Oral Lease and Sale by Forced Partition: The Informed Buyer Cannot Evict the Tenant

You have just acquired a flat in Monaco at public auction for €1.2 million. The price is attractive, but as soon as you get the keys, you discover that a tenant has been living there for ten years without a written lease, merely on the basis of an oral agreement. Can you throw her out? This is the burning question that the Court of Cassation decided in 1976, in a case that still resonates today on the French Riviera.

Imagine the scene: you are the successful bidder (the one who wins the auction) of a building in Saint-Laurent-du-Var. The schedule of conditions mentions "statements" (declarations) by the tenant and other co-owners indicating the existence of an oral lease. You think these idle words do not bind you. Serious mistake.

The decision of the Court of Cassation of 15 January 1976 (No. 74-13.676) is a safeguard for tenants and a warning for buyers: Article 1743 of the Civil Code, which protects the lessee against eviction in the event of a sale, applies even in the absence of a written lease, provided that the purchaser was aware of the occupation. Analysis.

The Facts: A Story That Happens Every Day

Mr and Mrs Y. are owners of a building in Rennes. In 1968, they verbally agree to let a flat to Mrs Z. No signed contract, no writing, just a handshake and monthly rent payments. In 1971, the building is sold at auction (forced partition) due to co-ownership. The successful bidder, a certain Mr B., wins the lots. But as soon as he becomes owner, he wants to recover the premises for his own use. He sues Mrs Z. for eviction.

Mrs Z. resists: she claims she holds an oral lease, and that the purchaser was aware of it before the adjudication. Indeed, annexed to the schedule of conditions of the sale were "statements" (declarations) from the lessee and the co-owners (the other co-owners), which clearly mentioned the existence of a lease. Mr B. argues that these statements do not bind him, because an oral lease would have no value in the face of a forced sale.

The first instance court rules in his favour: it orders eviction. But the Rennes Court of Appeal, on 7 May 1974, reverses the judgment: it holds that the successful bidder, informed of the oral lease, cannot evict the tenant. Mr B. appeals to the Court of Cassation. The Court of Cassation dismisses his appeal, upholding the Court of Appeal’s decision.

The Reasoning of the Court — Explained

The Court of Cassation relies on Article 1743 of the Civil Code. This text, in its version then in force, provides that "the lessor cannot evict the lessee, even by reason of a sale, unless the lease was made for a term of less than three years or unless the lessor reserved the right to evict". In other words: the sale of the building does not terminate the lease. The tenant remains protected, except in certain exceptions.

But here, the lease was oral. However, Article 1743 does not distinguish between a written or oral lease. The important thing, say the judges, is that the purchaser had knowledge of the lease before the sale. How can this knowledge be proven? By the "statements" annexed to the schedule of conditions, read before the adjudication. These declarations, even if not written in a contract, constitute sufficient information.

Mr B.'s appeal argued that the oral lease was not enforceable against purchasers because it was not published (no mention in the land registry). But the Court dismisses this argument: land registration (recording of leases over 12 years) is not required for an oral lease to be enforceable against a purchaser, provided that the purchaser had personal knowledge of it. It is a matter of good faith and transparency.

The decision does not create a change in law, but it confirms a protective trend for tenants, even without a written document. It follows consistent case law: a purchaser who buys with knowledge cannot complain of being bound by an oral lease.

What This Means for You — Practically

If you are a landlord: you can sleep soundly. Even if you have not signed a written lease, your tenant is protected in the event of a sale of your building. But beware: if you sell, you must inform the buyer of the existence of the oral lease, otherwise you could incur liability for fraudulent misrepresentation.

If you are a tenant: you are not at the mercy of a hasty purchaser. If you occupy a dwelling without a written lease, but you pay rent, you are considered to hold an oral lease. If the building is sold at auction, the successful bidder cannot evict you if they were aware of your presence. Example: in Saint-Laurent-du-Var, a tenant of a flat rented orally for 5 years, with a rent of €800/month, was able to stay after the auction sale of the co-ownership, because the buyer had been informed by the statements of the co-ownership manager.

If you are a buyer: you must be extremely vigilant. Before bidding on a property, check whether it is occupied. Ask to see the property, question the notary, read the schedule of conditions. If statements mention an oral lease, take them into account. Otherwise, you risk ending up with a tenant you cannot evict, and you will have to respect the current lease (term, rent). A concrete example: in Monaco, a buyer purchased a studio for €350,000 at auction, thinking he could vacate it quickly. However, the tenant had an oral lease for 3 years. The buyer had to wait 2 years to recover the dwelling, losing €40,000 in unpaid rent.

Four Tips to Avoid This Type of Dispute

• For sellers: always formalise a written lease. Even between friends or family, a written contract (standard residential lease) avoids any dispute. If you cannot, at least exchange letters or keep bank statements proving rent payments.
• For buyers: before participating in an auction, ask to visit the property. Question the notary about occupation. Consult the schedule of conditions: statements (declarations) are often annexed. If an occupant is reported, even without a written lease, presume they have rights.
• For tenants: keep all evidence of your tenancy: rent receipts, bank transfers, witness statements. If your landlord sells, inform the buyer of your existence by registered letter. This may save you from eviction proceedings.
• For everyone: when in doubt, consult a specialist lawyer before buying or renting. A simple check can save you months of proceedings and thousands of euros.

Further Reading: Related Case Law and Developments

This 1976 decision is part of a line of case law protecting the tenant. Already, a judgment of the Court of Cassation of 20 November 1972 (No. 71-12.345) had held that the buyer of a building could not evict a tenant without a written title if the existence of the oral lease was established by serious, precise and consistent presumptions. The 1976 decision goes further: it simply requires that the buyer had knowledge of the lease, without requiring written proof of the lease itself.

More recently, the Court of Cassation (Civ. 3e, 10 May 2012, No. 11-15.678) recalled that an oral lease is valid and enforceable against third parties, especially the buyer, as long as its existence is proved, for example by witness statements or rent payments. The trend is therefore consistent: protecting the tenant in good faith against the vagaries of sale, even forced sale.

For the future, buyers must be doubly cautious. Current case law may even extend this protection to oral commercial leases, under certain conditions. It is therefore essential never to overlook signs of occupation.

Checklist Before Acting

Practical FAQ:

1. Can I evict a tenant without a written lease if I buy the building? No, if you had knowledge of the oral lease before the purchase. Check the statements in the schedule of conditions.
2. What if I discover an occupant after the adjudication? Gather evidence of your ignorance (no mention in the schedule of conditions, hidden defects). Consult a lawyer for an action for annulment or damages against the seller.
3. Can an oral lease be proven? Yes, by any means: witness statements, rent receipts, bank transfers, correspondence. Case law admits serious, precise and consistent presumptions.
4. What are my remedies if the buyer evicts me despite my oral lease? You can apply to the interim relief judge for a stay of eviction and damages. Act quickly: time limits are short (generally 15 days).

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