Leaseback in France : Common Expenses after Termination of the Lease

 

Once the commercial lease is terminated No more expanses of the operator

Leaseback in France

The French leaseback property is a hotel, belonging to a co-ownership of individuals.

Some co-owners   of a flat under a leaseback scheme have terminated their contract with the operating company.

The tenant wants to bill them for some of his commercial and touristic services in the building.

These co-owners of leaseback in France are not required to bear the expenses related to several contracts.

Especially, they don’t have to pay for the reception contract on the ground floor. Meaning, the labors contracts of operator’s employee. These costs were in the common expenses of the co-ownership before. Now, several co-owners are out of the original scheme in which the operating company takes care of everything and send invoices at the end of the year (paid on the rent directly). The leaseback in France is now managed by the operator, but you are no longer a part of it. You cannot continue to pay for the commercial et hotel services provided by the operating company.

The reception corner at the entrance of the building is  a commercial service of the operator, which has no utility or value for this co-owner of a leaseback in France.

The operating company of the leaseback in France lost the case against these co-owners.

French Law

Article D. 321-2 du code du tourisme ; articles 10 et 41-3 de la loi n° 65-557 du 10 juillet 1965

Cour de cassation, chambre civile 3, 18 février 2015, N° de pourvoi : 13-27104

How to terminate the lease of the operator ?

There are several ways to terminate the lease of the operator of a French Leaseback.

Usually, it after the commercial lease ends.

Termination of the Lease by the court

But, if there are several breaches of contract, it is possible to fill a case in court in order to ask for a termination of the commercial lease before the end.

It is a lost of income for the tenant, as a result, it has to a major breaches of contract.

First of all, unpaid rents can be seen by a judge as a major breach. Especially, if the operator didn’t pay after a CDP (commandement de payer) from a bailiff (official warning of termination if the debt isn’t paid within one month.

Late payments of the rent for several years are usually not a major breach of contract. Though, it depends of the judge

The tenant might keep his lease, if he pays the debt just before the hearing. Same result if the judge agrees to a schedule of payment.

Furthermore, non renting to tourist if it is a “tourism residence” according to the commercial lease, is also a major breach of contract. Likewise, Renting to everyone or to the town for emergency purposes of a student house is another breach of contract.

Finally, all the breaches of the provisions of the contract could be regarded as major, if there a lot of them. The court decides case by case, depending on the tenant and his defense.

This case law is usually applied to small business. Meaning when the tenant is the weak party in the negotiation. Therefore the protective commercial lease law should not apply if the tenant is a big group, like in leasebacks.
Unfortunately, it is still the case right now.

Non renewal of the Lease

At the end of the lease, the lessor (landlord) can give notice according to the notice period stated in the commercial lease. BUT, the lessor has to pay damages (indemnité d’éviction). It can represent 2,5-3 years of EBE of the operating company.

Consequently, there are here two options. The first option is to negotiate with the tenant (the operator).

The second option is to ask the court to appoint a judicial expert. He will calculate the legal price of the eviction (the kind of damages).

However, lessor (landlord) and lessee (tenant) sign usually a settlement agreement after the demand of appointment of a judicial expert or during the expertise.

Furthermore, the lessor can give notice even after the end of the lease (or there not enough time to give notice within the notice period before the end of the lease).

For example, if the notice period is 6 months, the lessor can give notice after the end of the lease, for a date after six months starting on the next quarter.

You may ask for legal advice from 18 months before the end of the commercial lease.

The lawyer has to be specialized in the field of French commercial lease and French Leaseback in order to be able to give proper legal counsel.

French Leaseback : Termination of the lease without damages (indemnité d’éviction)

Leaseback Properties Contract written with wilful misrepresentation (indemnite d’eviction)

Leaseback properties in France. Private individuals agreed to a leaseback scheme in France (buying and renting to an operating company)

Summary

  • The operator (tenant) waives the eviction compensation in the commercial lease, knowing that this waiver is not valid (not enforceable).
  • The judges cancel the lease. The operator of the French leaseback property (tourist residence) is not entitled to an eviction indemnity (damages called in French : indemnité d’éviction).
  • The bad faith of the tenant, who drafted the commercial lease turns against him.
  • This case law could be a huge step forward in the right of owners of a French leaseback property.

Abstract

The (tenant) lessee, is a company specialized in the management of leaseback properties.

The operator writes the lease with bad faith. Because he pretends to waive in advance his right to damages, if the the lessor end the contract. (eviction indemnity/(damages called in French : indemnité d’éviction).

