A daughter occupies a building from her father’s estate under a verbal lease he had granted her. She pays rent. Her co-heirs claim an occupation indemnity (indemnité d’occupation, the sum owed by a co-owner who enjoys jointly owned property alone), and the Versailles court of appeal orders her to pay 578.88 € a month since 2010, because “the rental value of the building is much higher than the rent”. The Cour de cassation (the French supreme court for civil matters), on 18 March 2020, in a reported decision, quashed: a co-owner who occupies “as a tenant” does not infringe “the equal and concurrent rights of the other co-owners”, and therefore owes no occupation indemnity. The gap between the rent and the rental value is not nothing, though: it may reveal an indirect gift, to be brought back to the estate. For the valuer, the measure is the same, rental value; the legal basis changes everything.
The facts
A man dies, leaving his wife and two children. His daughter occupies a building of the estate under a verbal lease granted by the deceased, and pays rent. During the accounts, liquidation and partition, the Versailles court of appeal, on 23 November 2018, orders her to pay the joint ownership, from 29 April 2010, an occupation indemnity of 578.88 € a month, on the ground that the rental value of the building is much higher than the rent she pays.
She appeals: a co-owner who holds a title of her own to enjoy the building does not use the jointly owned property within the meaning of article 815-9; the joint ownership, as landlord, even owes her quiet enjoyment; and the gap between rent and rental value could only give rise to a rapport claim, if an indirect gift were proved.
The decision
The first civil chamber quashed, under article 815-9 of the Civil Code (Cass. 1re civ., 18 March 2020, no. 19-11.206, reported). “Under the first paragraph of that provision, each co-owner may use and enjoy the jointly owned property in accordance with its purpose, to the extent compatible with the rights of the other co-owners. Under its second paragraph, a co-owner who uses or enjoys the jointly owned property alone is, unless otherwise agreed, liable for an indemnity.”
“In so ruling, whereas it had found that Mrs Q. occupied the jointly owned building as a tenant, so that she did not infringe the equal and concurrent rights of the other co-owners, the court of appeal breached the above provision.” The quashing is limited to the occupation indemnity; remittal to the Paris court of appeal.
What this changes for valuation
The title to occupy decides the basis. The occupation indemnity of article 815-9 compensates the sole enjoyment of jointly owned property, the enjoyment that deprives the other co-owners of its use. A co-owner who occupies as a tenant, under a lease granted by the deceased and passed to the joint ownership, does not occupy on that basis: she performs a contract, and the joint ownership receives a rent. There is therefore no indemnity, whatever the level of the rent. A valuer given an accounts assignment between co-owners begins by establishing whether a title exists, written or verbal, and since when; the calculation comes next. The glossary describes the indemnité d’occupation and indivision.
A rent below rental value: a possible indirect gift. The appeal suggested it, and the Court does not contradict it: if the deceased let to his child at a rent far below the market, with donative intent, the advantage is an indirect gift subject to rapport, as in the case of the heir housed free of charge by the usufructuary. The measure is then the gap between rental value and rent paid, period by period, from the start of the lease to the death; after the death, the lease continues with the joint ownership as landlord, and an undervalued rent is a matter of managing the joint ownership, not of rapport. The expert report therefore separates the periods and the bases.
Rental value remains the measure. Whether for an occupation indemnity, as in the article on the occupation indemnity until partition, or for an indirect advantage, the valuer establishes the rental value of the property at each date, with comparable rent evidence, and in the actual condition of the property. The difference lies in what is done with it: a precariousness allowance and payment to the joint ownership in the first case, rapport to the estate and set-off against the heir’s share in the second.
The verbal lease must be proved. A verbal lease is proved by regular rent payments, receipts, the landlord’s tax returns. Without that proof, the occupant is a co-owner enjoying the property alone, and the indemnity is owed. The report gathers those documents when it knows of them, and tells the judge what is missing, because the figure it produces makes sense only with the right basis. The guide on the house occupied by an heir describes these situations.
What the valuer takes from it
- A co-owner who occupies the jointly owned building under a lease, even verbal, owes no occupation indemnity: they do not infringe the rights of the other co-owners.
- A rent below rental value does not turn the tenant into a sole occupant.
- The gap between rent and rental value may, however, characterise an indirect gift, subject to rapport if donative intent is established.
- Rental value, period by period, remains the measure in both cases; the basis changes the use of the figure.
- The report first establishes the title to occupy and its proof, then computes.
Further reading
The Market value page describes the assignment, its timescale and its fee. The guide Inheritance: house occupied by an heir and the glossary entries indemnité d’occupation, indivision and valeur locative complement this article. On the same theme: Occupation indemnity: until partition or return of the property and Housed free by the usufructuary: an advantage to bring back. The decision is available on Légifrance.
What next
An heir living in the family house under a lease, at a modest rent, and accounts to settle between co-owners?
I establish the rental value of the property for each period and the gap with the rent paid, to say whether there is an occupation indemnity or an indirect gift to bring back, for the notary or the court.
Free quote, by email or by phone. No commitment before the quote is accepted. Fees are never linked to the value of the property (Charte de l’expertise, Title I, §2.1).
