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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.

Caen Court of Appeal, 28 May 2026 (Case No. 25/01294): dismissal of the application to set aside a Pierre & Vacances commercial lease on the grounds of fraud.

The facts: an investment in a holiday residence

In 2011, Mr and Mrs [C] purchased an off-plan flat in a holiday residence located in Deauville. This property was let under a commercial lease to the company Pierre & Vacances Résidences & Resorts France on 19 April 2016 for a term expiring on 30 September 2026.

Following difficulties encountered during the health crisis and unpaid rent, the owners brought legal proceedings against the companies PV Holding and PV Exploitation France. They sought, primarily, the annulment of the commercial lease on the grounds of fraud, claiming they had been misled when the contract was concluded.

As the Lisieux Judicial Court dismissed all their claims by judgment of 28 March 2025, they lodged an appeal.

The landlords’ argument: a waiver of eviction compensation presented as misleading

Mr and Mrs [C] based their argument on a letter dated 1 September 2015 sent by Pierre & Vacances Conseil Immobilier. In this letter, the group stated that the operator would waive its right to renew the lease and to claim eviction compensation at the end of the operating period.

According to the lessors, this statement constituted a decisive factor in their consent. They argued that the companies within the Pierre & Vacances group knew that this advance waiver was legally ineffective and that they had thereby created a mistaken belief on their part regarding the economic consequences of the transaction.

They therefore invoked the existence of fraud, within the meaning of the former Article 1116 of the Civil Code, and consequently sought:

• the cancellation of the lease;
• the eviction of the operator;
• payment of occupancy compensation;
• damages;
• coverage of any tax consequences arising from the cancellation of the contract.

The defence of Pierre & Vacances

The companies PV Holding and PV Exploitation France denied any fraudulent conduct.

They argued that the right to renew the commercial lease and the right to eviction compensation were expressly set out in several contractual documents signed by the investors:

• the reservation agreement;
• the commercial lease;
• the authentic deed of purchase.

In their view, the owners could not claim to have been misled when these provisions were set out in black and white in the documents they had signed.

The court’s reasoning: absence of fraud

The Court of Appeal noted that fraud cannot be presumed and must be proven.

It first observed that the reservation agreement signed as early as 2010 clearly stated the lessor’s obligation to pay eviction compensation in the event of a refusal to renew the lease, in accordance with Article L. 145-14 of the Commercial Code.

It then noted that the commercial lease signed in April 2016 also contained a specific and detailed clause providing for the payment of eviction compensation to the tenant in the event of a refusal to renew.

Finally, the authentic deed of sale also referred to this legal mechanism, without repeating the commitment invoked by the landlords.

In the court’s view, these contractual provisions were perfectly explicit and incompatible with the existence of any deception or fraudulent concealment.

The scope of the letter of 1 September 2015 dismissed

The court acknowledges the existence of the letter relied upon by Mr and Mrs [C], but considers that it cannot take precedence over the contractual provisions subsequently signed.

It emphasised that the lease was signed more than eight months after this correspondence and that the investors had ample opportunity to familiarise themselves with the terms of the contract and the notarised deed.

The judges noted that a contracting party, even a layperson, remains obliged to read the documents they sign and that there was no evidence to suggest that Mr and Mrs [C] had been prevented from doing so or coerced into signing.

Consequently, the letter of 1 September 2015 cannot be regarded as reflecting the parties’ common intention nor as evidence of a deliberate intention to deceive the investors.

The decision

The Court of Appeal fully upholds the judgment of the court of first instance.

It dismisses the application for the annulment of the commercial lease as well as all the ancillary claims of the owners.

Mr and Mrs [C] are ordered jointly and severally:

• to pay the costs of the appeal;
• to pay €2,000 pursuant to Article 700 of the Code of Civil Procedure to the companies PV Holding and PV Exploitation France.

Lessons from the judgment

This judgment illustrates the difficulty for an investor in a tourist residence to obtain the cancellation of a commercial lease on the grounds of fraud when the contractual documents clearly and repeatedly refer to the rules governing the status of commercial leases. The court here gives priority to the content of the booking contract, the lease and the authentic deed over an isolated pre-contractual correspondence. It also reaffirms the minimum duty of care incumbent on any signatory, even a non-professional, when entering into a commercial lease that voluntarily falls under the regime governing commercial leases.

Right of withdrawal and termination clause: the Montpellier Court of Appeal protects the tenant following the renewal of the lease

A classic case of dispute in the French leaseback sector

In a judgment of 26 May 2026, the Montpellier Court of Appeal provided significant clarification on the consequences of a landlord exercising their right of withdrawal and on the use of a termination clause following the renewal of a commercial lease.

The case concerned Grand Bleu, a company operating tourist accommodation, which had held a commercial lease covering several units in a tourist accommodation complex since 1 January 2007. The lease provided for an annual rent of €10,658.51 excluding VAT, as well as various maintenance obligations.

On 9 May 2017, the lessor, MB Gestion Immobilière de Résidences de Tourisme, had served a notice of termination with a refusal to renew, whilst acknowledging that it was liable to pay compensation for eviction.