According to the French law, the tenant (lessee) cannot waive in advance and in the lease his right to an eviction indemnity in case of non-renewal of the commercial lease.

He can waive this right to damages AFTER signing the commercial lease.

But in this case, the operator is a pro of this industry. He waives his right knowing well that this clause has without legal ground. Even if, it was for the lessor a substantial condition of the contract, ie one main reason why the buyer agreed to the leaseback.

The tenant (operator) acted with the intention to willfully misrepresented the content of the lease contract.

The operator of the leaseback property falsely reassured the buyer/lessor in the legitimate belief that his renunciation constituted a real commitment.

This behavior is analyzed as a “wilful misrepresentation” (dol in French), meaning a fraud when writing the contract.

Wilful misrepresentation and statute of limitations

Wilful misrepresentation

The buyer of the French leaseback property signed a leaseback contract with a operating company. However only the tenant wrote the lease contract.

The waiver to an eviction indemnity could only appear as a decisive element of the deal.

Most importantly, the buyer of the French leaseback would (or might) not have signed the contract.

If their attention had not been attracted by this financial interest, they might not have contracted.

Indeed, the cost of more than € 13,000 claimed as compensation for eviction weakened the profitability of the operation for the owners.

The legitimate belief in a waiver of the lessee  continued throughout the lease. They served a notice without eviction compensation. It was served in accordance with paragraph 6 of the lease.

Statute of limitations of 2 years

Otherwise, the tenant is claiming a statute of limitation of 2 years to cancel the lease. However, the statute of limitation of 2 years begin to run, when the victim is informed. In this case, it is the date of the registered mail addressed to the  owners by the operating company.

That’s why the wilful misrepresentation (fraud) leads the judges to cancel the commercial lease.

Furthermore, the court decides the paid rents were due for operating the leaseback property without a lease contract. The cancellation of the lease means it is like it had never existed.

Cour d’appel de Montpellier, 10 janvier 2017, N° de RG: 14/06714

Mistakes to avoid when buying in a student residence

Pitfalls to avoid when buying property in a student residence

What mistakes to avoid before buying in France ?

BE ON THE ALERT: Don’t be blinded by the tax benefits

1. The mirage of the “guaranteed” financial investment “without risk”

You are not buying a “financial product” – a “guaranteed investment without risk”. The selling point of “tax exemption” in France should not make you forget that it is a PROPERTY PURCHASE carried out by YOU ONLY. It is the only version of reality which will appear on the contracts and legal documents you sign in France.

The fact that you neither created the documents, nor signed them in person, nor even saw the property is no excuse under French law (actually this is similar to the laws in most countries).

2. Buying property that is much too expensive in medium-sized towns

A common mistakes is believing that the law will protect you against loss incurred when buying such property in France. The tax benefit should not lead to the purchase of a property that will be unsellable (and sometimes hard to rent) in the future.

3. Buying  in a student residence without checking the number of students and the local market

You should invest in a student residence in cities with a strong university potential (Lyon, Bordeaux, Lille, Marseille, Nice or Montpellier) to ensure an occupancy rate that is high enough for the operating leaseholder and the lessor who will be paid only if the company makes a profit. Beware of investments in medium-sized towns already jammed with housing where the developer who approaches you is offering hundreds of accommodations in addition to yours.

4. Don’t invest in a student residence which is badly located even in a City full of students

Despite all the “guarantees” offered by the sales representative who approaches you, you must not forget the golden rule of property purchase: LOCATION, LOCATION, LOCATION.

THREE TIPS TO AVOID MISTAKES

  • Enquire about the rental market (existing studies) and the schools and universities in the proposed town/city,
  • Check the exact location of the accommodation (using googlemap, google earth or mappy, for example) to avoid buying property that is too far from the main schools.
  • Involve local experts, who know the market. We can help.

RISKS

  • Frequent and recurring risk of unpaid rents (for several years sometimes)
  • Attempts by the company that holds the lease to renegotiate a lower rent
  • Capital loss on the property’s sale, including after 10 years (!)
  • Bankruptcy of the company that holds the lease
  • Substantial work to be funded after ten years or so, despite low rental income

PLEASE FEEL FREE TO ASK YOUR QUESTION (FREE OF CHARGE)

We believe in LOW COST and CLIENT ORIENTED legal services in France for English speaking customers.

WHO ARE WE ?

  • Lawyers members of the Paris Bar since 10 and 13 years
  • English-speaking lawyers (we used to live in Sydney and we love to travel)
  • Doing Business mainly in Paris and on the French Riviera but able to represent you all over the country

WHY US ?

