costs, any separate commercial disruption, or any other additional loss. Each party bore its own costs and no compensation was awarded under Article 700 of the Code of Civil Procedure.

Scope of the decision

This decision is of particular interest in disputes concerning holiday residences. The Albertville court confirms that the loss of a single flat within an operating residence constitutes a partial loss of the business, giving rise to a right to compensation. Above all, it favours an economic approach based on the turnover and EBITDA specific to the unit in question, whilst rejecting methods based on rent paid to owners or on insufficiently documented transactional practices. This reasoning thus provides a particularly useful framework for analysing future eviction compensation disputes involving operators of tourist residences.