Vacanceole Provence French Leaseback

Vacanceole Provence operated a ‘Clos Dia’ tourist residence in Tourrettes

The lessors entered into commercial leases with Vacanceole Provence for the operation of a tourist residence.

Vacanceole Provence: Collective action of 70 owners in French leaseback

A group of 70 lessors seized the property and gave the operator notice to recover their property.

Interim injunction issued by the Draguignan Magistrates’ Court on 9 October 2024

The interim order issued by the Draguignan judicial court on 9 October 2024 in the referenced case concerns a dispute over a commercial lease.

The plaintiffs, various owners of lots located in the ‘Clos Dia’ residence in Tourrettes, entered into commercial leases with the Vacancéole Provence company for the operation of a tourist residence. The agreed rent was 300,000 euros per annum, plus a 40% share of operating profits. The lessors criticised the lessee company for failing to pay certain rents, because the rents were not indexed.

Unpaid rents linked to the failure of Vacanceole Provence to index rents annually

As a result of unpaid rent linked to the failure of the operator of the tourist residence to index the rent each year and the refusal to renew several leases, the owners applied to the interim relief judge to declare the acquisition of the resolutory clause in the lease contracts and order the eviction of the tenant company. They also requested that the company be ordered to pay unpaid rent for the lack of annual indexation.

In its defence, SASU Vacancéole Provence contested the service of the summons to pay and the notice to quit. It raised objections of nullity due to the failure to provide supporting documents. In the alternative, it asked for time to pay and made counterclaims, in particular claiming compensation for eviction.

Dismissal of the application to set aside the notices of termination

The court examined the procedural objections raised by the tenant company. It pointed out that the interim relief judge cannot declare bailiff’s documents null and void, but can only verify whether there are serious disputes. In this case, the summons to pay and the notice to vacate were in fact mentioned in the list of documents, and the tenant company had not demonstrated any grievance caused by this alleged irregularity.

With regard to the substantive claims, the court analysed the provisions of Articles L.145-14 and L.145-28 of the French Commercial Code, which set out the rights of tenants in the event of a refusal to renew a lease and in the event of eviction compensation. The court considered that, on the basis of the evidence presented, an expert appraisal was required to assess the eviction compensation potentially due. Theexpert opinion was therefore ordered, at the advanced expense of the lessors, as is customary.

Application for termination without eviction compensation based on resolutory clauses in the leases

With regard to the termination clauses in the leases, the court referred to the provisions of article L.145-41 of the French Commercial Code. It noted that the payment orders issued were valid, but that the sums claimed did not, in its view, justify a sufficiently precise breakdown. However, a table showing updates by year was appended to the summons to pay issued by the bailiff. It is likely that the interim judge did not intend to take responsibility for terminating certain commercial leases for failure to index the rent annually.

As a result, the claim remained disputable according to the interim relief judge, and the court rejected the applications to acquire the termination clauses (resolutory clauses) and the requested evictions. In addition, the applications for an advance on index-linked rents were also rejected on the grounds that they were seriously disputed.

Vacanceole Provence Counterclaims

Finally, the court rejected Vacanceole Provence’s counterclaims for lack of sufficient evidence. It also ruled that there were no grounds for interim relief in respect of the landlords’ claims.

In conclusion, the court ordered a legal expert to assess the eviction compensation, but rejected the parties’ other claims.

Waiver of the eviction damages in the lease written by the lessee

Vacanceole Provence has chosen to refuse to enforce the waiver of the eviction compensation in the lease written by the former lessee. The owners have agreed to renew the last lease only because this waiver was included in the new lease. Such a bad faith is based on a change of case law of the French high court (Cour de cassation), especially if the waiver is in the lease and not in another document following the lease.

The british press was right to critize the bad faith of the operator (tenant/lessee) of the French leaseback property.

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