The operator then claimed eviction compensation, initially in the amount of €30,000, then €89,475, as part of legal proceedings initiated in 2019.

The landlord’s change of heart: a complete shift in strategy

Withdrawal of the refusal to renew

Whilst the dispute over the eviction compensation was ongoing, the landlord exercised his right of repentance by deed dated 12 May 2020.

In this deed, he expressly withdrew his refusal to renew and consented to the renewal of the lease in accordance with Article L.145-58 of the Commercial Code. He also pointed out that the eviction compensation was no longer applicable.

A few years later, however, the landlord changed his approach and issued a demand for payment invoking the termination clause for an amount of over €9,000, corresponding to rent and service charge arrears dating back several years.

The judgment at first instance

The Perpignan Judicial Court held that the demand for payment was valid, found that the termination clause had been triggered, and ordered the termination of the lease as of 23 January 2023. It also ordered the eviction of the tenant and ordered them to pay compensation for continued occupation.

Grand Bleu appealed against this decision.

The issue of the limitation period for rent

The two-year limitation period set aside

One of the key points of the judgment concerns rent claims dating from before 2019.

The court had held that the landlord’s claims relating to rent for the years 2016 to 2018 were time-barred under the two-year limitation period provided for in Article L.145-60 of the Commercial Code.

The Court of Appeal took a different view.

It noted that the two-year limitation period applies only to claims brought under the provisions governing commercial leases. By contrast, a claim for payment of rent based on the terms of the contract falls under ordinary law and not under Article L.145-60.

The rent claimed was therefore not time-barred. The judgment was overturned on this point.

The decisive effects of the right of withdrawal

A renewal already secured

The court reiterates a fundamental principle: the exercise of the right of withdrawal does not constitute a mere offer of renewal but immediately brings about the renewal of the lease from the date of its notification.

From 12 May 2020, the parties were therefore bound by a new commercial lease resulting directly from the exercise of the right of withdrawal.

The impossibility of reversing this choice

In the judges’ view, the right of withdrawal constitutes an irrevocable decision by the landlord to waive the eviction indemnity and to continue the tenancy relationship.

Consequently, the landlord cannot subsequently use the termination clause of the expired lease to indirectly obtain what he had relinquished by exercising his right of withdrawal.

The court further noted that the order to pay mixed together claims arising before and after the renewal, even though the new lease was legally distinct from the expired lease.

Insufficient evidence of unpaid rent

An inaccurate statement of account

The court also found that the statement of account attached to the order was incomplete and did not take into account several payments made by the tenant.

The landlord himself acknowledged the existence of partial payments without incorporating them correctly into his calculations.

The grounds for the order deemed to have been settled

After examining the documents submitted, the court found that the sums claimed were not sufficiently substantiated and that the grounds for the order had been settled within the required time limit.

As no evidence of a breach by the tenant was provided, the termination clause could not take effect.

The ruling

The Court of Appeal quashed the judgment of the court of first instance in its entirety. It found that the lease had been renewed on 12 May 2020 by virtue of the right of withdrawal, ruled that the termination clause was deemed never to have taken effect, dismissed the landlord’s claims for eviction and payment, and ordered the landlord to pay the costs as well as €3,000 pursuant to Article 700 of the Code of Civil Procedure.

Practical implications of the judgment

This judgment is of particular interest to operators of holiday accommodation. It serves as a reminder that the right of withdrawal results in the immediate and irrevocable renewal of the lease. Once this choice has been made, the landlord can no longer seek to challenge the continuation of the lease by relying on prior breaches of which he was aware at the time the right of withdrawal was exercised.

Judicial termination of a commercial lease for a holiday residence: the health crisis does not justify non-payment of rent.

A tourist accommodation business facing significant unpaid rent

In a judgment of 26 May 2026, the Montpellier Court of Appeal upheld the judicial termination of a commercial lease entered into in a tourist accommodation complex and reiterated that the Covid-19 health crisis does not entitle the tenant to unilaterally suspend rent payments.

The case pitted Mr and Mrs [U], owners of several units in a tourist residence that subsequently became a residential complex, against the company Les Bains de Lamalou, the operator of the premises. The commercial lease had been entered into on 29 January 2014 for an initial annual rent of €5,343 excluding VAT, payable quarterly.

Following several years of unpaid rent, the landlords made repeated attempts at amicable resolution. An initial formal notice was sent in August 2021 for an amount of €11,665, followed by a second in January 2022 and then a demand for payment in February 2022. None of these steps resulted in the debt being settled.

In light of this situation, the landlords took legal action against the operating company in March 2022 to seek termination of the lease, payment of the outstanding rent, eviction of the occupant and payment of compensation for occupation.

A judicial termination ordered at first instance

The breaches attributed to the tenant

By judgment of 6 May 2024, the court ordered the judicial termination of the commercial lease on the grounds of breaches considered to be serious and repeated.

The judges identified two main breaches:

• non-payment of rent;
• failure to provide proof of insurance for the leased premises.

The court ordered Les Bains de Lamalou to pay €13,880.05, corresponding to unpaid rent between March 2017 and March 2023.

