Litigation in France

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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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Eviction of a Tenant under the French Law

a village with old houses in france

1) If the tenant is not paying rent

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).

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 give the landlord leverage and the tenant enough time to repay his debt.

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) If the tenant / resident breaches the leasing contract

The lessor/landlord has to notify a notice to remedy the breach (ie an official warning).

The termination of the lease is granted only for serious problem during the tenancy.

3) Filing a case in Court

In court, you can ask for past rent, as well as the termination of the lease.

Quite often, the tenant pays past rent 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 max. if commercial lease).

If the tenant appears 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.

Regarding the legal fees, the judge can require the tenant to reimburse all the legal fees.

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

4) Eviction process (Bailiff and the Police)

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

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

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

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Contract with the French real estate agent

FRENCH REAL ESTATE CONTRACT

MISTAKES WHEN HIRING A FRENCH REAL ESTATE AGENT

Be certain to completely understand the real estate agent fees. For example, is it a fixed price contract, or based upon a percentage of the sale ?

WATCH OUT FOR OVER-QUOTES TO WIN THE CONTRACT

The initial selling price quoted by the real estate agent is often optimistic, in order to gain your business.

It is likely that your property will be sold at a lower price and we recommend that you agree to a percentage (vs. fixed fee) contract with the agent.

PITFALLS WHEN SIGNING WITH AN AGENT IN FRANCE

Legal rules applying to an exclusive agreement signed with a real estate agent:

  • A 3 months contract with 15 days notice,
  • If you sell the property yourself during the exclusive contract period, you are likely to be subject to paying all or most of the agent’s fees anyway (100 % or sometimes 50 % (Subject to the Contract).

You could be tied to a real estate agent, even if you want to terminate this contract.

A non exclusive agreement

If the real estate agent seems to be trustworthy, just sign a non exclusive agreement with the real estate agent.

ADVICE

A word of Advice

  • Don’t sign anything before obtaining qualified legal guidance
  • Hire a lawyer in France to review the contract (approx. cost: 200 euros).

Worst scenario: the exclusive agreement was a bad idea

Sometimes, the sale of the house/apartment is locked in an exclusive agreement (“mandat exclusif”), even if the real estate agent in France is not looking for new clients.

In some cases, the real estate agent in France will advise you after few weeks/months to lower the price.

Two possible reasons:

  1. The French real estate agent wants to quickly sell the real estate without too much effort,
  2. The quote was way above the market (in order to win your contract).

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

Can I terminate the lease?

Beautiful view of Saint-Tropez, France with seascape and blue sky

TERMINATION OF A FURNISHED HOUSING 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)

TERMINATION OF AN UNFURNISHED HOUSING LEASE (FRENCH LAW)

If the apartment or house is unfurnished, the termination of the lease is governed by article 15 of the 6th July 1989 law.

TERMINATION BY THE TENANT

The tenant can terminate the lease AT ANY TIME during of the three year-lease and WITHOUT ANY JUSTIFICATION.

The duration of the notice period is:

  • ONE MONTH (in Paris and big cities or if there is a medical reasons, loss of job, new job, RSA …)
  • 3 MONTHS notice in other case.

TERMINATION BY THE LANDLORD/LESSOR

The landlord is allowed to terminate the lease ONLY IF:

  • Selling of the real estate
  • The landlord or his children or parents are to move into the apartment
  • Long term repairs in the flat are necessary

Late or unjustified notice by the landlord: Lease Renewed for 3 years

Beware, the lessor has to be careful. A late notice or a legally unjustified notice, will renew automatically the lease for 3 years.

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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