Commercial Leases/Business Goodwill

Under Articles L. 622-14, para. 3, L. 631-13, para. 1, and L. 641-12, para. 4, of the Commercial Code, the termination of the lease of buildings leased to the debtor and assigned to the business activity is recorded or pronounced when the lessor requests the termination or has the termination of the lease recorded for non-payment of rent and charges related to an occupation subsequent to the commencement judgment, even if this corresponds only partially to a period of enjoyment after this judgment  and if the non-payment of rent due before the commencement of the proceedings relates to an occupation subsequent to it .

The limitation imposed by Articles L. 622-14, L. 631-13, and L. 641-12 of the Commercial Code only concerns the landlord's actions aimed at the payment of rent and charges. It does not apply to the action for termination resulting from the non-performance of an obligation to do, such as the obligation not to disturb other tenants with noise nuisances , which is also not covered by Article L. 622-21 of the Commercial Code. Thus, whether this non-performance occurs before or after the commencement of insolvency proceedings, the landlord can have the termination of the commercial lease recognized, even if the action for termination was initiated before the judgment opening the insolvency proceedings .

The imprecision in the drafting of Article L. 641-12, 2° of the Commercial Code, which states that the termination of the lease occurs "when the landlord requests judicial termination or has the termination of the lease automatically recognized for causes prior to the judgment of judicial liquidation," without specifying the nature of the "prior causes," has raised doubts that the Court of Cassation has dispelled by holding that the prior causes refer to obligations other than the payment of a sum of money .

The lessor, who wishes to have the termination as of right acknowledged in the cases provided for in Articles L. 622-14, 2° or L. 641-12, 1° of the Commercial Code, must submit their request to the supervising judge (Article R. 622-13, para. 2, Commercial Code), and not to the Judicial Court of the location of the property, which is competent to acknowledge the termination as of right of the lease pursuant to Article L. 145-41 of the same code. Indeed, the termination as of right of the commercial lease based on Articles L. 622-14 and L. 641-12 is distinct from that of Article L. 145-41, which aims to acknowledge the acquisition of the termination clause stipulated in the lease contract and follows its own specific conditions. Thus, the lessor who acts before the supervising judge to request the acknowledgment of the termination of the lease for non-payment of rent and charges related to an occupation subsequent to the liquidation judgment, without claiming the benefit of the termination clause, is not, in this respect, obliged to issue a payment order , whereas in the case of a termination clause, the prior issuance of such an order is mandatory, since Article L. 622-14 does not derogate from the provisions of Article L. 145-41 .

Articles L. 622-14, para. 3, and L. 641-12, paras. 4 and 5, set a three-month foreclosure period for the landlord to request judicial termination or to have the lease automatically terminated. In the event of judicial liquidation, Article L. 641-12 provides that within three months from the publication of the judicial liquidation judgment, the landlord must file a request for judicial termination or have the lease automatically terminated for causes prior to the judicial liquidation judgment , other than the payment of a sum of money . When liquidation is preceded by a safeguard or judicial reorganization procedure, the starting point of this period is set at the date of the safeguard or judicial reorganization opening judgment . The Court of Cassation considers that when judicial liquidation is opened upon the resolution of the plan, it is not a conversion of the ongoing reorganization procedure, but a new collective procedure, so the starting point of the three-month period is the date of the judgment pronouncing the resolution of the plan and opening the judicial liquidation . Similarly, under Article L. 622-14, the landlord must wait for the expiration of a three-month period following the opening judgment of the tenant's collective procedure to request termination or have the lease terminated for non-payment of rent and charges related to an occupation after the opening judgment .

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Cass. com., 18 January 2023, LawLex202300001172JBJ.

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CA Bordeaux, 20 September 2022, LawLex202200008276JBJ.

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Cass. com., 19 February 2013, LawLex202100003351JBJ.

266. Implementation conditions