The company’s eviction was also ordered, accompanied by a monthly occupancy indemnity of €772.97 (excluding VAT) until the premises are effectively vacated.

The operator’s appeal

Les Bains de Lamalou challenged this decision before the Court of Appeal.

It argued primarily that the judgment was insufficiently reasoned and should be set aside. In the alternative, it sought to have the judgment overturned, contending that the alleged breaches were not sufficiently serious to justify termination of the lease.

It also sought a twelve-month payment extension to settle its rent arrears.

The rejection of the application to set aside the judgment

Reasons deemed sufficient

The operator criticised the court for having adopted its opponents’ arguments without addressing its own defences.

The court swiftly dismissed this complaint.

It noted that the duty to state reasons does not require judges to respond to every argument put forward by the parties, but only to those that are decisive to the dispute. As the original judges had met this requirement, the application for annulment was dismissed.

The health crisis does not exempt tenants from paying rent

The argument put forward by the tenant

The company Les Bains de Lamalou acknowledged that it had not paid certain rent instalments between the third quarter of 2020 and the first quarter of 2021. It considered, however, that the exceptional circumstances of the pandemic justified a more flexible interpretation of its contractual obligations.

It also contested that the lack of insurance could constitute a breach serious enough to warrant termination of the lease.

The court’s position

The judges noted that the payment of rent constitutes one of the tenant’s essential obligations within the meaning of Article 1728 of the Civil Code.

They endorsed the lower court’s reasoning that the health crisis could lead the parties to seek contractual adjustments in good faith, but did not permit the tenant to decide unilaterally to suspend rent payments or to disregard their contractual review.

The court further emphasised that the landlords had never agreed to waive rent for periods of closure linked to the pandemic.

The refusal to grant payment extensions

A financial situation insufficiently demonstrated

The company Les Bains de Lamalou sought a twelve-month extension to repay its rent arrears.

The court noted that Article 1343-5 of the Civil Code does indeed allow the judge to grant extensions where these appear compatible with the debtor’s financial situation and the creditor’s interests.

However, the operator produced no documents demonstrating its actual ability to settle the debt within the requested timeframe. Worse still, the evidence submitted revealed the emergence of new arrears during 2024.

The court therefore considered that it would be unrealistic to believe that the debt could be settled within twelve months.

Full confirmation of the judgment

The Montpellier Court of Appeal fully confirmed the first-instance decision. It upheld the judicial termination of the commercial lease, the eviction of the tenant, the order to pay the outstanding rent and the compensation for occupation.

It also rejects the request for payment extensions and orders Les Bains de Lamalou to pay the costs of the appeal as well as €3,000 pursuant to Article 700 of the Code of Civil Procedure.

Scope of the judgment

This decision is in line with the now established case law that the health crisis has not removed the tenant’s fundamental obligation to pay commercial rent. It also confirms that persistent non-payment, combined with other breaches of contract such as a lack of insurance for the premises, constitutes sufficiently serious misconduct to justify the judicial termination of a commercial lease.

Property sale agreement: failure to fulfil the loan condition precedent due to fault results in the loss of the deposit

A property purchase subject to the securing of financing

In a judgment of 29 May 2026, the Court of Appeal of Saint-Denis, Réunion, confirmed that a purchaser who fails to demonstrate that they have taken the steps required under the preliminary sale agreement to secure financing may lose the benefit of the loan condition precedent and be ordered to pay the penalty clause.

The case concerned a preliminary sale agreement signed on 10 November 2020 between SCI La Prédecelle Bruis and Messrs [S] relating to a property complex located in Saint-Joseph for a price of €328,000. The sale was concluded subject to the condition precedent of obtaining a bank loan. A deposit of €14,475 had been lodged with the notary.

The preliminary agreement stipulated that the purchasers must provide proof, by 31 January 2021 at the latest, of an agreement in principle from a lending institution or a loan offer. Failing this, the agreement would lapse. However, the deposit was to be refunded only if the purchasers demonstrated that they had taken all necessary steps to secure the financing.

The breakdown of the property project

The cancellation of the sale by the SCI

During the execution of the preliminary agreement, the purchasers made numerous contacts with various financial intermediaries, notably CAFPI, Meilleurtaux, Koytcha Conseil and Crédit Agricole. They were considering several legal arrangements involving various operating and management companies.

Despite these efforts, no agreement in principle nor any loan offer in accordance with the contractual terms was produced within the stipulated timeframes.

Noting the failure to fulfil the condition precedent and the expiry of the contractual deadlines, the SCI notified the buyers on 6 May 2021 of its decision to terminate the sale and claimed the right to the reservation fee.

The purchasers’ legal action

Believing they had taken the necessary steps, the purchasers brought proceedings against the SCI seeking:

• the return of the reservation fee of €14,475;
• reimbursement of costs incurred;
• compensation for loss of opportunity to invest;
• various additional sums in respect of interest and legal costs.

The civil court dismissed their claim in its entirety and ordered them to pay the SCI the sum of €16,400 corresponding to the penalty clause provided for in the preliminary agreement. They then lodged an appeal.

The legal issue

The court had to determine whether the purchasers could benefit from the protection attached to the condition precedent of obtaining a loan, even though no offer of financing had been obtained within the contractual time limits.