  • We know what it feel like to be a “foreigner” and not understand a word of the situation
  • We answer our phones (and phone calls/skype are free!)
  • We are small : you case will be taking care of by one the main partner

Me Bruno Traesch on radio FRANCE BLEU:

http://www.francebleu.fr/emissions/les-experts-france-bleu-107-1/maitre-bruno-traesch-expert-en-droit-de-l-immobilier

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Real estate Latent Defects (vice caché) French Law

Legal remedies Legal definition of Latent Defect

The issue of latent defect causes numerous real estate disputes

According to article 1641 of the French civil code: « A seller is bound to a warranty on account of the latent defects of the thing sold which render it unfit for the use for which it was intended, or which so impair that use that the buyer would not have acquired it, or would only have given a lesser price for it, had he known of them ». The latent defect affecting the building impairs the use for which it was intended; is latent and unknown to the buyer, and must exist before the sale.

What are the remedies available to the buyer who discovers a latent defect after the sale ?

Under the French Law, a latent defect has to affect the use of the building or so impair that use that the buyer would not have acquired it, or would have given a lesser price for it. When the buyer is not a professional, the defect is considered latent, if he may legitimately have been unaware of the defect at the time of the sale, after having inspected the building with the conscientiousness normally demonstrated by someone who is concerned with his best interests. The clause which excludes the warranty against latent defects is valid between non-professionals but it can only be used by a seller who was unaware of the defects affecting the building, in good faith (article 1643 of the French civil code). The clause cannot be used in case of gross misconduct (corrupt practices or withholding of information). If the seller was aware of the latent defect of the building, his bad faith is established. (article 1645 of civil code, Cass. 3e civ., 18 juin 2008, nos 06-20.713 et 06-21.062, Bull. civ. III, no 110). The professional seller is expected to be aware of the defects of the building, so he is considered as a seller of bad faith.

How long after the signature of the notarial deed can the buyer put forward the notion of latent defect ?

According to article 1648 of the French civil code, the buyer may take legal action for latent defect up to two years after he discovered the defect.

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Buying property in France that needs refurbishing

Buying a property in France that needs refurbishing – Lowering of the sale price

Buying property in France: you better be careful before signing any binding agreement.

How to negotiate the sale price when buying property that is to be renovated

Negotiate a lowered price BEFORE the signature of the prelimenary sale agreement (called under the French Law: promesse de vente)

Many buyers negotiate a lowered price taking into account the renovation work. Before buying property for a reduced price, verify if there are no hidden issues.

If an agreement is reached, the price stipulated is fixed (allowing for legal exceptions). It is crucial to carry out an evaluation in order to establish the actual cost of the work to be carried out. The evaluation helps to detect the non-conformities and to establish the actual cost of the work, and the contractor performing the evaluation will be responsible for any fault or omission. Here is some guidance about how to negotiate the price of a renovation project and avoid unpleasant surprises.

Hire an architect or a real estate expert to assess the actual costs

Firstly, we advise you to hire an architect or a real estate expert to carry out a reliable evaluation of the works. Save a lot of money and prevent unpleasant surprises (latent defects). Our second advice is to contact several potential contractors. You can compare them with the evaluation of the expert or the architect.

In this way, you will be able to select the lowest bid. Negotiate the lowering of the price during the seven day-withdrawal period after the agreement has been drafted. The withdrawal period begins with the reception of the agreement by registered mail or delivery to the addressee in person. During that time, the buyer can make a counter-proposal or abandon the sale without incurring legal penalties.

Buying Property : Hire a real estate lawyer in France

First question and first answer are free of charge

We believe that, in the end, our services are an investment to protect you and keep your total costs as low as possible. These costs are not just the initial property price, but later unexpected renovations, and complicated legal issues. Please contact us. We can offer an initial response quickly and free of charge. We hope to earn your trust and become your legal advisors in France.

Our firm believes in a first phone call or email free of charge. It is a good way for the lawyer to prove his client he knows the field. It is the best for both parties to see if the relationship can be successful.

Review the real estate contract

We can review a real estate contract for a few hundred Euros, to insure that you are protected, and to explain your obligations and those of the other party. Our lawyers practice french real estate law on a everyday basis. We know the pitfalls and legal loopholes. However, we understand our client do not want to spend to much on contract review.

Write some new clauses for the real estate contract

When buying property in France you should ask for legal advice.

