Assignment of a Commercial Lease: When the Landlord’s Silence Constitutes Acceptance

Imagine: you are a shopkeeper in Aubervilliers, you buy a business with the lease, you pay your rent each month, you invest in your shop. Three years later, your landlord tells you that the assignment of the lease was not formally notified to him, and that he does not recognise you as a tenant. He demands immediate departure. An absurd scenario? Yet this is exactly what happened in the case decided by the Court of Cassation on 31 May 1983. And the solution came down: no, a landlord cannot hide behind a lack of formality when he has, in practice, accepted the situation for years.

This question, every landlord or tenant asks themselves one day: when does silence amount to acceptance? When the law requires a written act, can the conduct of the parties suffice? The answer of the Court of Cassation is a model of legal common sense: judges must draw the consequences of their own findings. If the landlord knew, if he collected the rent, if he negotiated the renewal, then he has waived the right to rely on the procedural defect. A lesson worth its weight in gold for any property professional.

In this article, I will tell you about this case, dissect the reasoning of the judges, and above all give you the keys to avoid this type of dispute – whether you are a landlord in Boulogne-Billancourt or a tenant in Paris. Ready? Let's get into the thick of it.

The facts: a story like many that happen every day

We are in the 1980s. The Y... siblings, owners of a commercial premises in Paris, grant a lease to an initial tenant. That tenant assigns his commercial lease to a couple, Mr and Mrs X..., by notarial deed. Problem: the assignment is not served on the landlords, i.e. they do not receive official notification by bailiff. For nearly three years, Mr and Mrs X... operate the business, pay the rent, and the landlords collect without complaint. Better still: they send them a notice to quit with an offer to renew the lease, and enter into negotiations to set the new rent. Everything is fine, until a disagreement arises over the price of the renewed lease. Then the landlords pull out the irrefutable argument: 'The assignment was not served on us, it is unenforceable against us. You are not our tenants, the lease is void.'

Mr and Mrs X... go to court. At first instance, the court finds in their favour: the landlords knew of the assignment, accepted the rent, negotiated the renewal, so they waived the right to rely on the lack of service. But the Court of Appeal reverses that judgment. It says: 'Admittedly, the landlords knew, admittedly they collected the rent, admittedly they offered the renewal. But the law requires service by bailiff. In the absence of that formality, the assignment is unenforceable against them.' Mr and Mrs X... appeal to the Court of Cassation.

The case thus comes before the Court of Cassation, which will decide a question of principle: can a judge find facts (knowledge, acceptance of rent, negotiations) and draw a contrary legal conclusion? The answer is no. And that is where the fault lies with the Court of Appeal.

The reasoning of the court — dissected

The Court of Cassation quashes the appeal judgment on the basis of Article 1134 of the Civil Code (old), which states that agreements must be performed in good faith. Today, this principle is restated in Article 1104 of the same code. In short: one cannot contradict oneself to the detriment of another – this is what is called estoppel in Anglo-Saxon law, or the theory of tacit waiver in French law.

The reasoning of the High Court is unassailable. It begins by noting that the Court of Appeal found four elements: 1) the landlords knew of the assignment; 2) they sent the assignees a notice to quit with an offer of renewal; 3) they accepted without reservation the rent for nearly three years; 4) they participated in negotiations on the price of the renewed lease. Then, the Court of Appeal concluded that, despite all this, the assignment was unenforceable against them for lack of service. The Court of Cassation says: you cannot find all that and not deduce that the landlords waived the right to rely on the lack of service. You must draw the legal consequences of your own findings.

In other words, tacit waiver is a legal act that is inferred from conduct. If the landlord behaves as if the assignment is valid, he cannot later go back. The trial judges must apply this logic. The judgment is therefore quashed, and the case referred to another court of appeal which, this time, must apply the rule.

This decision is not a revolution, but a confirmation of constant case law: the formality of service is not an end in itself. It protects the landlord against an assignment of which he is unaware. But if the landlord knows and acts accordingly, the formality becomes superfluous. It is an application of the principle of good faith, the cornerstone of contract law.