More specifically, the question was whether the steps taken were sufficient to establish that the failure of the condition precedent was not attributable to the purchasers.

The court’s analysis

Steps deemed insufficient

The court noted that the purchasers had indeed made several approaches to estate agents and banks before and after signing the preliminary agreement.

However, the judges observed that the applications for financing were not submitted in the purchasers’ own names, even though they were the sole beneficiaries of the preliminary agreement.

The documents produced actually concerned various structures envisaged for the future operation of the property:

• SAS Tourism Invest;
• SAS Lotus Développement;
• companies still under consideration;
• arrangements involving SCI, SARL or SAS.

The court found that no loan offer, nor even any confirmation of a loan application, had been drawn up in the purchasers’ own names in accordance with the terms of the preliminary agreement.

Failure attributable to the beneficiaries

The judges also emphasised that the substitution clause provided for in the preliminary agreement did not exempt the purchasers from clearly informing the seller and the notary of the use of a substitute company.

However, this information had never been formalised.

Furthermore, the bank agreement finally obtained on 17 May 2021 was dated after the expiry of the contractual deadlines and was itself conditional upon a capital contribution of €118,000.

In the court’s view, these factors demonstrate that the condition precedent failed due to the purchasers’ own actions.

Pursuant to Article 1304-3 of the Civil Code, the condition must therefore be deemed to have been fulfilled, which deprives the beneficiaries of the protection normally attached to the loan condition precedent.

Retention of the reservation fee

The court ruled that the reservation fee of €14,475 remains definitively retained by the SCI.

It noted that the preliminary agreement expressly provided that, where the failure of the condition precedent is attributable to the beneficiary, the latter loses their right to the return of the deposit held by the notary.

The purchasers’ claim for restitution is therefore dismissed.

Application of the penalty clause

The preliminary agreement also contained a penalty clause setting the damages payable at a flat rate of 5% of the sale price where the beneficiary fails to fulfil the obligations incumbent upon them.

The court considers that this clause is fully applicable since the purchasers caused the sale to fail through their own failure to fulfil the condition precedent.

The amount of the penalty thus amounts to €16,400, from which the reservation fee already paid is deducted.

Scope of the judgment

This decision illustrates the rigour with which the courts assess the obligations of a purchaser benefiting from a loan condition precedent. Merely demonstrating that steps have been taken with the bank is not sufficient. These steps must also comply with the terms of the preliminary agreement and be carried out in the name of the beneficiaries designated in the deed.

The judgment also reiterates that a purchaser who causes the suspensive condition to fail, whether through negligence or by arranging financing that does not comply with the contractual commitments, risks not only forfeiting their deposit but also being liable for the full payment of the penalty clause provided for in the preliminary sale agreement.

Compensation for eviction from a holiday residence: enforcement of a settlement reached following a notice of termination with a refusal to renew the tenancy.

A dispute arising from the refusal to renew a commercial lease

By judgment of 29 May 2026, the Albertville Judicial Court heard a case between a company operating a holiday residence and British landlords following the termination of a commercial lease with a refusal to renew it.

The tenant company operated a half-chalet within the “Côte Village” holiday residence under a commercial lease entered into on 17 December 2009 and expiring on 30 September 2018. On 12 April 2018, the landlords served a notice of termination with a refusal to renew.

Believing it was entitled to the right to renewal provided for under the Commercial Leases Act, the operator sued the landlords on 18 December 2020 to seek payment of eviction compensation, the appointment of an expert to assess the amount thereof, and recognition of its right to remain on the premises until such compensation was paid.

The case thus fell within the typical framework of disputes between private landlords and operators of tourist accommodation upon the expiry of a commercial lease.

Proceedings interrupted by negotiations

Dismissal of the case

Following the commencement of proceedings, the parties entered into amicable discussions.

These negotiations led the pre-trial judge to issue a dismissal order on 5 May 2022 to allow the parties to continue their talks.

The aim was to reach a settlement agreement bringing the dispute over the eviction compensation to an end.

The conclusion of a settlement

The discussions did indeed lead to the signing of a settlement on 2 December 2021.

Under this agreement, the parties had amicably settled the issue of the eviction compensation owed to the operating company. In return, the tenant had vacated the premises in accordance with the mutual commitments agreed between the parties.

However, despite this agreement, a dispute arose concerning its enforcement, leading the operating company to resume proceedings in February 2024 in order to obtain payment of the outstanding sums.

The parties’ claims

The operating company’s claims

In its final submissions, the operating company asked the court to order the lessors to pay €10,220.90, which it claimed corresponded to the sums still due under the settlement of 2 December 2021.

It also sought:

• interest at the statutory rate from 2 December 2021;
• damages for wrongful resistance;
• compensation under Article 700 of the Code of Civil Procedure.

The landlords’ defences

The landlords primarily raised a plea of nullity of the summons.

They argued that the documents had been served at an incorrect address and indirectly invoked the consequences of the limitation period applicable to commercial leases.

They also filed a counterclaim for €3,120 in respect of alleged rental repairs that were said to have been necessary following the operator’s departure.

