2 years after the notice by a bailiff

The 2 years rule comes from the law

Article L. 145-60 of the French Commercial Code

The tenant’s position becomes much more uncertain when he fails to file a claim for eviction compensation within two years of the effective date of the notice to vacate with refusal to renew. In such a case, his action is foreclosed under the provisions of article L. 145-60 of the French Commercial Code, resulting in the loss of his right to eviction compensation (Cass. 3e civ., March 10 2004, no. 02-16.548: Bull. civ. 2004, III, no. 51, p. 47; Loyers et copr. 2004, comm. 111, obs. Ph.-H. Brault). As a result, he becomes an occupant without right or title, and can no longer claim to remain in the premises.

The statute of limitations on the right to claim compensation for eviction is a key issue in commercial leases, because of its significant impact on the rights of the evicted tenant. Under French law, an eviction indemnity is payable to the tenant if the lessor refuses to renew his commercial lease, unless the latter can justify a legitimate reason for refusal, as set out in article L. 145-14 of the French Commercial Code.

This indemnity is intended to compensate the lessee for the loss of his business and the investments made in the leased premises.

A two-year deadline

However, the exercise of this right is not unlimited in time. The legislator has set a two-year limitation period for the action to set the eviction indemnity, as set out in article L. 145-60 of the French Commercial Code. This period begins to run from the effective date of the notice to vacate with refusal to renew notified by the lessor. Thus, if the tenant does not bring the matter before the competent judge within two years, his action will be time-barred, i.e. he will no longer be able to validly claim this indemnity.

The consequence of prescription is particularly severe for the tenant. Indeed, the loss of his right to eviction compensation means that he can no longer obtain financial compensation for the loss suffered, and that he becomes de facto an occupant without right or title. This situation is legally fragile, as it deprives him of any possibility of remaining in the rented premises. From the date of prescription, the tenant is in a situation of irregular occupation and can be evicted at any time, without being able to invoke any right to remain in the premises.

It should be emphasized that prescription is a defense that the landlord can raise to extinguish the tenant’s action. The judge cannot raise it ex officio, which means that the lessor must invoke prescription in order to take advantage of it. If the tenant has not brought his action in good time, the landlord can ask the judge to declare that the claim is time-barred, and consequently that the claim for eviction compensation is inadmissible.

The starting point of the two-year period

In practice, this statute of limitations on the action to fix the eviction indemnity calls for great vigilance on the part of tenants. It is essential that they take the necessary steps to lodge their claim within the time limit, or risk losing a right that could represent a substantial sum. The statute of limitations can, moreover, be complex to calculate in certain situations, notably when the effective date of the notice is uncertain or disputed by the parties.

It is also important to note that the starting point of the limitation period can be influenced by various factors, such as the regular notification of the notice or the existence of negotiations between the parties after the notice has been given. In some cases, the tenant may be tempted to argue that ongoing talks have suspended the limitation period, but such an argument must be well-founded to be admissible in court.

Finally, although the two-year limitation period is the general rule, there are exceptional situations in which this period could be extended, notably in cases of force majeure or if the lessor has expressly recognized the principle of compensation in discussions subsequent to the delivery of the notice. However, such exceptions are rare and must be interpreted restrictively by the courts.

In conclusion, it is crucial for tenants to comply with the limitation period for the action to fix the eviction indemnity.

Any negligence or delay in bringing this action can have irreversible consequences, including the loss of the right to eviction compensation, leaving the tenant with no legal protection and no financial recourse to compensate for the loss of his goodwill.

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