Commercial Leases/Business Goodwill

The lessee is required to make the payment of the rent and charges into the hands of the lessor or the person authorized to receive them on their behalf , with the trial court judges having to ensure this . Thus, the latter cannot consider the payment made into the hands of the notary in charge of the estate as discharging the obligation, without investigating whether the notary was authorized to  …

Payment incidents

The lessee is required to make the payment of the rent and charges into the hands of the lessor or the person authorized to receive them on their behalf , with the trial court judges having to ensure this . Thus, the latter cannot consider the payment made into the hands of the notary in charge of the estate as discharging the obligation, without investigating whether the notary was authorized to receive the rents on behalf of the co-lessors .

In the event of a payment incident, the landlord has the option to take action against the tenant either to claim payment of overdue rent , accompanied, if applicable, by the penalties stipulated in the contract, or to request the judicial termination of the lease at the tenant's fault, or to seek the enforcement of the termination clause . The landlord may also refuse the renewal of the lease without eviction compensation when a serious and legitimate reason is established due to unpaid rent and charges . Furthermore, the lease may provide for a penalty clause that requires the tenant, in the event of a breach of contractual obligations, such as rent payment, to pay a certain sum as damages. In this regard, Article 1231-5, para. 1, of the Civil Code specifies that the defaulting party cannot be awarded a sum greater or lesser than that provided for in the clause. While the trial court may limit the amount of the penalty clause (Art. 1231-5, para. 2, Civil Code), they must establish the manifest disproportion between the actual damage suffered by the landlord and the amount of the penalty conventionally set . The penalty clause must be drafted clearly and precisely, and be free of any ambiguity. Thus, when such a clause stipulates that “in the event the landlord initiates proceedings or takes protective measures against the tenant, they shall be entitled to a fixed indemnity of 10% of the amounts for which the procedures are initiated,” it follows that in the absence of proceedings, the contractual penalty does not apply .

Article 1231-6 of the Civil Code, stemming from Ordinance No 2016-131 , and applicable to rents due after 1 October 2016, specifies that in the event of a delay in the payment of a monetary obligation, the damages owed consist “of interest at the legal rate, from the date of formal notice,” without the landlord being required to justify any loss. If, in the event of late payment of rents, interest is only due from the date of the order to pay , the withdrawal of the proceedings, initiated by the landlord based on the order, has no effect on its validity and does not constitute a waiver of its effects regarding the starting point of the interest it accrues . Furthermore, provided that there is no mention of any default in the monthly payment, a slight delay in the payment of rent does not constitute a sufficiently serious breach by the tenant to justify the termination of the lease . However, regardless of the damage related to the delay in rent payments, landlords suffer a loss, for which the tenant must be ordered to pay damages, due to the hassles resulting from the need to monitor each month the payments or non-payments of rents, and to deal with irregular income .

In terms of works, if a lessee is not exempt from paying rent until the execution thereof , it may be agreed between the parties that the rent will be subject to temporary reductions due to the works the lessee will be required to carry out in the leased premises, it being specified that if the works are not executed, the reductions granted are without cause and must be reimbursed by the lessee . However, the Court of Cassation considers that when the obligation to carry out works is imposed on the lessor and results in a penalty, this penalty claim is connected to the rent claim, and the two claims can then be offset .

The lessee may invoke the defense of non-performance which, initially of jurisprudential origin , was enshrined in Articles 1219 and 1220 of the Civil Code, stemming from Ordinance No 2016-131 . According to the first of these texts, “a party may refuse to perform its obligation, even though it is due, if the other party does not perform its own and if this non-performance is sufficiently serious.” Article 1220 provides for the suspension of performance by a party of its obligation when it is clear that “its contracting party will not perform at the due date and the consequences of this non-performance are sufficiently serious for it,” this suspension must be notified as soon as possible. If the trial courts can order the suspension of rents, it is on the condition that the lessee is in absolute impossibility to operate its business in the leased premises , the extent of which they assess sovereignly with regard to the purpose of the lease  and the proof of which lies with the lessee . This is the case when the lessor fails to fulfill its obligations of delivery or maintenance , by providing the lessee with premises that do not allow it to carry out its professional activity , by refusing to comply with the administrative authority's prescribed compliance of the premises , or by carrying out work that rendered the premises unsuitable for their intended use during their execution .

A lessee is entitled to invoke the exception of non-performance, due to the impossibility of using the leased premises in accordance with the intended purpose specified in the lease, when as a result of an explosion, the bakery has been destroyed , when the leased premises are neither operated nor operable in the absence of repairs to the damage following a fire that did not completely destroy the premises , when the lessor does not carry out the work required by the condition of each of the leased premises , when the enclosure and cover are no longer ensured , or when, during the period in which he did not occupy the premises, even if he chose to evacuate them during the asbestos removal work on the roof of the leased building initiated by the lessor without being compelled by an administrative decision, the labor inspector indicated, in a letter addressed to the lessee, that the risk of asbestos propagation was not eliminated for the employees .

