A couple buy a villa off plan in 2003 in a tourist residence, and let it under a commercial lease (bail commercial, the French statutory business lease) to the operator. The lease, annexed to the reservation contract, stipulates that the operator waives any eviction compensation. Years later the owners give notice without compensation to take back their villa. The clause is declared unwritten, an appraisal is ordered to fix the compensation, and the estate agent and the notary are ordered to indemnify the owners for 70 % of it. The notary objects: he did not draft the lease. On 17 June 2026 the Cour de cassation (the French supreme court for civil matters) rejected his appeal: the lease was annexed to the preliminary contract, the exemption from compensation was one of the buyers’ objectives, and the notary had to check its validity. The loss is a lost chance of not buying. For the investor in a managed residence, the ruling says what the property is really worth.
The facts
By a reservation contract of 2 September 2002, concluded through an estate agency, then a notarial deed of sale off plan of 16 September 2003, a couple acquire a villa in a tourist residence. On the same 2 September 2002 the owners let the villa under a commercial lease to the operator of the residence for nine years from completion; the lease contains a clause by which the tenant waives its right to eviction compensation, and it is annexed to the preliminary contract.
The owners serve notice refusing renewal without offering compensation. The tenant sues them for annulment of the notice, compensation for its dispossession and return of the premises, or alternatively payment of eviction compensation; the owners join the developer, the agency and the notary. By a judgment of 30 November 2021 a Court of Appeal declares the clause unwritten, orders an appraisal of the amount of the compensation and orders the agency and the notary jointly to indemnify the owners for 70 % of the awards. After a first quashing, the Bordeaux Court of Appeal, on 16 December 2024, rules the same way.
The decision
The first civil chamber dismissed the notary’s appeal (Cass. 1re civ., 17 June 2026, no. 25-11.807). On fault, it recalls that “the notary is bound to inform the parties and draw their attention to the scope, effects and risks of the deeds to which he lends his assistance”. The deed of sale referred to the preliminary contract, of which the commercial lease was an annex, and the deposit had been paid to the notary as escrow agent; the Court of Appeal could infer “that the notary could not be unaware that the exemption from compensation in case of non-renewal of the lease was one of the objectives pursued by the buyers, so that, although he did not himself draw up the lease, the notary, bound to inform the parties of the risks of the intended transaction, failed in his duty to advise by not checking the validity of the commercial lease”.
On the loss, had they been informed, the owners “could have chosen to withdraw from the purchase against the deposit, or to pursue their project aware of the obligation to pay eviction compensation in case of non-renewal of the lease”; the notary’s fault caused them “a loss consisting in the lost chance of withdrawing from the purchase”.
What this changes for valuation
A managed-residence lease is a commercial lease like any other. The clause by which the operator waives eviction compensation in advance is deemed unwritten, because it defeats the public-policy right to renewal. An owner who wants to take back the unit at the end of the term therefore pays the compensation, unless there is a serious and legitimate ground. Many investors in tourist, student or senior residences have discovered this after the event.
What the compensation is worth for a single unit. The operator does not have one business per villa; its business is the whole residence. Evicting one unit removes part of its operating capacity: the margin earned on that villa, reorganisation costs, possibly a loss of custom if the unit was distinctive. The appraisal ordered in 2021 had to quantify that. Depending on the case, the compensation is computed as a relocation indemnity, the business continuing elsewhere in the residence, or as a share of the value of the business if the unit was necessary to the whole. The method and the operator’s accounts, unit by unit, drive the result.
What the property is worth to the investor. A villa sold with the promise of vacant recovery at the end of the lease is not worth the same as a villa burdened with a renewable commercial lease and eviction compensation to pay. The second is valued as a let property: capitalisation of the rent, discount for occupation, eviction liability. The gap between the two values, at the date of purchase, measures what the buyer overpaid for a feature that did not exist. The site’s glossary explains indemnité d’éviction, the eviction compensation, and décote pour occupation, the discount for occupation.
The lost chance, and its base. The loss retained is not the eviction compensation itself but the lost chance of withdrawing from the purchase, the Court of Appeal having set the share guaranteed by the agency and the notary at 70 %. The lost chance is quantified from the value gap above and the sums committed, weighted by the probability that the buyer, if informed, would have withdrawn, which depends on how much the recovery objective weighed in the decision. The valuer supplies the gap and the amounts; the judge sets the probability.
Before buying in a managed residence. The ruling makes the validity of the lease a condition of the purchase’s effectiveness, which the notary must check when the buyer’s objective depends on it. A preliminary opinion of value does the same from the angle of price: it values the property as it really is, let to an operator under a commercial lease, and not as the brochure presents it.
What the valuer takes from it
- In a managed residence, the operator’s advance waiver of eviction compensation is unwritten; the owner who takes back the unit pays it.
- The compensation for one unit is computed on the operation of that unit, relocation or share of the business, with the operator’s accounts.
- The property is valued as one let under a commercial lease, with a discount for occupation and an eviction liability, not as recoverable at the end of the term.
- The lost chance of withdrawing from the purchase is quantified from the value gap and the sums committed, weighted by a probability.
- The notary must check the validity of a lease annexed to the contract when the buyer’s objective depends on it.
Further reading
The Eviction compensation page describes the assignment, its timescale and its fee. The guide My landlord refuses to renew my commercial lease and the glossary entries indemnité d’éviction and indemnité de transfert complement this article. On the same theme: Cancelling a leaseback purchase for a disappointing return and Eviction compensation for a photo shop in a shopping centre. The decision is available on Légifrance.
What next
A property in a managed residence, a commercial lease with the operator, and a notice to prepare?
I value the eviction compensation owed to the operator for your unit, the value of the property let and vacant, and the loss suffered if the scheme was not presented as it really is.
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