Rejection of the plea of nullity

The court’s lack of jurisdiction to hear the plea

The court first noted that, pursuant to Article 789 of the Code of Civil Procedure, procedural pleas fall within the exclusive jurisdiction of the pre-trial judge when brought before him.

However, the landlords had raised this plea before the court even though the proceedings had already been heard under the supervision of the pre-trial judge.

The plea is therefore declared inadmissible.

The absence of a demonstrated cause of action

The judges add that, even if examined on its merits, this plea could not have succeeded.

The defendants appeared in court within the time limits, participated in the proceedings and even negotiated a settlement. No procedural prejudice was therefore demonstrated.

The court thus reiterates that a declaration of nullity on the grounds of a procedural defect cannot be made without proof of a grievance.

Enforcement of the settlement

An obligation that has become uncontested

The central point of the judgment lies in the analysis of the settlement reached between the parties.

The court found that the parties had definitively settled their dispute regarding the eviction compensation. The operating company had fulfilled its obligations by vacating the premises in accordance with the agreement reached.

In these circumstances, the landlords remained bound to fulfil their own payment commitment.

The court considered that this debt had become uncontested by virtue of the settlement alone.

The landlords’ liability

The landlords are ordered to pay the operating company the sum of €10,220.90, together with interest at the statutory rate from 2 December 2021.

This order is no longer based on the right to eviction compensation itself but on the binding nature of the settlement, which definitively established the parties’ rights.

The dismissal of the landlords’ claims

Regarding the claimed rental damages, the court notes that no inventory of fixtures was drawn up and that no serious evidence of the alleged damage has been produced.

On the contrary, the only photographs submitted to the court reveal that the premises were in a satisfactory state of repair.

The claim is therefore dismissed.

The court also rejects the claim for damages for wrongful withholding of payment brought by the operating company, finding that the delay in payment is already compensated by statutory interest.

The decision

The Albertville Judicial Court orders the landlords to pay €10,220.90 under the settlement, in addition to statutory interest from 2 December 2021. It also orders them to pay €2,000 pursuant to Article 700 of the Code of Civil Procedure, as well as costs. All counterclaims are dismissed. Provisional enforcement is automatic.

Practical implications

This decision serves as a reminder of the legal effectiveness of settlements reached in disputes concerning eviction compensation in tourist accommodation. Once the agreement has been signed and performed by the tenant, the landlord cannot renege on their commitments without risking a court order based not on the status of commercial leases, but on the binding nature of the settlement.

Nexity Studéa : Lyon District Court overturns a notice of termination refusing to pay any eviction compensation.

A landmark case concerning student accommodation

In a judgment dated 28 May 2026, the Lyon Judicial Court handed down a ruling of particular significance for operators of student accommodation run under commercial leases. The court was hearing a dispute between Nexity Studéa and AB Wealth Real Estate, the owner of a unit in the “La Duchère” student residence in Lyon.

The commercial lease had been concluded on 6 January 2008, taking effect on 1 September 2008, in favour of Lamy Résidences, whose rights were subsequently acquired by Nexity Studéa. The premises in question were an apartment operated as part of the overall student accommodation business.

After acquiring the property at auction in December 2019, AB Wealth Real Estate served Nexity Studéa with a notice of termination without an offer of renewal and without compensation for eviction, effective from 30 June 2021. The landlord considered that the operator had no right to renewal as it was not operating a business in the property in question.

Challenging this analysis, Nexity Studéa brought the matter before the civil court seeking either the nullity of the notice of termination or, in the alternative, payment of eviction compensation.

The landlord’s strategy: denying the existence of a business

A distinction between subletting and the provision of services

AB Wealth Real Estate argued that Nexity Studéa was in fact carrying out two distinct activities.

According to the company, the first activity consisted of the simple subletting of furnished accommodation, an activity which did not in itself constitute a commercial activity protected by the status of commercial leases. The second activity corresponded to hotel-style services provided mainly in the communal areas of the residence.

The landlord considered that these two activities could be separated and that the termination of the lease for a flat did not actually affect the commercial activity carried out in the communal areas.

The alleged lack of a dedicated clientele

AB Wealth Real Estate also argued that Nexity Studéa did not have its own clientele.

According to this argument, the students were simply occupying residential accommodation and the ancillary services were neither systematic nor indispensable. The landlord further asserted that some owners let their flats directly, which would demonstrate the absence of a genuine business attached to each dwelling.

Based on this reasoning, it considered that the termination without renewal and without eviction compensation was entirely justified.

Nexity Studéa’s position

A single and indivisible commercial activity

Nexity Studéa strongly contested this analysis.

The operator argued that its activity could not be split between subletting and the provision of services. In its view, the business assets lay precisely in the overall operation of a student residence, comprising the provision of furnished accommodation and the provision of hotel-style services for students.

The company argued that the activity carried out in each of the rented units formed part of the operation of a single business entity benefiting from the protection afforded by commercial tenancy law.

A claim for the nullity of the notice of termination

Considering the grounds invoked by the landlord to be unfounded, Nexity Studéa sought the nullity of the notice of termination and the continuation of the commercial lease. In the alternative, it sought recognition of its right to compensation for eviction and the appointment of an expert to assess its loss.

