Bankruptcy Law

Without harm to the application of I and II of Article L. 641-11-1, the lease of buildings used for the debtor's business is terminated in the event of a decision by the receiver or liquidator not to continue the contract, or in the event of a request for termination or declaration by the lessor, pursuant to Article L. 641-12 of the Commercial Code. The provisions applicable to the ongoing lease c …

Termination of lease contract

Without harm to the application of I and II of Article L. 641-11-1, the lease of buildings used for the debtor's business is terminated in the event of a decision by the receiver or liquidator not to continue the contract, or in the event of a request for termination or declaration by the lessor, pursuant to Article L. 641-12 of the Commercial Code. The provisions applicable to the ongoing lease contract must be combined with those of the Commercial Code relating to commercial leases. In fact, the lease may also be terminated by the enforcement of a resolutory clause.

Article L. 641-12, 1° provides that the commercial lease contract is terminated on the day the lessor is informed of the legal representative's decision not to continue the lease. The commercial lease is terminated on the date on which the lessor receives the letter in which the receiver announces his decision to abandon the contract, whatever the scope of the mission entrusted to him . In the absence of any dispute as to the receipt and scope of the receiver's letter terminating the lease, the interim judge, seized after the close of the insolvency procedure, has jurisdiction to declare the termination on the date of receipt by the lessor, even if the bankruptcy judge, whose mission ended with the procedure, has not previously been seized for the same purpose . The date of receipt of the letter automatically marks the date of termination of the lease, even if the receiver has indicated that this will take effect at a later date . Lastly, the fact that the receiver has the necessary funds to pay the rent cannot prevent him from opting not to continue the lease .

2) Application for termination or declaration by the lessor

Pursuant to Article L. 641-12, 3° of the Commercial Code, a commercial lease may be terminated upon application by the lessor, based on the lessee's failure to pay rent and charges relating to an occupation subsequent to the court-supervised liquidation.

Article L. 641-12, 3° requires the lessor to act under the conditions set out in the third to fifth paragraphs of Article L. 622-14. Accordingly, the lessor may only take action to terminate the lease or to establish that it has been terminated after a period of three months has elapsed from the date of publication of the court-supervised liquidation order . If the receivership is subsequently converted, the action period runs from the date of the judgment opening the first receivership . However, the Court of Cassation has specified that when a court-supervised liquidation is opened following the resolution of a continuation plan, this is not a conversion of the current receivership procedure, but a new insolvency procedure, so that, in this case, the starting point for the three-month period before being able to bring an action for termination of the lease is the date of the judgment pronouncing the resolution of the plan and opening the court-supervised liquidation . Termination of a lease contract ipso jure occurs when, on the date on which the lessor files his petition, the lessee has not paid the rent due since the opening of the receivership, although more than three months have elapsed since the opening of the receivership . The three-month period is not a limitation period, but the starting point for the termination action: the action must be brought after the three-month period, not within it . Accordingly, a lessor may obtain termination of the lease for non-payment of rent more than three months after the judgment opening his lessee's court-supervised liquidation, where his application, submitted after the decision ordering the transfer of the business, predates the auction sale of the business . Article L. 622-14 specifies that if payment of the sums due is made before expiry of the time-limit, there is no reason to terminate the lease.

The bankruptcy judge must confine himself to noting the termination of the lease if the conditions are met, as well as the date of such termination . He may not grant the payment deadlines provided for in paragraph 2 of Article L. 145-41 of the Commercial Code, which is inapplicable to this specific procedure, or even make use of the option to grant payment deadlines under Article 1343-5 of the Civil Code .

When not relying on a resolutory clause, the lessor of the premises allocated to the debtor company's business is not obliged to issue a summons to pay to the legal representative , nor to notify him of his request if he has served it on the debtor company's manager . On the other hand, if the lessor pursues the termination of the lease after the legal representative has waived his right to continue the lease, he must notify the previously registered creditors of his claim to enable them to assert their rights .

The special rules applicable to court-supervised liquidation procedure  also enable the lessor to request judicial termination of the lease for reasons that predate the court-supervised liquidation judgment or, where the latter was pronounced after safeguard or receivership proceedings, the judgment opening the procedure that preceded it.

Finally, the failure of the receiver to respond to a formal notice to take a decision on the continuation of the lease, sent by the lessor of a building used for the company's business, does not result in the automatic termination of the lease , since the provisions of Article L. 641-11-1 do not apply to commercial leases.

In accordance with Article L. 145-41 of the Commercial Code, any clause in the lease providing for termination ipso jure only takes effect one month after an unsuccessful summons to pay. The summons must mention this time-limit, failing which it will be null and void. A lease contract is terminated ipso jure if the rent paid after the opening of the debtor's insolvency procedure has not been paid within one month of the summons to pay sent to the legal representative . The Court of Cassation ruled that the termination request was inadmissible in the absence of a summons to pay containing the resolutory clause . In addition, the legal representative can apply for payment extensions and suspension of the effects of the resolutory clause, as long as the termination of the lease has not been established by a final decision . The jurisdiction conferred on the bankruptcy judge does not exclude that of the interim judge, called upon to rule in application of the resolutory clause inserted in a lease, independently of the progress of the insolvency procedure .

Cass. com., 20 September 2017, LawLex202100003324JBJ (LJ).

Cass. com., 20 September 2017, cited above.

Cass. com., 18 May 2022, LawLex202200004423JBJ (LJ); CA Paris, 24 September 2020, LawLex202200010409JBJ (LJ).

Cass. 3e civ., 24 November 2021, LawLex202200000400JBJ (LJ) ; Cass. com., 9 October 2019, LawLex202100003349JBJ (LJ), Cass. com., 15 January 2020, LawLex202200000401JBJ (LJ), CA Paris, 24 September 2020, LawLex202200010409JBJ (LJ).

Cass. com., 15 November 2017, LawLex202100003352JBJ (LJ).

Cass. com., 1 October 2002, LawLex202100002330JBJ (LJ).

Cass. com., 2 March 2010, LawLex202100002326JBJ (RJ).

Cass. com., 10 July 2001, LawLex202100003323JBJ (LJ).

Cass. com., 28 June 2011, LawLex202100003347JBJ (RJ).

Cass. com., 6 December 2011, LawLex202100003348JBJ (LJ).

Cass. com., 24 January 2018, LawLex202100002327JBJ (S).

Cass. com., 17 October 1989, LawLex202100001115JBJ (LJ).

Cass. com., 19 February 2013, LawLex202100003351JBJ (LJ).

Cass. com 18 January 2023, LawLex202300001172JBJ (LJ).

CA Paris, 24 September 2001, LawLex202200010409JBJ (LJ).

Cass. com., 15 November 2017, cited above.

Cass. com., 21 February 2012, LawLex202100003353JBJ (LJ).

Bankruptcy Law

804. Termination of lease contract

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

804. Termination of lease contract

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise