A landlord first offered to renew a French commercial lease (bail commercial), then changed its mind: it refused renewal and offered eviction compensation (indemnité d’éviction, the statutory compensation owed to a tenant whose lease is not renewed). Can it then dispute that its tenant falls within the statutory regime of commercial leases (statut des baux commerciaux), for instance for lack of registration in the trade and companies register (immatriculation au registre du commerce et des sociétés), when more than two years have passed since the effective date of the notice? The Cour de cassation (the French supreme court for civil and commercial matters) answered yes on 7 September 2017, in a reported decision: the denial remains possible as long as the compensation has not been finally set. For the valuer who quantifies that compensation, the right to compensation itself can therefore still be disputed until a final decision has been given on its amount.
The facts
A company owned commercial premises which it had let, on renewal, for nine years from 1 January 1996, to an individual tenant. On 28 September 2009 it served on him a notice to quit (congé) for 31 March 2010, with an offer of renewal. On 6 March 2012 it served a new notice, this time refusing renewal and offering eviction compensation. On 20 July 2012 it sued him for eviction, denying him statutory protection for lack of registration at the date of the notice and at its effective date.
In a judgment of 30 March 2016 the Paris Court of Appeal held the action denying the right to statutory protection time-barred. It found that the landlord had to act within the two-year limitation period of article L. 145-60 of the French Commercial Code, running from the effective date of the notice, the registration condition being assessed at that date. The landlord appealed to the Cour de cassation.
The decision
The Cour de cassation quashed the judgment in its entirety (Cass. 3e civ., 7 September 2017, appeal no. 16-15.012, reported), on the basis of articles L. 145-1 and L. 145-60 of the Commercial Code. It held that the Court of Appeal had breached those texts by ruling as it did, “whereas the landlord who has offered payment of eviction compensation after exercising its option may deny the tenant the right to the statutory regime of commercial leases as long as no final decision has been given on the setting of the eviction compensation” (translated from the French). The case was sent back to the Paris Court of Appeal, differently composed.
The rule has two conditions. The landlord must have exercised its option (droit d’option), that is, gone back on the renewal to refuse it (article L. 145-57, second paragraph, of the Commercial Code, which the decision does not cite), which obliges it to pay eviction compensation; and it must have offered that compensation. Its power to deny statutory protection then lasts until the final decision on the amount of compensation, and not merely two years after the effective date of the notice, as the Court of Appeal had held.
The Court did not rule on the merits: it did not say whether or not the tenant was registered at the relevant dates, nor whether he should lose statutory protection; those questions are left to the Court of Appeal that will rehear the case. Nor did it rule on the position of a landlord who refuses renewal from the outset, without a prior option.
What this changes for valuation
Compensation quantified subject to statutory protection. Where the landlord has exercised its option, the offer of compensation does not close the debate on the principle: until the final decision on the amount, the landlord may still argue that the tenant does not meet the conditions of the statutory regime. If that challenge succeeds, there is no longer any eviction compensation to set, since the right to renewal, and the compensation owed if it is refused, arise from the statutory regime. The valuer therefore works on a right that may still be challenged during the assignment. The report quantifies the compensation and flags the factual points that could deprive the tenant of any right to compensation, without prejudging that question, which is for the judge.
The conditions of statutory protection are checked at the start of the assignment. Here the denial concerned registration at the date of the notice and at its effective date. At the start of the assignment the valuer therefore gathers the registration extracts at the relevant dates and records the activity observed on site. In a reported decision of 22 September 2016, the Cour de cassation held that registration must cover the activity actually carried on in the premises, and that the landlord may deny statutory protection on that ground without prior formal notice; the article on registration for the activity carried on presents that decision.
Two amounts to follow in parallel. Exercising the option also affects the sums due during occupation. In a reported decision of 27 February 2025, the Court held that the tenant then owes an occupation indemnity (indemnité d’occupation) equal to the rental value, which retroactively replaces the rent from the expiry of the lease (occupation indemnity after the landlord’s option). The report presents separately the eviction compensation and the occupation indemnity, each with its date and method, so that each amount can be used according to the outcome of the debate on statutory protection.
Time limits are not to be confused. This power of the landlord does not relieve the tenant of watching their own time limits. For a notice refusing renewal from the outset with an offer of compensation, the Court held on 12 February 2026 that the tenant’s action for payment of the compensation is time-barred two years after the effective date of the notice, the landlord’s bad faith neither interrupting nor suspending that period (the time-barred tenant has no title). The two decisions concern different actions, and the more recent one does not go back on the 2017 ruling. Withdrawal of an offer of renewal on serious grounds follows yet another rule: its period runs from the day the landlord learned of the breach, as explained in the article on withdrawal for serious cause.
What the valuer takes from it
- After exercising the option and offering eviction compensation, the landlord may deny statutory protection as long as the compensation has not been finally set.
- The Court of Appeal could not hold that denial time-barred two years after the effective date of the notice.
- From the start of the assignment, the valuer checks registration at the relevant dates and its match with the activity carried on, and records these facts without characterising them legally.
- The report presents the eviction compensation and the occupation indemnity separately, so that each amount follows the outcome of the debate on statutory protection.
- This power of the landlord does not relieve the tenant of watching their own time limits for claiming compensation; the 2017 ruling says nothing about those limits.
Further reading
The Eviction compensation page describes the assignment, how it is conducted and its fee. The guide My landlord refuses to renew my commercial lease and the glossary entries droit d’option, indemnité d’éviction and bail commercial complement this article. Two other reported decisions of 2017 are discussed separately: Right to remain lost: a harm separate from eviction compensation and Withdrawing a renewal offer for cause: time runs from discovery. On the same theme: Eviction compensation: once time-barred, the tenant has no title and Eviction compensation in France: the tenant has two years to act. The decision is available on Légifrance.
What next
A landlord disputing statutory protection before the eviction compensation has been set?
I establish the eviction compensation from the accounts, the lease and market references. The report also records the facts relevant to the debate on statutory protection, registration and activity observed on site, without deciding what is for the judge.
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).