The court’s reasoning

Recognition of a business

The court noted that it is settled case law that the activity of subletting accommodation accompanied by the provision of services constitutes a commercial activity falling within the scope of commercial leases.

The judges emphasised that what matters is not whether the services are actually used by each occupant, but that they are offered to the subtenants. The provision of services constitutes an essential element of the commercial activity.

The court therefore finds that Nexity Studéa’s business consists of the subletting of student accommodation combined with a permanent offer of hotel-style services.

The existence of a specific clientele

The judges also reject the argument based on the absence of a clientele.

They consider that the students who choose the accommodation operated by Nexity Studéa constitute the operator’s specific clientele. This clientele is directly linked to the overall offering provided by the company, including services that may be used at any time during the tenancy period.

The court further notes that the landlord has produced no credible evidence to show that the services would be offered to persons outside the subletting network operated by Nexity Studéa.

The invalidity of the notice of termination

Having recognised the existence of a business operated under the disputed lease, the court found that the ground cited in the notice of termination was incorrect. The refusal to pay eviction compensation was based solely on the assertion that no business was being operated on the leased premises. However, this assertion was deemed unfounded.

As Nexity Studéa had chosen to rely on the invalidity of the notice of termination rather than immediately claiming eviction compensation, the court declared the notice of termination issued on 30 December 2020 to be null and void and ruled that the commercial lease should continue.

The decision

The Lyon Judicial Court annulled the notice of termination issued by AB Wealth Real Estate, which offered neither renewal nor compensation for eviction, confirmed the continuation of the commercial lease, dismissed all of the landlord’s claims, and ordered the landlord to pay the costs as well as €1,800 pursuant to Article 700 of the Code of Civil Procedure.

Practical implications of the decision

This judgment forms part of now well-established case law concerning student residences operated by Nexity Studéa. It confirms that an operator who sublets furnished accommodation offering hotel-style services operates a genuine business entity benefiting from the status of commercial leases. The landlord cannot therefore refuse to renew the lease or pay compensation for eviction on the grounds that no commercial activity is carried out in the accommodation in question.

A dispute concerning the renewal of a commercial lease in a holiday residence

By judgment of 2 June 2026, the Commercial Rent Judge at the Montpellier Judicial Court was asked to rule on a dispute concerning the setting of the renewed rent for a commercial lease entered into in a holiday residence operated by the company Belambra Clubs. The decision does not yet provide a definitive solution regarding the rent amount but orders a judicial valuation to determine the rental value of the premises.

The dispute concerns a one-bedroom flat with a floor area of 29.10 m² located in a tourist residence operated by Belambra. The commercial lease was signed on 2 November 2009 for the operation of a tourist residence business offering hotel-style services, including, in particular, furnished subletting, guest reception, provision of linen, regular cleaning and breakfast.

The contract was concluded for an annual rent of €5,587 excluding VAT and charges, subject to an indexation clause. The lease was due to expire on 30 October 2021.

The request for renewal of the lease

A request based on the market rent

By registered letter dated 30 July 2021, Belambra Clubs requested the renewal of the lease with effect from 31 October 2021, asking that the new rent be set at the market rent.

Subsequently, a preliminary statement was served on the landlord on 26 October 2023 in accordance with the procedure applicable to the setting of the renewed rent. In the absence of an amicable agreement, Belambra finally brought the matter before the commercial rent tribunal by writ of summons dated 22 October 2025.

A significant rent reduction sought

Belambra argued that the premises should be classified as single-purpose premises within the meaning of the Commercial Leases Act.

On this basis, it contended that the rental value should be determined using the hotel method typically applied to tourist residences.

The operator therefore requested that the renewed rent be set at €3,996 per annum excluding tax and service charges with effect from 31 October 2021, representing a significant reduction compared to the initial contractual rent of €5,587.

It also sought reimbursement of any rent overcharged, together with statutory interest and capitalisation of interest.

The arguments put forward by Belambra

The classification of single-purpose premises

Belambra argued that the premises had been specially designed and fitted out for the operation of a tourist residence.

In its view, this specific use justified the application of the regime for single-purpose premises provided for in Articles L.145-33 et seq. of the Commercial Code.

This classification is essential as it generally leads to the traditional rental comparison methods being set aside in favour of an approach based on the economic operation of the establishment.

The use of the hotel method

The operating company requested that the rental value be calculated using the hotel method.

It argued that this method should be based on actual achievable revenue rather than on theoretically advertised prices. According to its analysis, the determination of the rental value should take into account:

• the actual achievable turnover;
• the commissions borne by the operator;
• the performance of comparable residences;
• the specific characteristics of the establishment in question.

To support its position, Belambra produced an amicable expert report drawn up in November 2021.

The landlord’s failure to defend the case

An absent landlord

The landlord, Mr [I], did not instruct a solicitor and did not submit any observations to the commercial rent tribunal.

This lack of defence did not, however, exempt the court from rigorously examining the evidence produced by Belambra.

The limitations of the amicable report

The judge reiterated a well-established procedural principle: unless otherwise provided for by law, a judicial decision cannot be based exclusively on an amicable expert report commissioned at the request of a single party.

