I. Dispute between the S.A.S. Office Hôtelier du Logement Étudiant (OHLE)
The ruling handed down by the Paris Court of First Instance on January 24, 2024 concerns a dispute between S.A.S. Office Hôtelier du Logement Étudiant (OHLE) and the couple [H] [Z], owners of a studio apartment leased to OHLE under a commercial lease. The dispute concerns the validity of a notice of termination issued by the lessors, who wished to end the lease without offering to renew it.
II. OHLE’s application to cancel the lessors’ notice to quit
In 2016, husband and wife [H] [Z] acquired a studio apartment in a student residence operated by S.A.S. OHLE. The studio had been subject to a commercial lease since 1999, initially concluded between the former owners and OHLE, and tacitly renewed after its expiry in 2008.
On February 10, 2020, husband and wife [H] [Z] sent OHLE a registered letter of termination with refusal to renew, effective August 31, 2020. OHLE contested the validity of this notice, arguing that it did not comply with the mandatory formalities set out in article L. 145-9 of the French Commercial Code, which requires that notice be given by extrajudicial act.
In response to this challenge, OHLE applied to the Paris Court of First Instance to have the notice cancelled.
III. Legal issues
The central issue is whether the notice given by the couple [H] [Z] is valid in light of the formal requirements imposed by article L. 145-9 of the French Commercial Code, which stipulates that any notice given by the lessor must be served by extrajudicial act.
IV. Notice by registered letter cancelled
The Court ruled that the notice of termination delivered by registered letter on February 10, 2020 by husband and wife [H] [Z] to OHLE was null and void. It pointed out that, under article L. 145-9 of the French Commercial Code, notice of termination must be given by extrajudicial deed, failing which it is null and void. As spouses [H] [Z] had not complied with this imperative formality, the court concluded that the notice was irregular.
The Court also ordered spouses [H] [Z] to pay OHLE the sum of 2,000 euros pursuant to article 700 of the French Code of Civil Procedure, plus costs.
V. Lessors trapped by OHLE
This ruling highlights the importance of formalities for commercial lease notices. The strictness with which the courts apply the provisions of article L. 145-9 of the French Commercial Code underlines the need for lessors to be extremely vigilant in complying with formalities when issuing a notice to quit.
In this case, the failure of husband and wife [H] [Z] to serve the notice by extrajudicial act was sufficient to render the notice null and void, irrespective of the will of the parties or the circumstances surrounding service. This decision reaffirms the imperative nature of the legal procedure and serves as a warning to lessors of the importance of scrupulously following the legal provisions, failing which they risk having their actions declared null and void.
Furthermore, the Tribunal’s decision to award OHLE irreducible costs under article 700 of the Code of Civil Procedure also demonstrates the potential financial impact of non-compliance with procedural requirements.
VI. Conclusion
The January 24, 2024 ruling is a reminder to landlords of the importance of complying with the formalities imposed by the French Commercial Code on notices of termination. In the context of student residences, where commercial leases are common, this ruling underlines the need for landlords to have a good grasp of the legal aspects involved in terminating leases, or risk seeing their notices invalidated and having to bear additional financial consequences.
Tribunal judiciaire de Paris, 18th chamber, 2nd section, January 24, 2024 – n° 22/01721
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