A lawyer can write some clause in the contract in order to secure your investment. It could help if anything goes wrong.

A lawyer is working for his client, not for the sale

The buyer pays the notary only if the sale is signed. A lawyer is paid for his work. A lawyer works for the client, not for the sale. Feel free to ask us any question related to the French law.

Me Bruno Traesch on radio FRANCE BLEU, in FRENCH:

http://www.francebleu.fr/emissions/les-experts-france-bleu-107-1/maitre-bruno-traesch-expert-en-droit-de-l-immobilier

Other related articles written by our lawyers:

Housing lease: Notice period under the French Law

How long is the notice period of a housing lease under the French Law?

You are lessor or tenant under a housing lease contract in France.

WATCH OUT: the landlord cannot give notice at any time and for any reason, see:  Can I terminate the lease ?

HOUSING LEASE OF A UNFURNISHED FLAT

6 months for the landlord

If the flat or house is UNFURNISHED, the lease is governed by the July 6th, 1989 law. Article 15 of the July 6th 1989 law states that the notice period is six months before the end of the three-year lease if it is the landlord who wishes to terminate the lease.

1 or 3 months for the tenant AND at any time

The tenant who wants to leave his flat/house has to give a  3 months notice period, at any time during the lease.

The notice period for the tenant is 1 month if:

  • the apartment is in Paris (“zone très tendue”)
  • A first job
  • A new job after a recent job loss
  • A transfer to a far location
  • The tenant has a serious medical condition and has to move for medical reasons (if lease signed after 27th March 2014).
  • The tenant is a beneficiary of the welfare income “RSA”.

HOUSING LEASE OF A FURNISHED FLAT

Article L. 632-1 of the Code de la construction et de l’habitation

Article L. 632-1 of the Code de la construction et de l’habitation  governed the lease if :

  • the apartment or house is furnished,
  • it is the main residence of the tenant.

1 month notice period for the tenant

The notice period is one month for the tenant of a furnished flat.

3 months notice period for the landlord

The notice period is three months for the landlord/lessor of a furnished flat.

Mandatory notice by registered mail

Tenant and landlord have to send the notice letter by registered mail (or by a bailiff).

Beginning of the notice period

It is only after the tenant or the landlord accepts the notification by registered mail, that the 1 month period starts.

If the tenant/the landlord does not collect the registered/return mail,  the tenant/the landlord has to hire a bailiff.

Ask your question to our English-speaking lawyers for advice.

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Selling a commercial lease in France

Selling a Commercial Lease in France

You own a French leaseback property ?

Under French law, if the tenant is selling his commercial lease, he has to notify the lessor and ask for the approval of the new tenant. But, the lessor needs a legal justification according to the case law.

In the field of French leaseback property, there are numerous such disputes wich result in a trial. We can help avoid this situation, wich could be costly and time-consuming.

Clause for Approval of the Commercial Lease Buyer

Following the approval clause, the transfer of the commercial lease to the buyer is submitted to the lessor for prior approval. However, the lessor cannot reject the new tenant without a strong reason. The case law is more in the tenant’s favor.

Tacit approval of the commercial lease buyer by the lessor

If the tenant has not carried out the approval formality according to the terms of the commercial lease, he may try to prove that the lessor has accepted tacitly and unequivocally the transfer of the lease (Cass. Com. 4.1.1965). We can advice you on the best legal protection against this occurence.

Examples of insufficient evidence of the unequivocal approval of the lessor

We cannot prove that the buyer has been unequivocally accepted by the lessor even with:

  • evidence that the lessor has received money from the buyer (Cass civ 3, 29/4/1969),
  • an offer to reach a settlement agreement which has come to nothing.

Evidence of the unequivocal approval of the lessor of a French leaseback property

We can establish that the lessor has given his unequivocal approval with:

  • the authorisation given to the buyer to have the gas company install gas fittings

Legality of the clause requiring the express and written authorization for any commercial lease transfer

The clause requiring express and written authorization for any lease transfer is legal. Nevertheless, if the lessor does not give his authorization without legal ground, the tenant can take legal action to obtain the authorization to sell the commercial lease.

Grounds for rejecting the agreement which are accepted by the court

The court recognizes the following reasons:

  • well-known insolvency of the buyer,
  • the activity of the buyer is incompatible with the commercial lease and requires the approval of the lessor in an additional clause which the lessor refuses to give,
  • the transfer of the lease without the business, when the commercial lease makes the transfer of the business mandatory.

What if the lessor refuses to approve the buyer?

