Prescription in residential leases: the 1989 Act excludes consumer law

Picture the scene: in Lunéville, a landlord receives a letter from his tenant announcing that he will no longer pay his rent. He waits, hoping for a return to reason. Months pass. When he finally takes the matter to court, the tenant raises a preliminary objection: 'Too late, you are time-barred!' The landlord is devastated. How long does he actually have to act? Three years? Two years? The question has divided the courts for years.

The Court of Cassation ruled on 26 January 2017 in a series of four judgments, including No. 15-27.688. It states a simple principle: residential leases governed by Act No. 89-462 of 6 July 1989 are subject to specific rules which exclude the application of consumer law. Thus, the limitation period for an action to recover unpaid rent and tenant repairs is three years, in accordance with Article 7-1 of that Act, and not two years as provided by the Consumer Code.

This decision, which went relatively unnoticed, nevertheless has major consequences for thousands of landlords and tenants. It puts an end to legal uncertainty and clarifies the time limit within which a landlord must act. But what exactly should be remembered? And above all, how should it be applied in practice, whether you are a landlord in Dombasle-sur-Meurthe or a tenant in Nancy?

The facts: a story that happens every day

The case decided by the Court of Cassation on 26 January 2017 concerns a residential lease concluded between Seminor, a social landlord, and a tenant. The dwelling, located within the jurisdiction of Nancy, was subject to the Act of 6 July 1989. The tenant stopped paying rent from July 2011. On 15 January 2015, almost three and a half years later, Seminor summoned the tenant for payment of arrears before the tribunal d'instance of Nancy.

The tenant then raised a procedural point: in his view, the landlord's action was time-barred. He relied on Article L. 218-2 of the Consumer Code, which sets a two-year limitation period for actions for payment of rent. If this period were applicable, the 2015 summons would indeed be late for the unpaid rents of 2011.

The tribunal d'instance upheld the tenant's argument, declaring the action time-barred. Seminor appealed to the Court of Cassation. The question put to the Court was clear: which limitation period applies to actions for recovery of rent and tenant repairs under residential leases governed by the 1989 Act? The cour d'appel de renvoi and, ultimately, the Court of Cassation had to resolve this conflict of laws.

The court's reasoning — dissected

The Court of Cassation quashed the judgment of the cour d'appel. It held that residential leases governed by the Act of 6 July 1989 constitute a special and complete regime, which excludes the application of general consumer law. Consequently, Article 7-1 of that Act, which provides for a three-year limitation period for all actions arising from a lease, is solely applicable.

The reasoning is as follows: Article 7-1 of the 1989 Act provides that 'all actions arising from a lease contract are time-barred after three years from the date of the event giving rise to the action'. This text is special because it applies exclusively to residential leases. In contrast, Article L. 218-2 of the Consumer Code is general, applying to all services, of which letting is a variety. Under French law, the rule 'specialia generalibus derogant' (special rules derogate from general rules) requires that priority be given to the 1989 Act.

The Court also specifies that the status of social landlord does not change this: even though Seminor was subject to social housing legislation, the lease contract remains governed by the 1989 Act. Thus, the three-year period runs from each unpaid instalment (for rent) or from the event giving rise to the action (for repairs).

This decision is a confirmation of previous case law, but it comes in a context where some lower courts continued to apply the two-year limitation period. Henceforth, the Court of Cassation puts an end to these discrepancies.

What this means for you — in practice

For the landlord: you have three years to take action to recover unpaid rent, running from the date each rent is due. For example, if a tenant does not pay the rent for January 2024, you have until January 2027 to summon him to court. Note: the period runs separately for each instalment. If you wait too long, you risk losing the oldest rents. In Dombasle-sur-Meurthe, a landlord who has allowed 18 months of arrears to accumulate will still have two and a half years to act for the first six months, but will have to hurry for the last ones.

For the tenant: you can no longer invoke the two-year limitation period to escape your debt. If you have stopped paying for more than two years but less than three, the landlord can still claim the amounts due. However, after three years, the earlier rents are definitively time-barred. This protects you from overly old claims.

For property professionals (property managers, syndics): you must ensure that legal actions are initiated within the three-year period. A written reminder or a formal notice does not interrupt the limitation period (unless followed by a summons). Only a procedural act (summons, application for a payment order) or a written acknowledgment of debt by the tenant can interrupt the period.

This decision also affects tenant repairs: if the tenant has caused damage, the landlord has three years from the return of the premises (or from knowledge of the damage) to act.

Four tips to avoid this type of dispute

• Note the date of each non-payment and initiate proceedings within 2 years. Do not wait until the last moment. As soon as the first rent is unpaid, send a formal notice by registered post. If no payment is made within 15 days, consult a lawyer. Even though you have three years, the sooner you act, the better your chances of recovering the sums and preventing the debt from increasing.
• Have a detailed inventory of fixtures signed at the start and end of the tenancy. For tenant repairs, proof is essential. A precise inventory of fixtures, with photos, will allow you to demonstrate the extent of the damage. Without it, the judge may consider that the damage pre-existed.
• Obtain a written acknowledgment of debt in case of arrears. If your tenant acknowledges in writing that he owes rent (a simple email or signed letter), this interrupts the limitation period. A new three-year period starts from that acknowledgment. This is a simple and inexpensive way to secure your claim.
• In case of dispute, do not rely on friendly reminders to interrupt the limitation period. Only a bailiff's act (summons) or an acknowledgment of debt has this effect. A simple registered letter is not enough. If you are approaching the end of the three-year period, seize the court without delay.

Further reading: related case law and developments

This decision is part of a series of four judgments delivered on the same day (appeals No. 15-27.580, 15-27.688, 15-25.791 and 16-10.389), all in the same vein. The Court of Cassation thus wanted to put an end to the hesitations of lower courts, which sometimes applied the two-year limitation period of the Consumer Code, particularly in disputes with social landlords.

Before 2017, some courts considered that a residential lease was a consumer contract because the tenant is a consumer. Consequently, the two-year limitation period provided for in Article L. 218-2 of the Consumer Code (formerly Article L. 137-2) applied. The Court of Cassation rejected this analysis in 2014 (Civ. 3e, 19 November 2014, No. 13-24.105), but some cours d'appel continued to resist. The 2017 decisions are therefore a solemn confirmation.

This case law is now settled. It has since been reaffirmed, notably in a decision of 6 December 2018 (No. 17-26.294). The trend is clear: the legislature intended a specific regime for residential leases, and the courts must apply it exclusively. In future, it is unlikely that the Court of Cassation will reverse this position, unless the legislature amends the law.

Key points to remember

Here is what to remember, in Q&A form:

What is the limitation period for an action for payment of unpaid rent? Three years from each unpaid instalment (Article 7-1 of the Act of 6 July 1989).

Can I still rely on the two-year limitation period of the Consumer Code? No, since the 2017 decisions, this limitation period does not apply to residential leases governed by the 1989 Act. Courts systematically reject it.

What if I have already lost a case due to the two-year limitation period? If your case was decided before 2017 and you did not appeal to the Court of Cassation, the decision is final. However, if an appeal is pending, you can rely on this case law.

How can I interrupt the limitation period? By a court summons, an application for a payment order, or a written acknowledgment of debt by the tenant. Simple reminders are not sufficient.

Does the limitation period also apply to tenant repairs? Yes, the period is three years from the return of the premises (or from discovery of the damage).

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →