The tenant of a building placed under an agreement with the State (logement conventionné, State-agreement housing) does not answer the annual income survey, is charged a supplément de loyer de solidarité (solidarity rent surcharge, linked to income) that he does not pay, and the landlord has the termination of the lease recorded. The tenant relied on the ELAN Act (loi ELAN, a 2018 housing reform), the specific penalty for failing to answer the survey and his modest income. In a reported decision of 16 October 2025, the Cour de cassation (the French supreme court for civil and commercial matters) rejects the first two arguments and quashes the order to pay the arrears, because the third went unanswered.
The facts
On 22 June 2010, a town acquired a building in which a man was a tenant under a lease governed by the law of 6 July 1989. On 5 August 2010, it entrusted its management, by a fifty-five-year long lease (bail emphytéotique), to a municipal property management company, which on 6 December 2010 entered into an agreement with the State under article L. 351-2, 3°, of the Construction and Housing Code (Code de la construction et de l’habitation, CCH).
As the tenant did not answer the annual income survey, from 2017 the landlord charged him the rent increased by the solidarity rent surcharge, the surloyer. When it went unpaid, the landlord served on him on 19 July 2018 a formal demand for payment invoking the termination clause (clause résolutoire), then sued for a ruling that the lease had terminated, for eviction and for payment.
On 25 May 2023, the Paris Court of Appeal found that the lease had terminated on 19 September 2018, ordered the eviction and ordered the tenant to pay, from 20 September 2018, a monthly occupation indemnity (indemnité d’occupation) “equal to the amount of the revised rent, increased by the charges and the solidarity rent surcharges, that would have been due had the lease continued” (translated from the French), together with €32,345.48 for rent, charges, surcharges and occupation indemnities up to 31 March 2020.
The appeal argued that the specific penalty for failing to answer the survey barred the termination; that, since Law no. 2018-1021 of 23 November 2018, known as the ELAN Act, no surcharge could be applied to the tenant, who had refused to sign a social housing lease; and finally that article L. 441-4 of the CCH caps the surcharge when, added to the basic rent, it exceeds 30% of the household’s income, whereas the tenant had evidence of having no income in 2018 and an annual income of €2,335 in 2019.
The decision
The Cour de cassation rejected the tenant’s first two arguments and allowed the third, solely on the ground that his submissions (his written pleadings before the Court of Appeal) went unanswered (Cass. 3e civ., 16 October 2025, appeal no. 24-11.047, reported decision).
Termination for non-payment remains available. The Court of Appeal rightly held that articles L. 442-3-4 and L. 482-3-1 of the CCH, “which penalise, by the loss of the right to remain in the premises, tenants who, over two consecutive years, do not answer the survey”, were “inapplicable to the action” brought by the landlord, based on the termination clause and the unpaid surcharges.
The ELAN Act is not retroactive. Restating its case law (3e Civ., 3 June 2021, appeal no. 20-12.353, reported), the Court held that the new provisions of article L. 441-3 of the CCH, read together with article L. 353-16, which give tenants in place when a social housing body (organisme d’habitations à loyer modéré) signs an agreement a choice between their old lease and a new lease in line with the agreement, “are not interpretative in nature so as to justify retroactive application”. The earlier texts had applied to the dwelling as soon as the 2010 agreement came into force, with no obligation to offer a new lease: “the legal effects of that agreement had been definitively acquired when the law of 23 November 2018 came into force”, and the surcharge could validly be notified afterwards.
The court must answer the income argument. Relying on article 455 of the Code of Civil Procedure, the Court recalled that “every judgment must state its reasons. A failure to answer the submissions amounts to a failure to give reasons.” The Court of Appeal had ruled “without answering the submissions” of the tenant, “who argued that he could not be held liable for the solidarity rent surcharge in view of his modest income”, with his 2018 and 2019 tax notices in support.
The quashing covers only the order to pay €32,345.48; on that point, the case was sent back to the Paris Court of Appeal, differently constituted. The termination, the eviction and the monthly occupation indemnity are not affected. The Court says neither that the 30% cap applied nor what amount was due: the court on remand will have to examine the argument.
What this changes for valuation
A regulatory logic, not a market one. Here, neither the rent, nor the surcharge, nor the occupation indemnity derives from the market rental value: the rent follows from the lease and the agreement, the surcharge from a scheme based on the household’s income, applied because the survey went unanswered, and the Court of Appeal modelled the indemnity on what would have been due had the lease continued, a basis the Cour de cassation does not examine. Under a commercial lease, by contrast, the indemnity of a tenant holding over is set by the rental value, without the rent cap. For an occupier with no right to stay, the indemnity compensates a loss and runs until actual departure, a point settled by another ruling, from 2023. The report therefore first identifies which basis applies.
A calculation broken down like the arguments. The tenant’s arguments divided time: before or after the ELAN Act, the years 2018 and 2019 for income. The overall order fell because the argument aimed at the surcharge alone went unanswered. A table that separates, year by year, rent, charges, surcharge and indemnity lets the court answer each argument and recompute a single item. The income cap is a matter for the court, not the valuer. Article 455 also sanctions contradictory calculations.
For a State-agreement building valued by the income approach. The date of the agreement matters: the 2010 agreement applied without a new lease, whereas, for an agreement signed by a social housing body since the ELAN Act, the new texts give sitting tenants the option described by the Court. The surcharge, which varies with each household’s income, is treated separately from the agreed rent, not as stable income.
What the valuer takes from it
- The ELAN Act is not retroactive: the 2010 agreement had produced its effects, and the surcharge could be notified afterwards.
- The regime of loss of the right to remain in the premises, specific to failing to answer the survey, does not apply to an action based on the termination clause; here, the occupation indemnity set by the Court of Appeal runs from the day after the termination.
- A modest income evidenced by tax notices calls for an answer from the court; a calculation item by item, year by year, makes that answer easier.
Further reading
The Property loss of value page describes the assignment, its timescale and its fee. The guide Producing a valuation in a French court: which format to choose? and the glossary entries indemnité d’occupation and valeur locative complement this article. See also Occupier with no right to stay: indemnity owed until departure. On the same theme: Concealed foundation works: sale annulled, use to be paid for and Avoiding property foreclosure in France: what the judge expects. The decision is available on Légifrance.
What next
A dispute over the sums owed for the occupation of a dwelling?
I quantify the market rental value of the dwelling and the occupation indemnity over the exact period, separating what follows from the market from what follows from the lease or the law. The report sets out each item separately, year by year, with the documents that support it.
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