A lawyer may ask the lessor – in a letter of formal notice – to clarify his reasons for refusing to approve the potential buyer of the commercial lease of the French leaseback property.

If the lessor persistently refuses to give his approval, a lawyer should be commissioned to initiate legal proceedings before the ‘juge des référés’ (Urgent Applications Judge).

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Termination Of A Furnished Lease Under The French Law

Milwaukee skyline and the apartment buidlings

TERMINATION OF A FURNISHED LEASE UNDER THE FRENCH LAW

FURNISHED AND MAIN RESIDENCE OF THE TENANT

IF the apartment or house is:

rented furnished

AND

Is the tenant’s main residence,

The lease is governed by article L. 632-1 of the Code de la construction et de l’habitation.

  • TERMINATION BY THE TENANT

AT ANY TIME

The tenant can terminate the lease AT ANY TIME during the one year lease and WITHOUT ANY REASON (No justification is needed).

1 MONTH NOTICE PERIOD

The tenant must do so with a 1 MONTH’s notice. The notice period is 1 MONTH for the tenant.

  • TERMINATION BY THE LANDLORD/LESSOR

TERMINATION SUBJECT TO SELLING, MOVING IN OR LONG TERM REPAIRS

However, the landlord is allowed to terminate the lease ONLY IF:

  • The apartment or house is to be sold,
  • The landlord or his children or parents are to move into the apartment,
  • Long term repairs in the flat are necessary,

3 MONTHS NOTICE PERIOD

The lessor/landlord has to give a 3 months notice period before the end of the one year lease renewed every year.

LATE NOTICE OR LEGALLY UNJUSTIFIED NOTICE

If the lessor gives a late notice or legally unjustified notice, the lease is renewed for 3 years.

Ask a question to our English-speaking lawyers (free of charge)

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Me Bruno Traesch on radio FRANCE BLEU:

http://www.francebleu.fr/emissions/les-experts-france-bleu-107-1/maitre-bruno-traesch-expert-en-droit-de-l-immobilier

Investment Property France: Tenant in France is not paying rent

 

Investment Property France: How to deal with a tenant who is not paying rent in France?

Unpaid rent, how to avoid it ? Badly, a real good guide buying property in France doesn’t exist.

A leaseback scheme is based by definition on a return rental and a mortgage and tax breaks. The French parliament is encouraging the building and offer of holidays homes in France.

The goal isn’t to live in France, but to invest in real estate in France.

The house price is often higher than market value, because it is based on the long term rental return (the rental yields for the home owner).

The buyer would ideally been informed by a French lawyer in the process of french investment and acquiring properties for sale in France.

Unpaid rent

When buying an investment property in France, you don’t think the tenant could not pay rent. It happens sometimes with rental properties in France (French Alps, riviera, Paris …).

The rental income of this French property funds the payment of your mortgage. You have to move quick and efficient. Only a specialized lawyer in France can provide you with this results on the long term.

Unpaid rent in France ? What should I do ?

Unpaid rent Insurance

There are some unpaid rents insurance. Usually, such insurance are more for housing properties than commercial premises.

Some lessor/landlord ask the lessee/tenant to provide a third-party guarantee (“caution”). It means that X will pay the debt (unpaid rents for instance) of Y.

Under the French law, you cannot have both insurance and a third-party guarantee. The owner has to choose between these two guarantees.

1°) First thing to do: Notification called a “Commandement de payer” (CDP)

If needed, the next step is an official order delivered by a bailiff.

The “Commandement de payer” is a notice that sets a time limit for your tenant to pay you (two months for a flat lease and one month for a commercial lease). This official order has to be delivered by a bailiff (our firm can hire a bailiff and follow his work).

If there a third-party guarantee (“caution”) of the lessee, the CDP has to be notified to the third-party guarantee too.

If not, the landlord lose his right to ask for the conviction of the third-party guarantee.

The “Commandement de payer” is mandatory before filing a case in court.

It states that if the tenant does not pay the arrears of rent within one month (or two months) the landlord can ask for the cancellation of the lease in court.

The CDP gives the landlord leverage and the tenant enough time to repay his debt (unpaid rent and unpaid building/common expenses).

If the tenant doesn’t comply with the demands stated in the CDP, your lawyer will bring a lawsuit against the tenant (payment and/or eviction).

Watch out! If you merely change the lock to avoid legal proceedings, the tenant may sue you. You risk being fined by the court and ordered to allow the tenant to stay (even if the rent is not paid).

