Decision no. 2020-887 QPC of March 5, 2021 by the French Constitutional Council addresses the question of the constitutionality of article L. 145-14 of the French Commercial Code, in particular the provisions concerning the eviction indemnity due to the tenant in the event of non-renewal of a commercial lease. Here is a summary of the main points of the decision:
Dispute
– Compagnie du grand hôtel de Malte**: The question prioritaire de constitutionnalité was raised by this company, which contested the potentially disproportionate nature of the eviction indemnity provided for in article L. 145-14 of the French Commercial Code. In the company’s view, this indemnity could infringe the lessor’s right of ownership, freedom of contract and freedom of enterprise.
Main points of the decision
1. Purpose of article L. 145-14 of the French Commercial Code :
– This article stipulates that a lessor who refuses to renew a lease must pay an eviction indemnity to the lessee, equal to the prejudice caused by the failure to renew. This indemnity includes the market value of the business, determined in accordance with industry practice.
2. Arguments of the Applicant Company :
– The applicant company contests the obligation to pay an indemnity that systematically includes the market value of the goodwill, regardless of the reality of the loss.
– It points to an alleged infringement of property rights and to differences in treatment contrary to the principle of equality before the law.
3. Examination by the Conseil Constitutionnel :
– Property rights : The Conseil Constitutionnel acknowledges that article L. 145-14 limits the right of ownership, but considers this limitation justified by the general interest objective of protecting the viability of businesses.
– Principle of Equality** : The decision affirms that the difference in treatment between commercial leases and other types of leases is justified and directly related to the purpose of the law.
4. Final Decision :
– The Constitutional Council ruled that the contested provisions do not disproportionately infringe property rights, nor violate the principle of equality before the law.
– It declared that the words “include, in particular, the market value of the goodwill, determined in accordance with the practices of the profession” comply with the Constitution.
Conclusion
The decision confirms the constitutionality of the provisions of article L. 145-14 of the French Commercial Code concerning eviction compensation.
It emphasizes that the legislator has taken into account the general interest and the rights of the parties involved in commercial leases, by allowing fair compensation for tenants evicted without lease renewal.
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