Adagio Residence: Nanterre District Court upholds the decision not to renew the lease without compensation for eviction due to unpaid rent.
Another ruling against Adagio in post-Covid litigation
In a judgment dated 26 May 2026, the Nanterre Commercial Court dismissed the claim for compensation for eviction brought by Adagio following the refusal to renew several commercial leases for apartments located in a holiday residence operated by the company. This ruling illustrates the courts’ increasingly strict stance towards operators who suspended or delayed rent payments during the health crisis.
The dispute concerned several units located in a residence operated by Adagio and previously let to Icade Résidences Services, whose rights are now held by Adagio. The commercial leases had been entered into in 2009 for a term of nine years.
Following significant payment delays from 2020 onwards, several landlords served notices of termination with refusal of renewal without offering compensation for eviction, considering that the tenant’s breaches constituted serious and legitimate grounds within the meaning of Article L.145-17 of the Commercial Code.
Terminations motivated by unpaid rent arising during the health crisis
The landlords accused Adagio of having ceased to pay rent regularly from the first quarter of 2020 onwards.
According to them, the delays had persisted over several financial years despite reminders and formal notices sent to the operator. They argued that these arrears had continued even though no legal provision had suspended the obligation to pay commercial rent during the pandemic.
A formal notice by extrajudicial document was served on 7 July 2021. This notice reproduced the provisions of Article L.145-17 of the Commercial Code and invited Adagio to rectify its situation within the statutory period of one month. As the rent had not been paid in full within this period, the landlords subsequently served notices of termination with refusal of renewal, without compensation for eviction, taking effect on 31 March 2022.
Adagio cited the health crisis and the lack of seriousness of the breaches
In challenging the notices of termination, Adagio argued primarily that the landlords had not demonstrated any serious and legitimate grounds justifying the denial of eviction compensation.
The operator argued that the payment difficulties stemmed from the exceptional consequences of the Covid-19 pandemic, as administrative closures and travel restrictions had severely affected the operations of holiday residences.
The company also cited the initiation of conciliation proceedings aimed at reorganising its relations with the landlords and seeking negotiated solutions. In its view, this approach demonstrated its good faith and ruled out any wrongful conduct.
Adagio finally emphasised that the arrears had subsequently been settled. It considered that the payment delays were therefore not sufficiently serious to justify a refusal to renew the lease without compensation.
Consequently, it sought recognition of its right to eviction compensation and to remain in the premises until such compensation was paid, on the basis of Article L.145-28 of the Commercial Code.
The court upheld the validity of the procedure initiated by the landlord
The court began by examining the formal requirements set out in Article L.145-17 of the Commercial Code.
The judges noted that the prior formal notice had indeed been served by extrajudicial document, that it specified the alleged breaches and set out the applicable legal provisions. They also noted that it had remained without effect for more than a month.
The court then observed that the notices of termination had been served in accordance with the statutory six-month period, that they clearly set out the grounds invoked and reminded the tenant of the two-year period available to them to contest them or claim compensation for eviction.
The judges thus concluded that the procedure initiated by the landlord was entirely in order.
Non-payment constitutes a serious and legitimate ground for refusing renewal
On the merits of the case, the court took a particularly firm stance.
It noted that repeated failure to pay rent constitutes a breach of a fundamental obligation under the commercial lease. The judges considered it established that Adagio had repeatedly and persistently failed to meet its payment obligations during the 2020 and 2021 financial years.
The court expressly rejects arguments based on the health crisis. It points out that the exceptional measures adopted during the pandemic never suspended the payment of commercial rent nor authorised its unilateral waiver.
The judges also emphasise that the initiation of conciliation proceedings had no suspensive effect on the performance of the contractual obligations arising from the lease. Adagio therefore remained obliged to pay the rent on the scheduled due dates.
Finally, the court reiterates a fundamental principle: the seriousness of the breaches must be assessed as at the date the notice of termination was served. Consequently, the subsequent settlement of arrears has no bearing on the legitimacy of the refusal to renew.
The complete rejection of the claim for eviction compensation
Considering that the payment defaults were repeated, persistent and significant, the court ruled that the landlords had established the existence of a serious and legitimate ground within the meaning of Article L.145-17 of the Commercial Code.
Consequently, Adagio is deprived of any right to eviction compensation. Nor can it rely on the right to remain in the premises provided for in Article L.145-28 of the Commercial Code.
The court therefore dismissed all of its claims against the owner concerned and ordered it to pay the costs as well as €1,500 on the basis of Article 700 of the Code of Civil Procedure.
Scope of the decision
This judgment is part of a now well-established trend in case law concerning operators of holiday accommodation. Several courts consider that rent deductions made during the health crisis may constitute a serious and legitimate ground for refusing renewal where arrears have persisted despite formal notices from the landlord. For landlords, this decision confirms that an operator who has persistently failed to meet their essential payment obligation may be denied any eviction compensation, even if the arrears were settled several years later.
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