French Leaseback: an important victory for owners

🔎 Tourist residences: an important victory for landlords – The Court of Cassation reiterates the limits of “single” use

Landlords of tourist residences have just obtained an essential clarification.

In a ruling dated October 16, 2025, the Court of Cassation reiterated that co-owners remain completely free to use their lot, provided that they do not interfere with the intended use of the building.

👉 In other words: co-ownership regulations cannot impose, by simple interpretation, that all units—including those outside the 70% mandatory rental perimeter—be rented out by the sole operator.

In this case, a co-ownership association and the operator had prohibited two landlords from renting out their properties independently on a seasonal basis, on the grounds that it was essential to go through the residence manager.

The Court of Cassation overturned this decision:

✔ The rules merely reproduced the requirements of the Tourism Code but did not clearly prohibit other co-owners from freely managing their units.

✔ The judge cannot distort a regulation to impose a constraint that is not included in it.

✔ When more than 70% of the units are rented through the operator, the other co-owners can rent themselves, without disregarding the “tourist residence” designation.

This decision highlights a fundamental point:

💡 Landlords never lose their right of ownership.

They retain the right to dispose of their apartment, unless there is a clear, specific, and legally compliant restriction—which is far from being the case in many residences.

In a context where some operators or property managers attempt to impose “exclusive” rental obligations without a solid legal basis, this ruling constitutes a major legal weapon for landlords who wish to regain control over the management of their property.

It sends a strong signal at a time when the issue of the freedoms of owners in tourist residences is once again at the center of debate.

#touristresidences #landlords #co-ownership #case law #commercial leases #real estate law #owners #rental values #lawyer

This ruling by the Court of Cassation, handed down by the Third Civil Chamber on October 16, 2025, concerns a dispute between Mr. and Mrs. [W], owners of a unit in a tourist residence, and the co-owners’ association of that residence, the Association of Owner-Operators (APEXVO), and the Operating Company (SEVOR). The latter had sued Mr. and Mrs. [W] to prohibit them from renting their property on a seasonal basis without going through SEVOR, the sole operator of the residence.

Facts and procedure

The residence in question is a real estate complex divided into 68 lots, the commercial management of which is entrusted to SEVOR. APEXVO was formed to enable the commercial operation of this residence. Mr. and Mrs. [W], owners of lot no. 64, did not join APEXVO and occasionally rented out their property. The co-owners’ association, APEXVO, and SEVOR then brought an action to prohibit any seasonal rental activity of their property without resorting to SEVOR.

Appeal court decision

In its ruling of January 25, 2024, the Rennes Court of Appeal ruled in favor of the co-owners’ association and SEVOR. It found that the co-ownership regulations required a single operator to manage the entire tourist residence, thereby prohibiting Mr. and Mrs. [W] from renting out their property without going through SEVOR.

Grounds for cassation

Mr. and Mrs. [W] appealed to the Court of Cassation, citing in particular the violation of Articles 8 and 9 of Law No. 65-557 of July 10, 1965, and Articles D. 321-1 and D. 321-2 of the Tourism Code. They argued that the co-ownership regulations, by merely reproducing the legal provisions, did not prohibit the direct rental of lots not used as part of the tourist residence. They also criticized the Court of Appeal for misinterpreting the co-ownership regulations.

Decision of the Court of Cassation

The Court of Cassation partially overturned the Court of Appeal’s ruling. It ruled that Article 1-1 of the co-ownership regulations, which reproduces the provisions of Article D. 321-2 of the Tourism Code, requires a single operator for the premises belonging to the tourist residence, i.e., at least 70% of the premises, but does not prohibit the direct management of the remaining units. Furthermore, Article 4 of the regulations provides that apartments not operated as part of the tourist residence may be occupied on a residential basis. The Court of Appeal therefore misinterpreted the clear terms of the regulations by prohibiting Mr. and Mrs. [W] from renting their property directly.

The Court of Cassation also overturned the rejection of Mr. and Mrs. [W]’s claim for compensation, which was linked to the rental ban. It referred the case back to the Angers Court of Appeal for a new hearing.

Scope of the ruling

This ruling clarifies the interpretation of the provisions relating to tourist residences in the context of co-ownership. It reiterates that co-owners are free to dispose of their private areas, provided that they do not undermine the purpose of the building. It also emphasizes the importance for the judge not to distort the documents submitted for his or her consideration.

Consequences

The Court orders the co-owners’ association, APEXVO, and SEVOR to pay the costs and to pay Mr. and Mrs. [W] €3,000 under Article 700 of the Code of Civil Procedure. The case is referred back to the Angers Court of Appeal for a new examination of the points that were overturned.

In conclusion, this ruling highlights the limits of the restrictions imposed by co-ownership regulations in the context of a tourist residence and reaffirms the rights of co-owners to freely dispose of their property, in accordance with the intended use of the building.

Court of Cassation, 3rd Civil Chamber, October 16, 2025, No. 24-14.303