A compulsory purchase (expropriation) sometimes takes only part of a business’s premises: the operator loses a fraction of the business and carries on working in what remains outside the land taken (emprise, the part compulsorily purchased). The value of the part lost is compensated, and the operator receives the reinvestment allowance (indemnité de remploi, which covers the costs of buying a replacement). But the reduced activity may suffer too, and the Versailles Court of Appeal refused to compensate that loss because the business was not being relocated. The reported decision of the Third Civil Chamber of the Cour de cassation (the French supreme court for civil matters) of 4 July 2024 quashes that ruling: this separate trading loss of the retained activity can be compensated, provided the operator proves it.
The facts
Following the compulsory purchase, for its benefit, of plots let to a company that sells and repairs vehicles, the Île-de-France public land agency (EPFIF) applied to the expropriation judge (juge de l’expropriation) to fix the compensation due to that company.
The eviction was only partial: the company argued that it had been evicted from part of the premises where it carried on its business, and the Court of Appeal itself reasoned in terms of a partial loss of the business (fonds de commerce, the business as a going concern). Among the heads of compensation claimed was one for business disruption (trouble commercial).
By a judgment of 15 February 2023, the Versailles Court of Appeal reversed the first-instance judgment on business disruption and rejected the claim. It held that such compensation is “due in the event of a transfer of the business to compensate for the necessary period of adjustment” (translated from the French), but not “in the event of a partial loss of the business, since the evicted activity is not intended to resume”.
The company appealed to the Cour de cassation. Its ground of appeal argued that eviction from part of the premises, entailing a partial loss of the business, “necessarily causes it business disruption”.
The decision
The Cour de cassation quashed the decision on that point (Cass. 3e civ., 4 July 2024, appeal no. 23-15.027, reported decision), under article L. 321-1 of the French Expropriation Code, under which “the compensation awarded covers the whole of the direct, material and certain loss caused by the expropriation”.
It first restated the principle: “The evicted operator may claim compensation for the business disruption resulting from the expropriation measure, provided that it is distinct from the loss compensated by the award of the total value of the business and by the reinvestment allowance.”
It then transposed it to partial eviction, the partial value of the business taking the place of its total value. The Court of Appeal had breached the text, “whereas the partial eviction of a business may generate a loss affecting the activity carried on by the operator in the premises outside the land taken, distinct from the loss compensated by the award of the partial value of the business and by the reinvestment allowance, the burden of proving it lying on the operator”. The decision was quashed on that point only, and the case was sent back, to be decided again, to the Versailles Court of Appeal, differently constituted.
The Court thus rejected the Court of Appeal’s reading, which reserved business disruption for the transfer of a business. But it wrote “may generate”, not “necessarily” as the appeal argued, and left the burden of proof on the operator. It ruled neither on whether the loss existed in this case nor on its amount, which are for the Court of Appeal now required to decide the case again.
What this changes for valuation
Three distinct heads. On partial eviction, the operator’s compensation includes in particular three heads that do not overlap: the partial value of the business, that is the share of clientele and turnover that disappears with the land taken; the reinvestment allowance; and the loss suffered by the activity carried on outside the land taken. The Charte de l’expertise en évaluation immobilière (the French property valuation charter) sets the compensation of an expropriated commercial tenant on bases comparable to those of statutory eviction compensation (indemnité d’éviction), principal and ancillary (6th edition, November 2025, Title III, § 1.20), and lists business disruption among those ancillary heads (§ 1.19). The decision shows that it is not limited to the interruption caused by a move: it can arise from the reduced business itself.
A boundary, without double counting. If the partial value of the business is calculated on the turnover generated in the area taken, business disruption cannot count that same turnover again. The report places in the partial value what disappears with the land taken, and in business disruption what deteriorates in the part retained. For a garage, for example: a smaller workshop handling fewer vehicles, a reduced display or parking area, altered access, a reorganisation of the site that ties up staff for several months.
Evidence to build. The decision presumes nothing. The report compares the layout of the site before and after the taking, measures the capacity lost by the part retained, relies on the accounts for recent financial years and, if possession has been taken, on the observed trend in activity. It separates the temporary disruption, the time needed to reorganise, from any lasting fall in profitability, and checks that the latter is not already included in the partial value. If the figure uses months of EBITDA, the base is the activity carried on outside the land taken.
The other scenarios. If the taking forces the whole business to move, the transfer pattern applies: relocation costs, quantified without any allowance for wear, and disruption linked to the relocation. If relocation is impossible, the total value of the business is compensated, and the possibility of relocating is proved site by site. On the owner’s side, a partial taking may also cause the property retained a direct loss, compensated in addition to the reinvestment allowance.
Other points, decided separately. What the judge may award to an expropriated party who has neither responded to the offers nor served written submissions is governed by a separate procedural rule. Full compensation also has its limits: it covers only loss resting on a legally protected right.
What the valuer takes from it
- On partial eviction of a business, the activity carried on outside the land taken may suffer a loss compensated in addition to the partial value of the business and the reinvestment allowance.
- Business disruption is not reserved for the transfer of a business.
- This loss is not presumed: the operator proves it, with plans, accounts and lost capacity in support.
- The report separates what disappears with the land taken from what deteriorates in the part retained, without counting the same turnover twice.
- The figure separates temporary disruption linked to the reorganisation from any lasting fall in the profitability of the part retained.
Further reading
The Compulsory purchase and pre-emption page describes the assignment, its timescale and its fee. The guide Compulsory purchase of my business premises: what compensation? and the glossary entries business disruption (trouble commercial), reinvestment allowance (indemnité de remploi) and business as a going concern (fonds de commerce) complement this article. On other points of compulsory purchase compensation: Compulsory purchase of an unlawful building: no compensation due and Silent owner in compulsory purchase: award may exceed the offer. On the same theme: Compulsory purchase of a regulated business: proving relocation and Expropriated trader’s relocation: no allowance for wear. The decision is available on Légifrance.
What next
Is a compulsory purchase taking part of your business premises?
I quantify separately the value of the part of the business lost, the reinvestment allowance and the loss suffered by the activity that continues, from your accounts and the site plan before and after the taking. The report puts before the expropriation judge the evidence that the Cour de cassation requires from the operator.
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).
