A municipality holds from a joint public body, under a fifty-year emphyteutic lease (bail emphytéotique, a long lease conferring a real right), plots in a departmental harbour. It has two oyster-farming sheds built there, then assigns part of the lease to a bank, while the buildings are sold to a company, which resells them in 2000 to a couple, with a sub-lease of the plots. In 2013 the department, the municipality and the bank terminate the lease by agreement. The buyer’s widow, invited to sign a precarious occupation agreement, refuses: she bought the buildings by notarial deed, she owns them. The court holds that the department owns them, and on 18 December 2025 the Cour de cassation (the French supreme court for civil matters) confirmed, in a reported decision: the emphyteutic lessee benefits from accession only during the lease, it transfers only its real right, which ends at the term or on termination, and “the acquirer of that right is not the owner of the buildings at the end of the emphyteutic lease”. What the couple bought in 2000 was not a building but a right of limited duration.
The facts
By deed of 13 December 1993 a joint public body, succeeded by the department of Hérault, grants a municipality a fifty-year emphyteutic lease, for the establishment of activities linked to the sea and to boating, over plots in a departmental harbour. The municipality has two oyster-farming sheds built, completed by a maritime cooperative with its authorisation. On 23 May 1995 the municipality assigns to a savings bank the part of the lease covering the plots carrying the two sheds, for the remaining term, and the cooperative sells the sheds to a property company. On 5 May 2000 that company resells them to a couple, who sub-lease the plots from the savings bank on the terms of the original lease.
By deeds of 12 and 13 September 2013 the department, the municipality and the savings bank terminate the 1993 lease by agreement. After her husband’s death, the widow refuses the precarious occupation agreement offered by the harbour operator; reports of unlawful occupation of public property are drawn up, and the administrative court of appeal refers to the civil courts the question of who owns the buildings. The Béziers court, on 16 September 2024, finds that the department owns them.
The decision
The third civil chamber dismissed the appeal (Cass. 3e civ., 18 December 2025, no. 24-20.480, reported). Under article L. 451-1 of the Rural and Maritime Fishing Code, “the emphyteutic lease confers on the lessee a real right capable of being mortgaged”, and under article L. 451-10, “the emphyteutic lessee benefits from the right of accession for the duration of the lease”.
“It follows that the emphyteutic lessee, who benefits from accession only for the duration of the emphyteutic lease, cannot transfer more than the real right it holds over the buildings, which is extinguished, unless otherwise stipulated, at the term or upon termination of the emphyteutic lease. Accordingly, the acquirer of that right is not the owner of the buildings at the end of the emphyteutic lease.” The argument drawn from the right of property and the European Convention changes nothing.
What this changes for valuation
One does not buy a building, one buys a right that expires. The lessee under an emphyteutic lease, or a building lease, owns the buildings during the lease; at the end they revert to the lessor, without indemnity unless otherwise agreed. Whoever buys those buildings during the lease buys that temporary right, nothing more. Its value is therefore not that of a comparable freehold building; it is the present value of the benefits it procures until the term, income or enjoyment, net of the ground rent and charges, reduced for risk. Twenty years from the term it is far from freehold value; five years from it, it tends towards zero.
The method. Valuing a temporary real right means discounting the cash flows over the remaining term: rents or use value, less the ground rent, maintenance and major repairs borne by the lessee, at a rate reflecting the risk specific to the structure. Comparables, where they exist, are assignments of emphyteutic or building leases of similar remaining term, not sales of freehold premises. The report states the remaining term, the exit clauses, and what becomes of the buildings at the term: that is what separates a right still worth a great deal from one worth almost nothing.
Termination by others than oneself. The lease was terminated in 2013 by the lessor, the original lessee and the assignee of the lease, without the sub-lessee. Her right, ancillary to the lease, disappeared with it. That is the major risk for a buyer who is not party to the head lease: she depends on people she does not control. The valuer flags it and translates it into the rate, or into an explicit discount, rather than valuing the right as if it were bound to run to its term.
Public property, on top. The plots lay in a departmental harbour; at the end of the lease, occupation becomes unlawful, with a fine for unlawful occupation of public property, and the only way out is a precarious occupation agreement. On public property there is never any hope of ownership by prescription or of permanent accession; the article on the sale of public domain land says so for sales, this ruling says so for buildings.
For the bank and for the partition. The emphyteutic lessee’s right can be mortgaged, and banks take it as security; its value to them declines every year, and prudent value takes that into account. In a partition or an estate, that right is declared and valued the same way, for its remaining term, and not as the house it allows one to live in.
The ground rent is not reviewed to rental value. In a reported ruling of 8 September 2016 (Cass. 3e civ., no. 15-21.381), concerning a plot on the Croisette in Cannes let in 1928 for 99 years at 1 franc a year, the Cour de cassation held that rental value is “foreign to the economy of the emphyteutic lease contract”. For the landlord, the consideration for the tenant’s enjoyment is the absence of renewal and the accession without indemnity, at the end of the lease, of the tenant’s works and improvements; the landlords could not have the rent reviewed to rental value. The valuation therefore does not treat the ground rent as a market rent: the landlord’s value lies mainly in the reversion of the buildings at the term, which the 2025 ruling discussed here sheds light on from the buyer’s side. The article on the review of the commercial rent after renewal presents that ruling.
What the valuer takes from it
- The emphyteutic lessee transfers only its real right over the buildings; that right ends at the term or on termination of the lease, unless otherwise stipulated, and the buyer is not the owner afterwards.
- The value of such a right is the present value of its benefits over the remaining term, net of ground rent and charges, at a rate reflecting the risk.
- Comparables are assignments of rights of similar term, not sales of freehold premises.
- A buyer who is not party to the head lease bears the risk of a termination decided without him; the report quantifies it.
- On public property, no ownership survives the lease.
Further reading
The Market value page describes the assignment, its timescale and its fee. The guide Banks: mortgage lending value and prudent value and the glossary entries méthode par le revenu, taux d’actualisation and valeur hypothécaire complement this article. On the same theme: Commercial lease on public land: void, but occupation is paid for and Public domain land sold: void sale, property tax compensated. The decision is available on Légifrance.
What next
A building bought on land held under an emphyteutic or building lease, and a value to establish?
I value the real right for its remaining term, with the income, the ground rent, the exit clauses and the risk of termination, for a purchase, a bank security or a partition.
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