A commercial building belongs to two people under different titles, one holding the usufruct (usufruit, the right to use the property and take its income), the other the bare ownership (nue-propriété, which becomes full ownership when the usufruct ends); together they refuse to renew the lease, and eviction compensation (indemnité d’éviction, owed to a French commercial tenant refused renewal) becomes due. In a reported decision of 19 December 2019, the Third Civil Chamber of the Cour de cassation (the French supreme court for civil and commercial matters) held that the usufructuary, as sole landlord, alone owes it, even where the bare owner signed the refusal alongside them. For the valuer, the amount does not change; what changes is the party who owes it and the way split ownership (démembrement) is read.
The facts
On 5 March 2004, a usufructuary and a bare owner of a building used for commercial purposes jointly served on a couple of tenants a refusal to renew the lease without eviction compensation. By a ruling of 20 February 2008, that refusal was held to lack a serious and legitimate ground.
In a ruling of 3 October 2018, the Toulouse Court of Appeal ordered the usufructuary and the bare owner, jointly and severally (in solidum), to pay the tenants €134,250 as principal eviction compensation. It held that the two owners had together served the refusal to renew, that the bare owner had the capacity of landlord, and that both were liable for the compensation since the refusal to renew exceeded the powers of the usufructuary alone. It also ordered the bare owner to pay the costs (dépens, the court costs listed by law), including the court-appointed expert’s fees, and €3,000 to the tenants towards their non-recoverable appeal costs (frais irrépétibles, costs not included in the dépens, chiefly lawyers’ fees).
The decision
The Cour de cassation partly quashed the ruling (Cass. 3e civ., 19 December 2019, appeal no. 18-26.162, reported), on the basis of article 595, last paragraph, of the French Civil Code and article L. 145-14 of the French Commercial Code. Its reasoning has three steps.
First, the usufructuary, who has the enjoyment of the property, “cannot, under article 595, last paragraph, of the Civil Code, grant a commercial lease or renew it without the concurrence of the bare owner” (translated from the French), or, failing the latter’s agreement, without court authorisation, “because of the right to renewal of the lease that the tenant enjoys even after the usufruct has ended”.
Second, by contrast, “the usufructuary has the power to end the commercial lease and, consequently, to serve on the tenant, without the concurrence of the bare owner, a notice refusing renewal”. The Court cited, respectively, its decisions of 24 March 1999 (no. 97-16.856) and 29 January 1974 (no. 72-13.968).
Third, it drew the consequence: “having, alone, the capacity of landlord, all of whose obligations towards the tenant they assume, the eviction compensation due under article L. 145-14 of the Commercial Code, whose purpose is to compensate the loss caused to the tenant by the non-renewal of the lease, is borne by them”. By ordering the bare owner to pay jointly with the usufructuary, “whereas the eviction compensation was owed only by the latter”, the Court of Appeal breached those provisions.
The quashing was without remand (article 627 of the French Code of Civil Procedure), the Court ruling on the matter itself. It ordered the usufructuary alone to pay the tenants €134,250 as principal eviction compensation and to bear the costs of the appeal proceedings (dépens d’appel), including the court-appointed expert’s fees, and dismissed the tenants’ claim against the bare owner for their non-recoverable appeal costs (article 700 of the Code of Civil Procedure).
The decision addresses neither the amount of the compensation, taken over as it stood, nor its method of calculation. Another reported decision of 2019, of 28 March, decides a different question, the repayment of ancillary allowances by an evicted tenant who did not relocate; it is discussed in a separate article.
What this changes for valuation
The amount does not depend on who the landlord is. The compensation, in the decision’s own words, is meant to make good “the loss caused to the tenant by the non-renewal of the lease”. It is therefore measured on the tenant’s side: value of the business (fonds de commerce) where the clientele is lost, transfer compensation where the business can be moved, plus ancillary allowances (Charte de l’expertise en évaluation immobilière, the French property valuation charter, 6th edition, November 2025, Title III, §1.19). The method stays the same; the article on the leasehold right of the premises left shows how that loss is built when the tenant relocates.
The report describes the state of ownership. In a building under split ownership, the valuer records who holds the usufruct and the bare ownership, the nature of the usufruct, for life or for a fixed term, and who signed each deed: original lease, renewals, notice. The decision supplies the key: renewal requires the bare owner’s concurrence or court authorisation, refusal does not. It does not say what becomes of the debt if the usufruct ends before payment: the valuer notes the duration of the usufruct without taking a position on that question of law.
The bare owner’s signature does not make them a debtor. The Court of Appeal had inferred a joint debt from the co-signed refusal. The Court quashed: since the usufructuary alone has the capacity of landlord, the bare owner’s presence on the deed was not enough to make them liable. For the tenant, payment therefore rests on the usufructuary alone. Independently of this decision, which does not deal with limitation, the claim remains subject to the two-year period of article L. 145-60 of the Commercial Code, discussed in the article on the tenant’s time limit to act.
The debtor is named, not the value of each right. The decision places the compensation on the usufructuary; it deals with no recourse between usufructuary and bare owner and says nothing about valuing the usufruct and the bare ownership separately. Where these two rights are valued separately, the report records the debt and its debtor, the usufructuary, and states how the debt is taken into account. Other decisions deal with split ownership in different contexts: the dividend from the sale of all the buildings of an SCI (société civile immobilière, a French property-holding company) goes to the bare owner, and, between the parties to a partition, split-ownership buildings are valued in full ownership, without discount.
What the valuer takes from it
- In a building under split ownership, the usufructuary alone has the capacity of landlord: they may refuse renewal alone and alone owe the eviction compensation.
- The bare owner is not liable for the compensation, even if they signed the refusal to renew with the usufructuary.
- The compensation is measured on the tenant’s loss: split ownership changes neither the method nor the amount.
- The report describes the state of ownership and who signed each deed, lease, renewals, notice.
- The report names the usufructuary as debtor and states how the debt is taken into account when the split rights are valued separately.
Further reading
The Challenging or justifying eviction compensation under a French lease page describes the assignment, how it is conducted and its fee. The guide My landlord refuses to renew my lease in France: what compensation? and the glossary entries démembrement, usufruit and indemnité d’éviction complement this article. The other 2019 decision is discussed separately: Eviction compensation: ancillary sums repaid without relocation. On the same theme: Relocated for less, the leasehold right lost still has a value and Modified renewal offer: it is a refusal, compensation is due. The decision is available on Légifrance.
What next
A refusal to renew in a building held in usufruct and bare ownership?
I value the eviction compensation from the tenant's loss, business or leasehold right and ancillary heads, describing the rights of the usufructuary and of the bare owner and the deeds each of them signed. The report allows the amount to be discussed with the party who owes it.
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).
