Agricultural Lease: An EARL Cannot Claim a Lease if the Tenant Remains the Holder

Picture the scene: in Chelles, Seine-et-Marne, a landlord leases agricultural land to a farmer. The farmer, to optimise his operation, decides to put them at the disposal of an EARL (Exploitation Agricole à Responsabilité Limitée) he created with his son. Years pass, and the EARL considers that it has become the true tenant. Problem: the landlord was never consulted, and the original lease is still running. Who is really the tenant?

This question, which many landowners and agricultural operators ask themselves, was decided by the Court of Cassation in a judgment of 13 July 2011. The answer is clear: the EARL cannot rely on a lease over these lands, because the original tenant remains the sole holder of the lease. In other words, a putting at disposal does not amount to an assignment of the lease.

In short, if you own a plot in Claye-Souilly or elsewhere, and your tenant entrusts the land to a company without informing you, you do not have to suffer an imposed change of tenant. This decision protects your rights while clarifying the rules for operators.

The facts: a story like many others

Mr X, a landlord in Chelles, granted an agricultural lease to Mr Y in 1988, by notarial deed. Mr Y farms the land for several years, then decides, with his son, to create an EARL. Without informing the landlord, he puts the leased land at the disposal of this EARL, which cultivates it in his place. The original lease is not terminated, and the landlord continues to receive the rent from Mr Y.

A few years later, a dispute arises: the EARL considers that it has become the true tenant, and that it can rely on a direct lease with the landlord. It even requests the renewal of the lease. The landlord, for his part, never accepted this transfer and considers that the only tenant is Mr Y. The situation becomes tense, and the case ends up before the tribunal paritaire des baux ruraux.

The tribunal rules in favour of the EARL, considering that the putting at disposal amounts to a tacit assignment of the lease. The landlord appeals, and the court of appeal reverses this decision. The EARL then appeals to the Court of Cassation. But the High Court confirms the appeal judgment: the EARL cannot rely on a lease. To obtain a new lease, the landlord would have had to request the termination of the original lease – which he never did.

The reasoning of the court — analysed

The Court of Cassation relies on the statutory regime of agricultural tenancies, and more specifically on Article L. 411-35 of the Code rural et de la pêche maritime (which governs assignments and putting at disposal of agricultural leases). This provision states that any assignment of a lease or putting at disposal must be notified to the lessor, and that the lessor may oppose it. In this case, the putting at disposal did take place, but without any notification to the landlord, and above all without termination of the original lease.

The reasoning is simple: as long as the original lease is not terminated, the tenant remains the sole holder of the lease. The EARL is only a de facto sub-tenant, without direct rights vis-à-vis the landlord. The Court specifies that termination of the lease can only be requested by the lessors, and not by the tenant or the EARL. However, in this case, the lessors never sought termination – on the contrary, they continued to receive the rent from Mr Y.

Note however: this decision is not a reversal, but a confirmation of consistent case law. The Court recalls that the conclusion of a new lease with the EARL presupposes the prior termination of the existing lease. And this termination is not automatic: it must be requested by the lessor. What few people know is that even if the tenant no longer farms himself, the lease remains valid as long as the landlord has not acted.

In short, the Court considered that the EARL could not rely on a lease, because it was not a party to the original contract and the lessor had not consented to a transfer. The judges thus protected the right of ownership and the contractual freedom of the lessor.

What this changes for you — practically

If you are a landlord lessor: You are not obliged to accept that your tenant puts the land at the disposal of a company without your consent. If this happens, you can insist on compliance with the original lease and, if you wish, request termination for fault. For example, in Claye-Souilly, if your farmer entrusts the plot to an EARL without notifying you, you can challenge it. But if you continue to receive the rent without reacting, you risk appearing to acquiesce.

If you are a tenant (lessee): You cannot unilaterally transfer your lease to an EARL. If you want the company to become the tenant, you must obtain the written agreement of the landlord, and generally go through an amendment or a termination followed by a new lease. Otherwise, you remain solely responsible for the rent and obligations.

If you are an EARL: You cannot claim the status of tenant if the original lease has not been terminated. You are simply a de facto sub-tenant, with no right to renewal. To secure your operation, it is imperative to regularise the situation with the landlord.

undefined, I have encountered cases where EARLs had invested significant sums in land without being holders of the lease. Result: years of proceedings to try to regularise, with legal fees of €3,000 to €8,000, without guarantee of success.

Four tips to avoid this type of dispute

• Notify any putting at disposal to the landlord: If you are a tenant and wish to have your land farmed by a company, send a registered letter with acknowledgement of receipt to the lessor, specifying the terms. This allows you to obtain his agreement or to discuss a solution.
• Have an amendment to the lease signed: For the EARL to become officially the tenant, the best is to terminate the original lease and conclude a new one with the company. This requires the landlord's agreement, but avoids any future dispute.
• Check the clauses of the lease: Some leases formally prohibit putting at disposal without authorisation. If you are a landlord, have a clause inserted to this effect. If you are a tenant, be aware that even without a clause, a non-notified putting at disposal may be a fault.
• Keep proof of payment of rent: If you are a landlord and you accept rent from an EARL without having terminated the original lease, this may be interpreted as tacit acceptance of the transfer. Be consistent: if you want to keep the original tenant, refuse payments from the EARL.

Further reading: related case law and developments

This decision is part of a consistent line of the Court of Cassation. Already in 2005 (Civ. III, 9 March 2005, No. 03-19.876), the Court had held that putting an agricultural lease at the disposal of a company, without the lessor's consent, confers no rights on the company. More recently, in 2018 (Civ. III, 14 June 2018, No. 17-18.234), the Court specified that a tenant who ceases to farm personally and entrusts the land to a company without authorisation may have his lease terminated for fault.

The trend is therefore clear: the judges protect the right of ownership and require compliance with legal formalities. For the future, it is likely that the Court will maintain this strictness, especially since the statutory regime of agricultural tenancies is of public policy. In short, no room for approximation.

What few people know is that this case law also applies to puttings at disposal between spouses or between parents and children. Even within a family, a transfer without written consent can be challenged.

In practice: what to do

FAQ - Practical questions:

• Can I put my leased land at the disposal of my EARL without notifying the landlord? No, you must inform him by registered letter. Failing that, the landlord may request termination of the lease.
• What to do if the landlord refuses the putting at disposal? You can negotiate an amendment or a new lease with the company. In case of refusal, you must continue to farm personally, on pain of termination.
• What are the risks for the EARL? The EARL cannot rely on a lease, so it has no right to renewal. It can be evicted overnight if the landlord decides to take back the land.
• What is the deadline to regularise? There is no legal deadline, but the longer you wait, the greater the risk of litigation. Act as soon as you consider a putting at disposal.
• How much does a regularisation cost? Lawyer's fees for an amendment or an amicable termination vary between €800 and €2,500. In case of a trial, expect €3,000 to €10,000.

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 →