A landlord served a notice to quit (congé) with an offer of renewal. Five years later it withdrew the offer, because the tenant was carrying on activities in the premises that the lease did not authorise; the tenant argued that the action was time-barred, that is, that the two-year period to act had expired, running from the notice. In a reported decision of 9 November 2017, the Third Civil Chamber of the Cour de cassation (the French supreme court for civil and commercial matters) approved the Court of Appeal for holding that time runs from the day the landlord learned of the breach. For the valuer instructed on eviction compensation (indemnité d’éviction, the sum owed to a commercial tenant whose lease is not renewed), the date of that discovery matters as much as the date of the notice.
The facts
On 1 February 1999 a landlord company granted a French commercial lease (bail commercial) to a tenant company. On 14 February 2008 the landlord served on it a notice with an offer of renewal and eviction compensation, in the words of the ruling. On 4 January 2013 it gave the tenant formal notice to operate the premises in accordance with the use provided for in the lease. On 18 March 2013 it withdrew its offer on a serious and legitimate ground (motif grave et légitime) consisting in the breach of that use. On 19 April 2013 it sued the tenant for a declaration that the refusal of renewal was valid.
The Toulouse Court of Appeal, by a ruling of 17 May 2016, granted the claim. It found that the landlord had discovered on 7 March 2012 that activities not authorised by the lease were being carried on, and deduced that the action was not time-barred.
The tenant appealed. In its view, the limitation period of article L. 145-60 of the French Commercial Code runs, for this action, from service of the notice; failing that, the relevant date should be the one on which a prudent and diligent landlord ought to have discovered the ground, not the date of actual discovery.
The ruling does not do the arithmetic, but it follows from the statute: the period under article L. 145-60 being two years, it would have expired in February 2010 had it run from the notice; counted from the discovery of 7 March 2012, it ran until March 2014, which puts both the withdrawal and the summons in time.
The decision
The Cour de cassation dismissed the appeal (Cass. 3e civ., 9 November 2017, appeal no. 16-23.120, reported). Its answer fits in one sentence: “having held, rightly, that the limitation period for the action to withdraw the offer of renewal of the lease on serious and legitimate grounds runs from the day the landlord learned of the breach on which its refusal is based, and found, within its own assessment, that the landlord had discovered the carrying on of activities not authorised by the lease on 7 March 2012, the Court of Appeal correctly deduced that the action was not time-barred” (translated from the French).
The Court adopted a rule of law (“rightly”): time runs from the landlord’s knowledge of the breach, not from service of the notice. It left the date of discovery to the assessment of the judges who examined the facts. It kept to the day on which the landlord “learned of” the breach and dismissed the appeal without addressing specifically the limb of the ground of appeal that proposed the date on which a prudent and diligent landlord ought to have discovered it: an implicit rejection, not an express ruling on that test. Légifrance’s headnotes link the solution to articles L. 145-57 and L. 145-60 of the Commercial Code and article 2225 of the Civil Code.
The ruling decides only the starting point of the limitation period; the seriousness of the ground was not disputed in the appeal, and the Court did not rule on it. Two other 2017 rulings, discussed separately, deal with other points of eviction compensation: the loss of the right to remain in the premises and the denial of statutory protection after the landlord exercises its option (droit d’option).
What this changes for valuation
A renewal offer can be withdrawn long after the notice. A refusal of renewal based on a serious and legitimate ground releases the landlord from any compensation, subject to the conditions of article L. 145-17 of the Commercial Code (prior formal notice for a breach of the lease obligations). The ruling proceeds on the basis that a landlord which offered renewal may withdraw its offer on such a ground discovered later, and holds that time for its action runs only from the discovery: here, more than five years after the notice. The outcome of that action governs the very existence of the compensation the valuer quantifies.
The chronology goes into the report. The valuer records the relevant dates: notice and effective date, formal notices, any withdrawal, summonses. The valuer does not rule on limitation or on the seriousness of the ground, which are for the judge, but flags any dispute over the principle of the compensation being quantified. The report therefore mentions the pending proceedings and states that its figures apply if the refusal is not upheld. The valuer also reads the terms of the offer itself, whose content may make it a refusal (see the modified renewal offer).
The activity carried on is observed on site. The breach consisted of activities not authorised by the lease. During the inspection, the valuer describes the activity actually carried on and compares it with the use clause, just as the valuer checks the trade register entry, which must cover the activity carried on in the premises (see registration in the trade register). That observation does not characterise the breach; it gives the judge a dated fact.
Two actions, two starting points. The two-year period of article L. 145-60 does not start on the same date for every action. For a tenant claiming eviction compensation after a notice refusing renewal, it runs from the effective date of the notice, as the Court held on 12 February 2026 (see the tenant has two years to act). For a landlord withdrawing its renewal offer for serious cause, it runs from discovery of the breach. The two solutions concern different actions and do not contradict each other.
What the valuer takes from it
- The limitation period for the landlord’s action to withdraw the renewal offer on serious and legitimate grounds runs from the day it learned of the breach, not from the date of the notice.
- The date of discovery is a question of fact for the judges who examine the case; it is established by dated documents.
- A renewal offer can be withdrawn years after the notice: the valuer notes any withdrawal and any alleged breach before quantifying.
- The report describes the activity carried on in the premises and compares it with the use clause, without characterising the seriousness of the ground.
- After a notice refusing renewal, the tenant’s time to claim eviction compensation, by contrast, runs from the effective date of the notice (Cass. 3e civ., 12 February 2026).
Further reading
The Eviction compensation page describes the assignment, its method and its fee. The guide My landlord refuses to renew my commercial lease and the glossary entries indemnité d’éviction, bail commercial and fonds de commerce complement this article. On the two other 2017 rulings: Right to remain lost: a harm separate from eviction compensation and Denial of lease status after option: until compensation is set. On the same theme: Eviction compensation in France: the tenant has two years to act and Modified renewal offer: it is a refusal, compensation is due. The decision is available on Légifrance.
What next
A renewal offer withdrawn for serious cause, and eviction compensation called into question?
I establish the eviction compensation and set out in the report the chronology of the file and the activity observed on the premises, compared with the lease's use clause. The figures show the tenant, the landlord or the court what is at stake.
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