Frenchleaseback and end of the lease
Eviction compensation clauses for tourist residences: on November 16, 2023, the French Supreme Court handed down 3 rulings on these clauses.
Waiver of eviction compensation prior to 2014
It follows from Article 2 of the Civil Code that new law governs the legal effects of legal situations that came into being before its entry into force and have not been definitively realized. Here, the 2014 Pinel law applies to commercial leases signed before this law.
Law no. 2014-626 of June 18, 2014, known as the Pinel Law, substituted, for the nullity of clauses having the effect of defeating the right to renewal, their deemed unwritten nature. Clauses waiving eviction compensation or setting a lump sum for eviction compensation are covered by this rule according to this ruling.
The tenant-operator’s action to have a lease clause deemed unwritten is not subject to the statute of limitations (Cass., 3rd Civ., November 19 2020, pourvoi n° 19-20.405, published).
The judges conclude that the sanction of deemed unwritten (cancellation) is applicable to leases in force at the time of the 2014 Pinel law, even if the statute of limitations on the action for nullity of waiver or eviction indemnity setting clauses had previously expired.
Cour de cassation, 3rd civil chamber, November 16, 2023 – n° 22-14.046
Eviction compensation waiver clause after 2014
An application to have a clause whose effect is to defeat the right to renewal, introduced after the entry into force of the law of June 18, 2014 and relating to a lease in progress on that date, deemed unwritten is admissible even though the limitation period for the action for nullity of the same clause would have been acquired on the day the new law came into force.
This second ruling by the Cour de cassation on November 16, 2023 confirms the application of the Pinel law sanction even though the two-year prescription would have been acquired on the day the 2014 Pinel law came into force.
Court of Cassation, 3rd Civil Chamber, November 16, 2023 – n° 22-14.091
A tenant who acts by way of action cannot invoke the exception of nullity.
As the commercial lease stipulated a clause waiving the tenant‘s right to renew the lease, and the notice of termination issued by the lessors without an offer of renewal or eviction compensation had terminated the lease on December 31, 2013, the court of appeal correctly held that the legal situation had ended on that date, i.e. before the law of June 18, 2014 came into force, and that this law was not applicable.
The rule that the exception of nullity is perpetual can only be invoked as a defense to a request for enforcement of an irregularly executed act and not by the plaintiff acting by way of action.
The tenant sued the landlords for nullity of the notice to vacate and of the clause waiving payment of an eviction indemnity.
The Court of Appeal correctly deduced that the tenant had acted by way of action, so that she could not rely on the exception of nullity.
Consequently, the waiver of eviction indemnity clause drafted by the operator of the tourist residence at the time of renewal of the commercial lease applies in this case.
Court of Cassation, 3rd Civil Chamber, November 16, 2023 – n° 22-14.089
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