Commercial Leases/Business Goodwill

The joint guarantee is strictly construed. Thus, when under the terms of the commercial lease, the assignor is only guarantor for the payment of rent by the assignee, the guarantee cannot be extended to cover rental repairs and occupancy indemnities . Therefore, the assignor cannot be held liable for the payment of arrears of occupancy indemnity and the ongoing occupancy indemnity if they have not contracted the obligation to guarantee the payment of occupancy indemnities owed by the assignee of the business after the termination of the lease . Indeed, the occupancy indemnity, which is only owed due to the quasi-tortious fault committed by the person who unduly remains on the premises, is not related to the lease contract, which ended with its termination .

Article L. 145-16-1 of the Commercial Code requires the landlord, in the event of a joint and several guarantee clause, to inform the assignor of any payment default by the lessee “within one month from the date on which the amount should have been paid by the latter.” The text does not specify the form or content of this information, nor the penalty for non-compliance by the landlord. However, it is a consistent jurisprudence that the penalty should be, for the landlord, the loss of their right to payment, in whole or in part, if they fail to notify the guarantor of the assignee's default . It is also up to the trial court to assess, within the framework of their duty to inform, the landlord's diligence, who must not be negligent in recovering their claim and must act within reasonable timeframes, as well as the consequences that may be drawn from the alleged breach by assessing, on a case-by-case basis, the damage, aggravating circumstances, or loss of opportunity attributable to the lack of prior information .

The landlord's lack of diligence in recovering rent from the assignee may also incur liability. Indeed, in principle, a creditor who acts to recover their claim within the limitation period does not commit a fault, except in cases of abuse in exercising this right . This is the case when the landlord demands from the assignor the payment of all rents due for more than two years . Similarly, when the assignee has never paid their rent, the landlord's behavior, who neither sent a letter nor a registered letter before a late summons that had no effect, did not pursue the procedure, and did not inform the assignor, while not making any serious attempt in three years to recover the rent from the acquirer of the leasehold right and without keeping the assignor informed of this alarming situation, constitutes a fault, as the assignor should not bear the landlord's negligent failure . It is also the case when the landlord, who allows the rent debt to increase for more than a year without acting against either the assignee or the co-debtor assignor, deprives the latter of the benefit of subrogation . Conversely, the landlord cannot be accused of negligence in rent recovery when none of the lease clauses required them to inform the assignor of the rental situation's evolution after the assignment, nor of the assignee's compliance with their obligations, nor of the fact that the rents having been partially paid, the arrears justified a payment order being served . Finally, when, by virtue of the guarantee clause, the assignor is summoned before the summary judge, they are entitled to argue that the landlord's claim faces a serious challenge if they have been negligent in effectively pursuing rent recovery from the assignee .

Cass. 3e civ., 12 April 1995, LawLex202200008141JBJ; 4 March 1998, LawLex202200008159JBJ: when a joint guarantee clause extends to all successive assignees and subtenants, whether or not occupying the premises, for the payment of rent and the performance of the lease conditions, the assignor is not liable for the payment of occupancy indemnities for the period after the expiration of the lease nor for the rental repairs resulting from the inventory of fixtures drawn up after the end of the lease.

Cass. 3e civ., 28 October 2009, LawLex202200008153JBJ.

Cass. 3e civ., 5 March 2013, LawLex202200009068JBJ.

Cass. 3e civ., 6 March 1996, LawLex202200009060JBJ, which quashes the decision that holds, to condemn the assignor to the payment of the occupancy indemnity, that since the assignor acted as guarantor for both the payment of rents and charges and the performance of the lease conditions, including the obligation to return the premises, he is jointly liable with the assignee for the amount of occupancy indemnities owed to the lessor. – Also see CA Paris, 13 June 2001, No 1999-18651.

CA Aix-en-Provence, 10 June 2021, LawLex202100006204JBJ; CA Amiens, 27 June 2024, LawLex202400005056JBJ.

CA Amiens, 27 June 2024, LawLex202400005056JBJ.

Cass. com., 2 November 2016, LawLex202300014346JBJ.

Cass. com., 5 December 1995, LawLex202200009066JBJ, which specifies that by refraining, for more than two years, from initiating the termination of the lease despite the non-payment of rent due for more than three months after the opening judgment, and by claiming the totality of the rent due during this period from the assignor, who did not have the legal possibility to terminate the contract, the lessor did not perform in good faith the agreements binding him to the assignor insofar as he sought to impose on the latter the consequence of his own failure.

Cass. 3e civ., 24 June 1998, LawLex202300014393JBJ.

Cass. 3e civ., 12 June 2001, LawLex202300014394JBJ: in this case, since the assignment of the lease in July 1992, the assignee had only made two installment payments, leaving the rents and charges completely unpaid from the fourth quarter of 1992 to 30 August 1993, the date of the issuance of the order to pay invoking the termination clause, one week before the commencement of a judicial reorganization procedure against him.

Cass. 3e civ., 28 October 2003, LawLex202200009065JBJ.

319. Conditions