However, in this case, the court had only a single non-adversarial expert report drawn up at the tenant’s initiative.

The judge considered that this document was insufficient to enable him to determine with certainty the rental value of the renewed lease.

The decision of the commercial rent tribunal

A court-ordered expert assessment

Considering that it did not have sufficient evidence to resolve the dispute, the court granted Belambra’s alternative request and ordered a court-appointed expert assessment.

The appointed expert will be required, in particular, to:

• inspect the premises;
• describe their condition, intended use and floor area;
• examine changes in local market conditions;
• analyse the economic characteristics of the business;
• examine the rents charged in the neighbourhood;
• determine the rental value;
• propose the amount of the renewed rent, justifying the valuation method.

A particularly wide-ranging remit

The remit entrusted to the expert covers all the criteria set out in Article L.145-33 of the Commercial Code, as well as factors specific to the tourism sector. The report must be submitted by 6 April 2027.

Belambra must deposit a sum of €1,200 by 1 September 2026 to enable the expert assessment to commence.

Practical implications of the decision

This decision illustrates a common practice regarding the setting of renewed rent in tourist residences. Even in the absence of any challenge from the landlord, the judge refuses to rely exclusively on an amicable valuation produced by the tenant. Where the determination of the rental value involves complex technical assessments, particularly where a claim of single-use status is made and the hotel method is applied, a judicial valuation remains the preferred tool for informing the court prior to any final determination of the renewed rent.

A dispute arising from a contract for the provision of office space

In a judgment dated 28 May 2026, the Nanterre Judicial Court ruled on the consequences of the termination of a service contract relating to the provision of private offices. This decision is of particular interest in relation to penalty clauses, as it reiterates the court’s power to reduce contractual compensation that is manifestly disproportionate to the actual loss suffered.

The dispute was between Hiptown Exploitation, a company specialising in the operation of flexible workspaces, and SCI Kynan Patrimoine et Immobilier. On 19 September 2023, the parties had entered into a service contract for the provision of private offices in a building located in Paris.

The contract was concluded for a fixed term of three years from 1 January 2024. It provided for the payment of a monthly fee of €10,056 excluding VAT, as well as a security deposit of €20,112 excluding VAT.

Total failure to fulfil financial obligations

Failure to pay the security deposit

From the very start of the contract’s execution, SCI Kynan Patrimoine et Immobilier failed to meet its financial commitments.

The company never paid the security deposit, despite this being expressly provided for in the contract. This breach was the first factor leading to the dispute.

Unpaid fees

At the same time, none of the monthly fees due from January 2024 onwards have been paid.

In light of this situation, Hiptown Exploitation issued a formal notice on 30 April 2024 claiming:

• €20,112 in respect of the security deposit;
• €48,268.80 corresponding to the unpaid fees.

As this formal notice had no effect, the operating company notified the termination of the contract on 23 May 2024 on the grounds of breach of contract.

The proceedings brought before the court

Hiptown Exploitation’s claims

By writ of summons dated 10 September 2024, Hiptown Exploitation brought proceedings before the Nanterre Judicial Court.

It sought, in particular:

• a declaration that the contract had been terminated;
• an order requiring SCI Kynan to pay €438,019.20;
• procedural costs pursuant to Article 700 of the Code of Civil Procedure.

The sum of €438,019.20 corresponded to the application of a contractual clause providing for the payment of all sums that would have been due until the normal expiry of the contract.

The SCI’s failure to defend itself

SCI Kynan Patrimoine et Immobilier, despite having been duly summoned, did not instruct a solicitor.

The court therefore ruled on the merits in accordance with Article 472 of the Code of Civil Procedure, which requires the judge to verify personally that the claimant’s claims are valid, admissible and well-founded.

The nature of the disputed clause

A termination clause accompanied by a lump-sum indemnity

The contract contained a clause providing that, in the event of termination due to a breach by the beneficiary, the latter would remain liable for all sums due until the normal expiry of the contract.

This provision had the effect of requiring the SCI to pay the equivalent of all outstanding fees following termination.

A genuine penalty clause

The court noted that a clause setting in advance the amount of compensation due in the event of a breach of contract constitutes a penalty clause within the meaning of Article 1231-5 of the Civil Code.

The judges found that the disputed clause met this definition exactly, as it assessed the service provider’s loss on a lump-sum basis in the event of the client’s default.

They also held that the SCI’s breaches of contract were clearly established, as it had failed to pay either the security deposit or the fees provided for in the contract.

Judicial review of the penalty clause

Compensation deemed manifestly excessive

Whilst the court recognised the principle of contractual compensation, it nevertheless refused to apply the clause mechanically.

The judges emphasised that applying the clause in full would result in the SCI being required to pay the equivalent of thirty-six months’ rent, whereas the contract had only been performed for five months and the premises had never been occupied.

In these circumstances, the compensation claimed appeared disproportionate to the actual loss suffered by Hiptown Exploitation.

A reduction in the penalty

Exercising the moderating power provided for in Article 1231-5 of the Civil Code, the court significantly reduces the penalty clause.

