Notice of a French leaseback despite a development agreement

Notice with refusal to renew remains possible despite a tourism development agreement

In a judgement dated 5 June 2026, the Albertville District Court provided a significant ruling on a recurring issue in holiday residences: does the existence of a tourism development agreement requiring the use of accommodation for tourism purposes prevent the landlord from giving notice of termination with a refusal to renew the tenancy? The court answered in the negative and upheld the notice of termination served on the operator, Soderev Tour.

Notice to end a lease in Les Arcs

In December 2009, a landlord let an apartment and a parking space located in a holiday residence in Les Arcs to the company Soderev Tour under a commercial lease. The lease was entered into for a term of nine years from the date the residence opened for business.

In 2013, the parties signed an amendment providing, amongst other things, for a reduction in rent agreed by the landlord in return for a cap on the eviction compensation at six months’ worth of the last rent.

By an out-of-court document dated 21 June 2022, the landlord served a notice of termination with a refusal to renew the lease, effective 31 December 2022, whilst offering to pay eviction compensation.

Soderev Tour then challenged the validity of this notice before the Albertville District Court.

The operator’s strategy: invoking the tourism development agreement

Soderev Tour’s main argument rested on the existence of a tourism development agreement concluded in 2007 between the developer of the residential complex and the municipality of Bourg-Saint-Maurice. This agreement stipulated that the flats must be used on a long-term basis as a tourist residence for a period of eighteen years.

According to the operator, this agreement, incorporated into the co-ownership regulations, was a matter of public policy and prevented any notice of termination before the expiry of the tourist use period, i.e. until October 2029.

The company therefore argued that the notice of termination served in 2022 should be set aside or, at the very least, declared ineffective until the end of the tourist agreement.

The validity of the notice of termination confirmed by the court

The court first rejected the argument based on the contractual notice period.

The lease stipulated that, in the event of a refusal to renew upon its expiry, the lessor was required to give the lessee twelve months’ notice. However, the judges considered that this provision applied only to the initial lease and not to the period of tacit renewal.

As the lease had expired on 31 March 2019 and had continued by tacit agreement, the statutory provisions of Article L.145-9 of the Commercial Code were fully applicable. The lessor could therefore give notice at any time, subject to compliance with the statutory six-month notice period.

The notice of termination dated 21 June 2022, taking effect on 31 December 2022, is thus deemed to be entirely valid.

The tourism development agreement does not preclude a refusal to renew

The main significance of the decision lies in its analysis of the effects of the tourism development agreement.

The court acknowledges that the owner remains obliged to ensure that their flat is used for tourism purposes for the duration specified in the agreement. However, this obligation does not mean that they are required to retain the same operator for the entire period.

The judges point out that the commercial lease signed between the parties expressly provided for the possibility for either party to refuse renewal upon its expiry. They also emphasise that the law governing commercial leases is a matter of public policy and that no provision of the Tourism Code excludes its application to tourist residences.

According to the court, each commercial lease remains independent, even where all the flats form part of a single tourist residence. Each owner therefore retains the individual right to give notice to the operator.

This analysis dismisses the argument often put forward by certain managers that a tourism agreement would stand in the way of the landlord’s right to repossess the property.

The financial consequences of refusing renewal

The court found that the notice of termination took effect on 31 December 2022 and that the lease was terminated on that date.

Regarding the eviction compensation, the parties agreed to apply the clause negotiated in 2013 limiting this compensation to six months’ worth of the last rent. The compensation is therefore set at 2,956.80 euros.

The landlord also sought the immediate eviction of Soderev Tour. This request is rejected pursuant to Article L.145-28 of the Commercial Code. As long as the eviction compensation has not actually been paid, the tenant retains the right to remain on the premises.

Finally, the court sets the occupation compensation payable by the operator at 85 per cent of the monthly rent including VAT. It applies a 15 per cent ‘precariousness’ reduction, considering that the business continues to operate in a legally uncertain situation due to the pending payment of the eviction compensation.

Practical implications of the decision

This decision is of particular interest to lessors of French leaseback. It confirms that a tourism development agreement or an obligation to use the property as a tourist accommodation does not, in itself, preclude the issue of a notice of termination with a refusal to renew. The landlord remains free to change the operator or enter into a new lease, subject to compliance with the rules governing commercial leases and the payment of the eviction compensation due to the outgoing operator.