The arguments of the parties? Mr and Mrs X... insisted on the contradictory conduct of the landlords: how can one offer a renewal to someone one does not recognise as a tenant? The landlords, for their part, sheltered behind the letter of the law: service is mandatory, full stop. The Court of Cassation chose fairness and coherence.

What this changes for you — concretely

Are you a landlord? This decision reminds you that you cannot bury your head in the sand. If you collect rent from a new tenant without protest, if you send him notices to quit or receipts, you tacitly accept the assignment. You lose the right to challenge it later. Concrete example: in Boulogne-Billancourt, a 100 m² commercial lease can cost €30,000 in annual rent. If you accept this rent for three years without reservation, you cannot later demand the tenant's departure on the ground that the assignment was not served. You must live with it.

Are you an assignee tenant? You should know that service by bailiff remains the best protection. But if the landlord behaves as if everything is fine, you are legally protected. Keep all evidence: rent receipts, correspondence, notices received. In case of dispute, these elements will be conclusive. If you are in this situation, you must act quickly: do not let a lack of service drag on. Regularise it if possible, even belatedly.

Are you a buyer of a business? Before signing, check that the assignment of the lease has been served on the landlord. If not, ask the seller to do so. Otherwise, you risk finding yourself in the situation of Mr and Mrs X...: ultimately winning, but after years of proceedings. Better safe than sorry.

For co-owners or property professionals, this case law is a reminder that formalism is not absolute. The conduct of the parties creates rights. An estate agent advising a landlord must warn him: not reacting to an unserved assignment is acceptance.

Four tips to avoid this type of dispute

• Have the assignment served by bailiff within one month of the deed. This is the only way to be certain that the landlord is officially informed. The cost (around €150) is trivial compared to the risk of litigation.
• Landlord: as soon as you receive rent from a stranger, ask for an explanation in writing. Send a registered letter with acknowledgement of receipt to contest the assignment if it has not been served. Do not let three months pass, let alone three years.
• Keep all supporting documents: rent receipts, correspondence, notices to quit, amendments. In the event of a dispute, this is your only proof of tacit acceptance. Digitise them and file them.
• If in doubt, consult a specialist lawyer before starting proceedings. A simple 30-minute consultation (€45 with Maître Zakine) can save you years of proceedings and thousands of euros in costs.

Further reading: related case law and developments

This 1983 decision is part of a consistent line. Already in 1975, the Court of Cassation had held that a landlord who collects rent without protest after learning of the assignment is deemed to have consented to it (Civ. 3e, 18 March 1975, No. 73-14.123). More recently, in a judgment of 12 May 2021 (No. 19-24.276), the Court reaffirmed that waiver of the right to rely on a nullity can result from unequivocal acts. The trend is therefore clear: judges favour the reality of contractual relations over pure formalism.

For the future, one can expect this logic to extend to other formalities: failure to register the lease, failure to declare an extension... The message is that law is not a trap for the unwary, but an instrument of justice. If the parties behave as if an act is valid, justice will validate it.

What you absolutely must remember

FAQ:

• Is service of an assignment of lease mandatory? Yes, in principle. Without service, the assignment is unenforceable against the landlord. But if the landlord behaves as if he accepts it, he loses the right to rely on the lack of service.
• How long does it take for the landlord's silence to amount to acceptance? There is no fixed period. It all depends on the circumstances. In the judgment, three years of collecting rent without reservation was enough. One month would probably be too short.
• Can I regularise an unserved assignment? Yes, you can still have the assignment served on the landlord, even belatedly. This puts an end to the uncertainty. But if the landlord has already contested, regularisation may not be sufficient.
• What should I do if I am a landlord and discover an unserved assignment? React immediately in writing, contesting the assignment. If you collect the rent, state that it is without prejudice to your rights. Do not let the situation become established.
• Does this case law apply to residential leases? No, the regime is different. Residential leases are governed by the Law of 6 July 1989, which imposes specific formalities for assignment. But the principle of good faith may apply in some cases.

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 →