On the other hand, a lessee is not entitled to invoke the defense of non-performance when a total impossibility to use the leased premises according to their contractual purpose is not established , even if the lessor has failed to fulfill its contractual obligations due to defects or the non-performance of necessary repair work , when, despite difficulties related to flooding, it has been possible to operate the entire property according to the purpose of the leases  or when the activity could continue in the leased premises despite rainwater infiltrations through the roof that disturb the peaceful enjoyment of the premises and whose repairs are the responsibility of the lessor . The same applies to the lessee who does not demonstrate that security disturbances prevented them from peacefully enjoying the leased premises and impacted the results of their commercial activity .

Finally, Article 1343-5 of the Civil Code, stemming from Ordinance No 2016-131 of 10 February 2016 , grants the judge the ability, considering the tenant's situation and the landlord's needs, to grant payment extensions by deferring or staggering, within a limit of two years, the payment of amounts due.

Cass. 3e civ., 5 March 1997, LawLex202200011559JBJ, concerning a residential lease.

Cass. 3e civ., 2 March 1977, LawLex202200007011JBJ: in this case, the lessee had paid the due rents into the hands of a notary.

Cass. 3e civ., 9 December 2008, LawLex202200011563JBJ.

CA Toulouse, 26 March 2002, No 2001/01096.

CA Orléans, 24 September 2020, LawLex202200010648JBJ.

Cass. 3e civ., 12 May 2015, LawLex202100004537JBJ: in this case, the rented premises were located in a building that had been subject to a danger order.

Cass. com., 27 September 2016, LawLex202100002745JBJ, according to which the penalty payment claim arose from the commercial lease, just like the rent claim.

Cass. 3e civ., 15 December 1993, LawLex202100005917JBJ; 8 April 1998, LawLex202100004522JBJ; 11 January 2006, LawLex201000000126JBJ, regarding management leases.

Ord. No 2016-131 of 10 February 2016 on the reform of contract law, the general regime, and the proof of obligations, Art. 2.

CA Lyon, 22 May 2018, LawLex202200011569JBJ; CA Metz, 16 December 2021, LawLex202200010822JBJ.

Cass. 3e civ., 17 November 2016, LawLex202200010878JBJ, which quashes the appeal decision rejecting the tenant's request for suspension of rents, without investigating whether the landlord's failure to carry out the work intended to stop the infiltrations resulted in the tenant's inability to continue their activity. – Also see Cass. 3e civ., 27 February 2020, LawLex202200010892JBJ.

Cass. 3e civ., 29 September 2010, LawLex202200011558JBJ.

CA Paris, 13 September 2019, LawLex202200010821JBJ.

CA Lyon, 22 May 2018, LawLex202200011569JBJ, préc.

CA Paris, 13 September 2019, LawLex202200010821JBJ, préc.

Cass. 3e civ., 11 January 2006, LawLex201000000126JBJ, op. cit.

Cass. 3e civ., 27 February 2020, LawLex202200010892JBJ, cited.

Cass. 3e civ., 21 November 1990, LawLex202100004521JBJ: in this case, neither the retail store nor the apartment had been destroyed.

Cass. 2e civ., 9 April 2009, LawLex202200010864JBJ: in this case, the landlord had, by his actions, prevented the resumption of activity under normal operating conditions.

CA Douai, 27 January 2022, LawLex202200010816JBJ.

CA Saint-Denis, 27 September 2017, LawLex202200011567JBJ.

Cass. 3e civ., 19 November 2015, LawLex202100004538JBJ.

Cass. 3e civ., 19 February 1997, LawLex202200009889JBJ, which specifies that in the case of a sublease, the owner of the leased premises has a direct action against the subtenant within the limit of the “sub-rent.”

CA Paris, 13 September 2019, LawLex202200010821JBJ, prec.: in this case, the inventory reports revealed significant deterioration of the paint on certain walls and, in part of the premises only, of the ceiling paint, as well as stains on the carpet.

CA Toulouse, 7 December 2017, LawLex202200011564JBJ.

Cass. 3e civ., 8 April 1998, LawLex202100004522JBJ, prec.: in this case, the lessee did not deny operating a hotel residence and was never able to specifically identify any particular unit of the residence that could not have been rented since his arrival.

Cass. 3e civ., 23 May 2013, LawLex202200010885JBJ.

CA Dijon, 30 August 2018, LawLex202200010815JBJ.

Ordinance No 2016-131 of 10 February 2016 on the reform of contract law, the general regime, and proof of obligations, Art. 3.

Cass. 3e civ., 5 November 2015, LawLex202200010443JBJ, which specifies that the termination clause must be implemented in good faith.

Cass. 3e civ., 16 October 2007, LawLex202200008271JBJ: in this case, the rents and charges due had not been paid within the time specified by the previously notified demands.

Cass. 3e civ., 26 May 2016, LawLex202200011561JBJ.

Cass. 3e civ., 12 July 2018, LawLex202200011560JBJ.

Order No 2016-131 of 10 February 2016 on the reform of contract law, the general regime, and proof of obligations, Art. 2.

Cass. 2e civ., 14 February 2002, LawLex202200011562JBJ.

Commercial Leases/Business Goodwill

113. Payment incidents

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

113. Payment incidents

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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