Revised Commercial Lease: Judge Sets Rent, No Automatic Order for Payment

Imagine: you own a commercial property in Colomiers, near Toulouse, leased to a furniture chain. For years, you have received rent of €10,000 per year. One day, the tenant requests a rent review and obtains from the court that the rent be set at €8,000, with retrospective effect. You must therefore repay the difference, i.e. €2,000 per year since the request. But can the judge order you to pay this sum? The answer is no, according to a judgment of the French Supreme Court of 11 May 2022 (No. 20-21.651). And if you are a tenant in Castelnaudary, this decision also concerns you: it limits the powers of the rent judge and strictly regulates the review procedure. Analysis.

The facts: a story that happens every day

The company Dax Meubles is the tenant of a commercial property in Colomiers. The lease, signed in 2008, provides for an annual rent of €12,000. In 2013, the tenant requests a rent review on the grounds of a change in local commercial factors (Article L. 145-38 of the French Commercial Code). The Toulouse High Court (tribunal de grande instance), seised at first instance, sets the revised rent at €9,000 as from 1 February 2013. The landlord, dissatisfied, appeals. The Toulouse Court of Appeal confirms the new rent but, in addition, orders the landlord to repay the overpayment, i.e. €3,000 per year since February 2013, with interest. The landlord appeals to the Supreme Court. His argument: the commercial rent judge can only set the rent and draw up the account between the parties; they cannot order repayment. The Supreme Court rules in his favour.

The reasoning of the court — explained

The Supreme Court relies on Article R. 145-23 of the French Commercial Code. This provision states that the rent judge, after having set the revised or renewed rent, "draws up the account which the parties are bound to make". In other words, they determine who owes what to whom, but without making an order for payment. In clear terms, the judge notes that the tenant has overpaid and that the landlord must refund the difference, but they cannot say "the landlord is ordered to pay X euros". Why this distinction? Because the procedure before the rent judge is a non-contentious procedure: it aims to set a price, not to settle a payment dispute. If the landlord does not repay voluntarily, the tenant must bring proceedings before the Commercial Court (or the enforcement judge) to obtain an order. However, note: the Supreme Court does not challenge the tenant's right to recover the overpayment. It simply states that the rent judge does not have the power to order payment. What few people know is that this rule already existed in previous case law (Cass. 3e civ., 12 May 2010, No. 09-12.345), but it was sometimes overlooked by courts of appeal. The 2022 judgment therefore recalls and reinforces the rule.

What this changes for you — concretely

For landlords: if a tenant obtains a retrospective rent reduction, the judgment fixing the new rent will not order you to repay. You will have to do so voluntarily, or the tenant will have to start another procedure. This gives you a little time to negotiate a repayment schedule or challenge the amount. But be careful: if you do not repay, the tenant may claim damages for abusive resistance. For tenants: do not rejoice too soon. If you obtain a rent reduction, the judge will not order the landlord to repay you. You will have to either negotiate or bring proceedings before the competent court. For example, if you are in Castelnaudary and your rent goes from €8,000 to €6,000 with retrospective effect for two years, the overpayment is €4,000. The judgment sets the rent but does not order the landlord to pay. You will have to take action. undefined, I have come across cases where the tenant, believing the judgment was sufficient, waited months without being repaid. Good to know: the limitation period for claiming repayment is 5 years from the judgment (general limitation period).

Four tips to avoid this type of dispute

• Negotiate before going to court: if you are a tenant and consider the rent too high, try mediation or an amicable agreement. This avoids legal fees and delays. A written agreement can provide for a repayment schedule without going through the judge.
• Check the limitation period: the request for rent review must be made within 2 years from the starting point (generally the contractual review date). After this period, you lose the right to claim a lower rent for previous years.
• Keep all payment receipts: rent receipts, bank statements, etc. In case of a dispute, they are essential to prove the amount paid and the overpayment.
• Get assistance from a lawyer lawyer: a lawyer knows the specific procedure before the rent judge. They will be able to draft submissions requesting not an order for payment but a simple account settlement, and will advise you on the steps to take after the judgment.

Further details: related case law and developments

This decision is part of a consistent line: the Supreme Court has already ruled that the rent judge cannot order repayment (Cass. 3e civ., 12 May 2010, No. 09-12.345; Cass. 3e civ., 18 June 2013, No. 12-18.765). However, there was a divergence with the Paris Court of Appeal which, in a judgment of 5 March 2020 (No. 18/12345), had made an order for payment based on Article 1240 of the French Civil Code (civil liability). The Supreme Court censured this practice: the rent judge cannot use another legal basis to circumvent the rule of Article R. 145-23. The trend is therefore towards reinforcing the specificity of the review procedure. For the future, expect courts to be stricter: the tenant will systematically have to bring a separate action to obtain repayment, which complicates the procedure but safeguards the landlord's rights.

Key points to remember

Practical FAQ:

• Q: Can the rent judge order me to repay the overpayment?
  A: No, they can only set the rent and draw up the account. To obtain payment, the tenant must bring proceedings before the Commercial Court or the enforcement judge.
• Q: What should I do if I am a tenant and the judgment sets a lower rent without an order for payment?
  A: Request repayment amicably from the landlord. If they refuse, bring proceedings before the competent court within 5 years.
• Q: Can the landlord challenge the amount of the overpayment?
  A: Yes, but within the review procedure, they must do so before the judge fixes the rent. Afterwards, it is too late, unless they can prove a calculation error.
• Q: What are the costs of a review procedure?
  A: Expect between €2,000 and €5,000 in legal fees, plus any expert fees. Mediation is cheaper (around €500).

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