Instead of the €438,019.20 claimed, it sets the compensation at €70,392 including VAT, corresponding to:

• five months’ rent, i.e. €50,280;
• the contractual security deposit of €20,112.

The court considers that this amount constitutes compensation proportionate to the actual loss suffered by the service provider.

The decision

The Nanterre Judicial Court orders SCI Kynan Patrimoine et Immobilier to pay Hiptown Exploitation the sum of €70,392 (including VAT) in respect of the termination of the contract for breach. It also orders the defendant to pay €2,000 pursuant to Article 700 of the Code of Civil Procedure, as well as all costs.

Practical implications of the decision

This decision illustrates the scrutiny exercised by the courts over penalty clauses, even where the breach of contract is indisputable. The court always retains the power to reduce contractual damages where they appear manifestly excessive in relation to the actual loss suffered. The judgment thus serves as a reminder that contractual freedom is limited by the requirement that the financial penalty attached to a breach of contract must be proportionate.

Judicial termination of a commercial lease even after a late payment of service charges

Late payment of service charges is not always sufficient

Under a commercial lease dated 30 August 2013, the owners granted the company Pierre & Vacances Exploitation France the use of a flat and a parking space located within a holiday residence. The lease was entered into for the purpose of operating a tourist residence or hotel-style accommodation, in return for an annual rent of €2,321 excluding VAT, as well as an annual right of residence.

Following the Covid-19 health crisis, the parties signed an amendment in July 2021 providing, in particular, for a significant rent waiver granted by the landlords and a commitment by the tenant to resume normal payment of rent and service charges thereafter.

The lease was subsequently continued by tacit renewal.

Believing that the tenant company was no longer paying the co-ownership charges and certain taxes for which it was contractually liable correctly, the landlords brought proceedings against PV Exploitation France before the Paris Commercial Court to obtain:

• the judicial termination of the lease;
• the eviction of the company;
• compensation for occupation;
• payment of arrears in service charges;
• reimbursement of rent waivers granted during the Covid period.

The claim for payment of service charges and taxes

The tenant’s contractual obligations

The lease placed the burden of most of the service charges relating to the building’s operation, as well as certain recoverable taxes, on the tenant. The 2021 amendment further reinforced this obligation by providing, in particular, for the payment of advances representing 90% of the estimated service charge budget.

The landlords produced the co-ownership statements, the property tax notices relating to the household waste collection tax, as well as several reminders sent to the tenant. They claimed a sum of €3,076.31.

PV Exploitation France’s arguments

The company maintained that it had already made several bank transfers intended to settle the charges claimed. It produced various payments made between 2020 and 2025.

However, the court noted that these payments had essentially been allocated to previous financial years and did not cover the sums due for the 2024–2025 period, in particular the provision for charges provided for in the amendment.

The judgment handed down

The court considered that the landlords had sufficiently demonstrated the existence of their claim.

PV Exploitation France was therefore ordered to pay:

• €3,076.31 in respect of contractual charges and taxes;
• interest at the statutory rate from 20 October 2025, the date of the summary submissions updating the claim.

The application for judicial termination of the lease

The complaint regarding non-compliance with the intended use of the premises

The landlords argued that the residence was no longer being operated as a three-star hotel. In their view, this situation meant they were losing certain tax benefits attached to their investment.

The court rejected this argument.

It noted that the use clause authorised the operation of a tourist or quasi-hotel residence with services. No provision required the maintenance of a three-star hotel rating or a particular standard of luxury. Moreover, the landlords provided no evidence demonstrating the actual loss of the tax benefits invoked.

Delay in payment of service charges

The court acknowledged that the tenant company had breached its contractual obligations for several years by failing to pay service charges and taxes by the agreed due dates.

However, the judges highlighted several mitigating circumstances:

• the parties had been in a contractual relationship for nearly thirteen years;
• the principal rent continued to be paid;
• the company had largely rectified its situation during the proceedings;
• the outstanding amount remained limited.

In these circumstances, the breach, although real, is not deemed sufficiently serious to justify the judicial termination of the lease.

The application for termination is therefore dismissed, as are the applications for eviction and compensation for occupation.

Reimbursement of Covid rent waivers

An effective contractual penalty clause

The July 2021 amendment expressly provided that in the event of the tenant’s failure to comply with its obligations, in particular regarding the payment of rent and service charges, the landlords would regain their rights to the rent waived during the health crisis.

The court found that the service charges had indeed not been paid in accordance with the agreed terms.

The landlords are therefore justified in seeking the application of this clause.

The order made

PV Exploitation France is ordered to reimburse:

• €1,710 corresponding to the rent waivers recovered;
• interest at the statutory rate from the date of the summons of 15 December 2023.

Scope of the decision

This decision illustrates the courts’ reluctance to order the judicial termination of a commercial lease where the tenant has continued to pay the principal rent and has settled the bulk of their outstanding debt during the proceedings.

However, the judgment highlights the effectiveness of settlement clauses agreed during the Covid period. Where a tenant fails to meet their commitments regarding service charges or rent, landlords may recover any rent waivers granted, even without successfully obtaining a court order to terminate the lease.