Assignment of Commercial Lease: Judges Cannot Control Everything

Imagine: you are the owner of commercial premises in Valenciennes. You rented an adjoining garage to your tenant, who ran a shop. One day, this tenant assigns his commercial lease to a new tenant. You refuse the assignment of the garage, considering that it is a separate lease, or even a disguised residential lease. The new tenant, for his part, makes real offers (proposal of payment) for the rents and charges, and applies to the judge to have them validated. Can the court, on this occasion, decide on the nature of the garage lease? This is the question that the Court of Cassation resolved in 1970, in a decision that remains relevant for property professionals.

This little-known decision sets an essential procedural limit: the judge hearing an application for validation of real offers can only rule on the satisfactory (sufficient) nature of these offers. Any counterclaim (parallel claim by the defendant) seeking to challenge the qualification of the lease is inadmissible in this context. Why such strictness? And concretely, what to do if you are faced with a similar situation, in Denain or elsewhere? Analysis.

The Facts: A Story That Happens Every Day

In 1965, a certain Marcellin grants a lease of commercial premises and a garage. By a single deed, he assigns both the commercial lease and the garage lease to a new tenant. But quickly, a disagreement arises: Marcellin considers that the assignment of the garage lease is irregular, because it was not accepted by him. He argues that the garage is not part of the commercial lease and that, consequently, the assignment without his consent is void.

The assignee, for his part, makes real offers (formal proposal to pay rents and charges) to Marcellin, who refuses them. The assignee then applies to the court to validate these offers. In this procedure, Marcellin makes a counterclaim: he asks the judge to find that the assignment of the garage lease is irregular, and therefore that the garage is not subject to the commercial lease regime (law of 30 June 1926).

The Douai Court of Appeal, seised, must decide: can it examine the nature of the garage lease? Marcellin's appeal in cassation challenges the decision which, according to him, should have verified whether the assignment of the garage was regular. The Court of Cassation, by a judgment of 27 November 1970, quashes the appeal judgment: the judges cannot, in the context of an application for validation of real offers, rule on the qualification of the lease raised by way of counterclaim. Only the question of whether the offers are satisfactory (i.e., sufficient to cover the rents and charges due) can be examined.

The Reasoning of the Court — Analysed

The Court of Cassation relies on a fundamental procedural principle: the object of the dispute is determined by the claims of the parties. Here, the assignee's main claim was limited to validation of the real offers. The judge cannot extend his examination to matters unrelated to this claim, such as the legal nature of the lease (commercial or not). Article 4 of the Code of Civil Procedure (old) provides that the object of the dispute is determined by the respective claims of the parties. However, Marcellin's counterclaim, seeking recognition of the irregularity of the assignment of the garage, did not belong to the same instance.

The trial judges (Court of Appeal) should have limited themselves to verifying whether the assignee's offers were complete and sincere: amount of rents, charges, accessories. The question of whether the garage was a commercial lease or a lease under ordinary law was a separate dispute, which had to be brought before the competent court by a separate action.

The Court of Cassation thus specifies that the commercial nature of the rental of the garages is unrelated to the offer and cannot be submitted to the judges by way of a counterclaim in the context of this instance. In short, one cannot mix genres: a procedure for validation of real offers is a quick and limited procedure, intended to allow the creditor to obtain payment without going through a long trial. It is not the place to decide complex substantive issues.

This decision is a confirmation of previous case law: the procedure for real offers is a special procedure, which cannot be diverted from its purpose. It is neither an evolution nor a reversal, but a reminder of the rules of jurisdiction and object of the dispute.

What This Changes for You — Concretely

For a landlord owner in Denain, this decision means that if you contest an assignment of lease, you cannot do so in the context of a procedure for validation of real offers initiated by the assignee. You must act separately, by an action challenging the assignment before the judicial court. Imagine a monthly rent of €1,200 for commercial premises in Valenciennes. The assignee makes you a real offer of €14,400 for one year of unpaid rents. You consider that the assignment is void because the lease of the adjoining garage (rented at €200/month) was not regularly assigned. You cannot, in the same procedure, ask the judge to declare the assignment void. You must first have your offers validated or contested, then, if you wish, bring a separate action.

For a tenant assigning his lease, this decision is rather favourable: it prevents the landlord from blocking the validation procedure by raising peripheral questions. The assignee can thus quickly obtain payment of rents, without waiting for a debate on the qualification of the lease to be decided.

For a buyer of a business, be vigilant: if you make real offers to regularise a situation, ensure that the landlord does not contest the assignment. In that case, simultaneously bring an action for validation of the assignment before the competent court.

Finally, for a co-owner, this decision has limited scope, but it illustrates the importance of not mixing procedures.

Four Tips to Avoid This Type of Dispute

• Draft a clear and detailed assignment deed: expressly mention all rented property (commercial premises, garage, outbuildings) and have the assignment accepted by the landlord in writing. A well-drafted notarial or private deed avoids subsequent disputes.
• Have the landlord sign a lease amendment: upon assignment, ask the landlord to sign a document recognising the regularity of the assignment and the existence of the commercial lease for all premises.
• In case of refusal by the landlord, apply to the competent court: do not try to settle the matter in a real offers procedure. Bring an action for validation of the assignment before the judicial court (or the commercial court if the lease is mixed).
• Keep all proof of payment and correspondence: in case of dispute, written exchanges (registered letters, emails) and rent receipts are your best allies to demonstrate the reality of the assignment and the offers.

Further Analysis: Related Case Law and Developments

The Court of Cassation has reaffirmed this principle several times. For example, in a judgment of 19 February 1973 (No. 71-13.652), it held that the interim relief judge, seised of an application for an interim payment, cannot decide a serious dispute on the nature of the lease. More recently, in a judgment of 10 July 2013 (No. 12-21.045), it specified that a counterclaim for termination of the lease is inadmissible in the context of an action for validation of real offers. The trend is therefore constant: special procedures (real offers, interim relief) have a limited purpose, and substantive issues must be dealt with in the context of a main action.

This procedural strictness is justified by legal certainty: it prevents quick procedures from being diverted into endless substantive debates. For the future, expect courts to continue to apply this rule strictly, especially in the context of commercial leases where financial stakes are high.

In Practice: What to Do

FAQ:

1. Can I contest an assignment of lease in the context of a real offers procedure? No, you must bring a separate action before the judicial court.
2. What to do if I receive real offers from an assignee? Check their satisfactory nature (amount, periods). If you contest the assignment, do not raise this issue in the response to the offers: bring a separate action.
3. What is the time limit to contest an assignment of lease? In principle, 5 years from the assignment, but act quickly to avoid prescription or tacit confirmation.
4. What is the cost of an action for validation of real offers? Court fees are low (a few tens of euros), but lawyer's fees vary (expect €500 to €2,000 depending on complexity).
5. Can I claim damages from the assignee? Yes, but in a separate action, not in the real offers procedure.

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