2 months (housing lease) or 1 month later (commercial lease): We can initiate proceedings before the Judge des “référés” (quick and simple court proceedings)

2°) Unpaid Rent : File a case in Court

In court, you can ask for the debt, as well as the termination of the lease because of the unpaid rent.

A quicker proceedings is open in case of unpaid rent: the judge of Refere:

Article 808 :
In all cases of urgency, the president of the High Court may order in a summary procedure all measures that do not encounter any serious challenge or which the existence of the dispute justifies.

Article 809:

The president may always, even where confronted with a serious challenge, order in a summary procedure such protective measures or measures to restore (the parties) to (their) previous state as required, either to avoid an imminent damage or to abate a manifestly illegal nuisance.
In cases where the existence of the obligation is not seriously challenged, he may award an interim payment to the creditor or order the mandatory performance of the obligation even where it is an obligation to do a particular thing.

Third-party guarantee (“caution”) of the lessee

In case of a third-party guarantee (“caution”) of the lessee, the lessor has to file a case against this party too.

If the landlord doesn’t do it, he loses his right to ask for the conviction of the third-party guarantee.

Quite often, the tenant pays his debt in court during the (oral) pleadings.

  • A repayment schedule (36 months max.) can be decided by the Judge

The tenant is entitled to ask for a 36 months term of payment (24 months for a commercial lease). The lessee will have to pay each month his rent and a part of the unpaid rent.

If the tenant appears in court the day of the oral pleadings in court, the judge often sets a repayment schedule. If the tenant doesn’t pay on a  timely basis, meaning every month, the lease is terminated without having to refile a claim in court. The landlord is entitled to evict the tenant, with the help of the police and a bailiff.

What about the legal fees ? Who’s paying the lawyer and the bailiff ?

Under the French law the Judge has the freedom to decide based on fairness (meaning he does what he sees fair):

Article 700 du code de procédure civile:
As provided for under I of Article 75 of the Act n° 91-647 of 10 July 1991, in all proceedings, the judge will order the party obliged to pay for legal costs or, in default, the losing party, to pay to the other party the amount which he will fix on the basis of the sums outlayed but not included in the legal costs. The judge will take into consideration the rules of equity and the financial condition of the party ordered to pay. He may, even sua sponte, for reasons based on the same considerations, decide that there is no need for such order.

The owner has some legal expenses. Consequently, the judge can require of the tenant that he refunds all the legal fees. Badly, it is not always the result of the judgment. Too many judges are soft on the operating companies. the operator usually argue that the economy is difficult for tourism. Even if the market is at his highest right now in France !

The judgment for eviction is called “Ordonnance d’expulsion”.

3°) Eviction process (Bailiff and the Police)

The tenant has 2 months to move out voluntarily (following the notice called “Commandement de quitter les lieux”).

Then, the bailiff and the police will forcibly remove the tenant from your property.

Regarding commercial properties:

Usually, the evicted company leaves voluntary the premises. 

Regarding housing properties:

According to the French law, no eviction can be enforced between November 1st and March 15th (not applicable to a commercial lease).

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Litigation in France

Litigation word cloud concept with legal law related tags

Real Estate Disputes : Court Jurisdiction in France

Real estate disputes can be related to commercial lease, housing lease or selling contracts.

Lease disputes: several court jurisdictions

Housing Lease disputes

Housing lease disputes are decided by the Tribunal d’instance. (in Paris one in each arrondissement townhall)

Commercial lease disputes

The Tribunal de grande instance has jurisdiction over commercial lease cases.

Real estate disputes (selling contracts)

Two different courts can have jurisidiction over  real estate disputes, regarding the sale contract or the real estate agent, depending of the claim:

  • Tribunal d’instance if less than 10.000 euros;
  • Tribunal de grande instance, if more than 10.000 euros.

Role of the bailiff: eviction and freezing an account

1) Judicial notifications

Notifications of an official warning in case of arrears of rent or writ (written pleadings and information of the date of the pleading) or notice of eviction (after a judgment) have to be done by a sworn bailiff (called in France “huissier de justice”).

The costs are around 60-100 euros each notification, depending of the amount of the claim.

2) Eviction process

If a tenant who is not paying rent of the commercial or housing lease and not leaving the building after the judgment, the landlord has to start an eviction process.

The bailiff is in charge of the eviction process with the police and a locksmith, if needed.

3) Cease/freeze the bank account of the tenant

The bailiff can cease or freeze the bank account of the tenant.

Ask your question to our English-speaking lawyers in France (free).

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