Farm tenants build, without their landlord’s consent, farm buildings on the let holding and fit out an extra bedroom in the farmhouse. On renewal, the landlord asks the rural lease tribunal to set the farm rent (fermage, the regulated rent of an agricultural lease) including the rental value of those buildings: she has become their owner by accession, and the tenants, lacking consent, will get no indemnity when they leave. The Rouen court of appeal agrees and instructs an expert to quantify the rent “having regard to the buildings put up”. On 28 November 2024 the Cour de cassation (the French supreme court for civil matters), in a reported decision, quashed: “improvements irregularly made to the let holding by the tenant, which will give rise to no indemnity from the landlord, cannot be taken into consideration in setting the price of the renewed lease”. The rent is computed on what the landlord let, not on what the tenant built, and the expert’s assignment changes its object.
The facts
By deed of 20 June 1982 an owner grants a long-term lease of a farm holding including a dwelling house. The lease is assigned in 1996 to new tenants. They have various farm buildings built on the holding, without the landlord’s prior consent, and fit out an extra bedroom in the house.
On 15 January 2020 the landlord applies to the rural lease tribunal to set the rent of the renewed lease, asking that the price take account of the rental value of those buildings. The Rouen court of appeal, on 13 April 2023, finds the buildings irregular and holds the landlord entitled to have them included in the price of the renewed lease: the landlord’s accession takes effect at the expiry of the current lease, the renewed lease being a new lease; and while the tenant’s improvements are in principle settled only on leaving the farm, that reasoning holds only for authorised works, since lack of consent deprives the tenant of any indemnity at the end of the lease. It orders an expert report to quantify the rent having regard to the buildings. The tenants appealed.
The decision
The third civil chamber quashed, under articles L. 411-12, L. 411-50, L. 411-69 and L. 411-73 of the Rural and Maritime Fishing Code (Cass. 3e civ., 28 November 2024, no. 23-17.036, reported). The renewed lease is concluded on the terms of the previous lease, and its price “is established in accordance with articles L. 411-11 to L. 411-16”; the rent may not include, on top of the price so computed, “any royalty or service of any kind”, save investments by the landlord beyond its obligations, investments imposed by a public body, or the outgoing tenant’s indemnity borne by the landlord. A tenant who made improvements without the required consent is deprived of the indemnity the texts provide.
“It is settled that, in setting the rent of the renewed lease, no account is to be taken of the improvements made by the tenant, which are to be assessed only on leaving the farm.” Hence: “improvements irregularly made to the let holding by the tenant, which will give rise to no indemnity from the landlord, cannot be taken into consideration in setting the price of the renewed lease”. The quashing extends to the expert report ordered to quantify the rent having regard to the buildings. The case is sent back to the Amiens court of appeal.
What this changes for valuation
The farm rent pays for the holding as the landlord let it. The price of a farm lease is not a market rental value: it is set between minima and maxima fixed by prefectoral order, from the nature of the land, the farm buildings and the dwelling house the landlord makes available. Buildings the tenant put up are not part of that provision; they are the result of the tenant’s own investment, and their fate is settled on leaving the farm, through the indemnity of articles L. 411-69 and following if the works were authorised, through nothing at all if they were not. In both cases they stay out of the rent. The article on the farm rent of an equestrian centre recalls the same logic for a global clause.
The landlord gets no rent on buildings it did not pay for. The landlord’s argument had a ring of common sense: owner by accession, she now let a better-equipped holding. The Court refuses: the sanction for lack of consent is the loss of the exit indemnity, not a higher rent during the lease. The expert instructed to set the rent therefore describes the state of the holding at the start of the lease and its changes, separating what the landlord financed, what the tenant did with consent and what the tenant did without, and keeps only the first category in the rent base.
What can, by contrast, raise the rent. The text reserves three cases: the landlord’s investments beyond its legal obligations, made with the tenant’s agreement; those a public body imposes on it; and the outgoing tenant’s indemnity it has definitively borne. A landlord who buys back, when the previous tenant leaves, the buildings that tenant put up with consent can therefore include them in the rent of the next lease. The report identifies those investments, their date, their cost and the tenant’s agreement, because that evidence is what opens the increase.
The exit indemnity and the rent are two separate valuations. For authorised improvements, the indemnity due to the outgoing tenant is computed under article L. 411-71: cost of the works valued at the end of the lease, amortised per year of use, and not the added value brought to the holding, unless the parties specifically agreed otherwise (Cass. 3e civ., 6 October 2016, no. 15-18.796, discussed on this site). For the rent, those same improvements are neutral. The report of an expert instructed on both questions says so clearly, with two separate computations and two dates, that of the renewal for the rent and that of departure for the indemnity.
An expert’s assignment to frame. The court of appeal had instructed the expert to “quantify the farm rent having regard to the buildings put up by the tenants”, and it is precisely that assignment that falls with the ruling. When the proposed assignment rests on a contested legal principle, the expert flags it in the preliminary report and, where necessary, quantifies both hypotheses, with and without the buildings, so the court has both figures whatever law it applies. The guide on producing a valuation in court describes that way of presenting alternative figures.
Sharecropping converted to a farm lease: the landlord may plead a disproportionate interference. In a reported ruling of 10 October 2019 (Cass. 3e civ., no. 17-28.862), the Court held that the judge must “examine in concrete terms whether the conversion of a sharecropping lease into a farm lease under article L. 417-11 of the Rural Code, in that it deprives the landlord of receiving the fruits of the let plot in kind and in that it lacks any effective compensation system, does not constitute a disproportionate interference” with their right to the peaceful enjoyment of possessions. The measure of that interference is an income gap: the value of the fruits in kind against the farm rent, which the valuer quantifies on vines or land.
What the valuer takes from it
- The rent of the renewed farm lease is set under articles L. 411-11 and following, on the holding as the landlord let it.
- The tenant’s improvements are assessed only on leaving the farm; those made without consent give rise to no indemnity and do not raise the rent either.
- Only the landlord’s investments beyond its obligations, those imposed by a public body and the exit indemnity it bore can raise the price.
- The report separates the landlord’s buildings, the authorised improvements and the irregular improvements.
- When the assignment rests on a contested principle, the expert quantifies both hypotheses.
Further reading
The Commercial rent and leases page describes the assignment, its timescale and its fee. The guide Producing a valuation in French court: which format and the glossary entries valeur locative, pré-rapport and expert judiciaire complement this article. On the same theme: Farm rent of an equestrian centre: the global clause is unlawful and Farm tenant’s pre-emption: the conditions are checked afterwards. The decision is available on Légifrance.
What next
A farm rent to set on renewal, buildings put up by the tenant, and a dispute over what goes into the price?
I set the farm rent under the prefectoral orders and the state of the holding as the landlord let it, separating the landlord's investments, the tenant's authorised improvements and those that were not, for the rural lease tribunal or a negotiation.
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