Leaseback Covid-19 tenant defeated

Covid-19 and leaseback rents: Strasbourg District Court orders operator to pay all outstanding rent in full.

A new ruling in favour of holiday home landlords

In a judgment dated 26 May 2026, the Strasbourg Judicial Court ordered SMAS Tourisme to pay property investors the full amount of rent outstanding during the Covid-19 health crisis. This ruling is in line with the case law of the Court of Cassation, which denies operators of holiday residences the right to unilaterally suspend rent payments on the grounds of lockdowns and administrative closures.

The dispute involved Mr and Mrs L., owners of a flat in a residence operated by SMAS Tourisme, and the company itself, which had failed to pay several rent instalments between 2020 and 2021.

The commercial lease had been signed in 2009 and renewed in 2018 for a further nine-year period running until December 2027.

The origin of the dispute: the suspension of rent payments during the pandemic

Following the onset of the health crisis, SMAS Tourisme ceased payment of several quarters’ rent.

By means of a payment order issued on 28 September 2022, the landlords claimed a sum of €4,796.24 corresponding to rent remaining unpaid for several quarters in 2020 and 2021.

The operator justified its position by citing the impact of government measures taken during the pandemic. According to the operator, movement restrictions and administrative closures had made it impossible to run the residence normally and justified a temporary suspension of rent payments.

In the absence of settlement, the landlords brought the matter before the Strasbourg District Court to seek payment of the rent, statutory interest and damages for wrongful resistance.

SMAS Tourisme’s defence strategy

The company’s defence rested primarily on a specific clause in the commercial lease.

Article 5.3 of the contract provided that the tenant could ‘call the rent into question’ in the event of force majeure interrupting the residence’s commercial activity or in the event of circumstances causing a disruption to its operations. This clause specifically covered natural disasters, administrative obstacles or restrictions on the movement of people and goods.

SMAS Tourisme argued that lockdowns and travel bans constituted precisely the events covered by this clause.

According to the operator, tourist activity had been virtually paralysed for several months and the economic losses suffered justified the suspension of rent payments. It also cited several lower court rulings in favour of operators, as well as the exceptional and unforeseeable nature of the pandemic.

Landlords contest any rent exemption

The landlords, on the other hand, argued that rent remained payable despite the health crisis.

They pointed out that the Court of Cassation had already ruled that administrative closures linked to Covid-19 did not constitute a loss of the leased property, nor a breach by the landlord of their obligation to deliver the property, nor a case of force majeure allowing exemption from payment of a monetary debt.

The landlords also argued that the clause invoked by the operator should be interpreted strictly.

In their view, the text did not permit a unilateral suspension of rent but merely opened up the possibility of discussion or renegotiation between the parties.

Finally, they emphasised that the public aid measures granted to operators during the pandemic had helped to alleviate the economic difficulties encountered.

The court refuses to apply the force majeure defence

The court begins by recalling the principles established by the Court of Cassation.

The judges note that the administrative closure measures did not materially affect the leased premises. The flats remained accessible and fit for their intended purpose. Only the economic conditions of operation were disrupted.

The court also emphasised that an obligation to pay a sum of money cannot be suspended merely by invoking force majeure.

Consequently, lockdowns and health restrictions did not allow the tenant to be exempted from paying commercial rent.

The judges expressly refer to the rulings set out by the Court of Cassation in its judgments of 30 June 2022 and 15 June 2023 concerning commercial rent due during periods of administrative closure.

A restrictive interpretation of the lease clause

The court then examined the contractual clause invoked by SMAS Tourisme.

According to the judges, this clause did not allow the tenant to unilaterally suspend payments.

The expression ‘to call the rent into question’ does not imply either exemption from or automatic suspension of the rent. On the contrary, it presupposes negotiation between the parties or, in the absence of agreement, judicial intervention.

Furthermore, the judges considered that the second part of the clause was primarily intended to address malfunctions affecting the building’s common areas and not the general economic consequences of a pandemic.

Consequently, the company could not rely on this provision alone to suspend rent payments.

The operator’s liability

The court ultimately ordered SMAS Tourisme to pay the landlords the sum of €4,796.24 corresponding to the unpaid rent, together with statutory interest from the date of the order to pay issued on 28 September 2022.

However, the claim for damages for unreasonable resistance was dismissed, as the judges found that no specific bad faith on the part of the operator had been demonstrated.

The company was nevertheless ordered to pay the costs, as well as €1,800 pursuant to Article 700 of the Code of Civil Procedure.

Scope of the decision

This decision confirms a now firmly established trend: operators of holiday residences cannot justify unpaid rent linked to the health crisis on the grounds of force majeure, loss of the leased property, or the defence of non-performance. It also illustrates the particularly restrictive interpretation of the contractual clauses invoked to suspend or reduce rent during the pandemic. For landlords of holiday accommodation, this judgment constitutes a new favourable precedent in disputes relating to unpaid rent during the Covid period.