Notice Given After Expiry of Commercial Lease: Tenant Retains Right to Renewal

Imagine the scene: you are the owner of commercial premises in Aytré, let for years to a café-restaurant. The lease expires on 1 January. On 30 September, you give notice (the act by which the landlord notifies the tenant of the intention not to renew the lease) for 30 March, i.e. three months after the expiry date. The tenant, surprised, demands renewal. Does the tenant still have that right? The answer is not obvious.

This question, crucial for thousands of commercial leases, was decided by the Court of Cassation in 1990. The stakes are immense: if the tenant loses the right to renewal, the tenant may be forced to leave, losing the business and its goodwill. Conversely, the landlord may want to recover the premises to operate them himself or let them at a higher rent.

In a judgment of 27 November 1990, the high court issued a decision that is now authoritative: the tenant retains the ability to obtain renewal of the lease, even if the notice was given for a date after the contractual expiry. Analysis of this decision and its practical consequences, particularly for owners and tenants in the La Rochelle area.

The Facts: A Story That Happens Every Day

The civil real estate company ... (which we will call SCI) owns commercial premises in Paris. It leases them to the company Jortex, which operates a business there. The lease, concluded for a term of nine years, is due to expire on 1 January 1984. In accordance with the legislation on commercial leases, the landlord must give notice at least six months before the expiry date if it wishes not to renew. However, on 30 September 1983 — three months before the term — the SCI gives notice for 30 March 1984. Problem: the notice is for a departure date three months after the contractual expiry.

The tenant, Jortex, does not accept this. On 14 February 1984, it initiates proceedings to obtain renewal of its lease. The landlord retorts that the notice terminated the lease and that the tenant can no longer demand renewal, since renewal is only possible in the absence of notice. The Paris Court of Appeal, in a judgment of 11 July 1989, rules in favour of the SCI: it holds that the tenant could only make its request if there was no notice. However, a notice had been given, even for a later date.

But Jortex does not give up. It appeals to the Court of Cassation. The case comes before the Third Civil Chamber of the Court of Cassation, which must decide a question of principle: can a notice given for a date after the expiry of the lease prevent the tenant from exercising the right to demand renewal?

The Reasoning of the Court — Analysed

The Court of Cassation quashes the appeal judgment. Its reasoning is simple but powerful: it relies on Article 6 of the Decree of 30 September 1953 (now codified in Articles L.145-9 et seq. of the Commercial Code). This text provides that the commercial tenant has a right to renewal of the lease, unless the landlord justifies a serious and legitimate reason for refusing renewal. The notice is the act by which the landlord manifests its intention not to renew. But to be valid, the notice must be given in specific forms and within specific time limits.

What did the Court hold? It observes that the notice given on 30 September 1983 set the effective date as 30 March 1984, i.e. after the expiry of the lease (1 January 1984). However, the 1953 Decree requires that the notice be given for the expiry date of the lease. By setting a later date, the landlord did not comply with the legal formalities. Consequently, this irregular notice cannot deprive the tenant of the right to demand renewal. The Court specifies that the tenant retains this ability, even after receiving such a notice.

The lower courts had made an error: they considered that the mere fact that a notice exists — even an irregular one — prevented the tenant from demanding renewal. The Court of Cassation corrects this overly strict interpretation. It affirms that the right to renewal is a fundamental right of the commercial tenant, which cannot be nullified by a non-compliant notice. In other words, the landlord cannot, by a calendar manoeuvre, trap the tenant and cause the loss of the right to renewal.

This decision is part of a line of case law protective of the commercial tenant. It confirms that the formalities of the notice must be strictly observed. A simple error in the date can save the tenant's right. But be careful: this does not mean that the tenant always wins. The tenant must act quickly to demand renewal, as Jortex did in February 1984.

What This Changes for You — Practically

For landlord owners: you must be extremely vigilant about the date of your notice. If you give notice for a date after the expiry of the lease, the tenant will still be able to demand renewal. Example: you own premises in Lagord, the lease expires on 31 December 2024. If you give notice for 31 March 2025, the tenant can demand a new lease. You will then have to justify a serious reason to refuse (for example, repossession for occupation or non-performance of tenant obligations). Otherwise, renewal will be granted, and you will remain bound for nine years.

For tenants: this decision is a lifeline. If you receive a notice with a shifted date, do not panic. You still have the right to demand renewal. But be careful: you must act within the legal time limits. The request for renewal must be made within two years following the expiry date of the lease (Article L.145-10 of the Commercial Code). After this period, you lose your right. In the Jortex case, the tenant reacted in less than two months. A reflex to have.

For purchasers of a business: always check the regularity of the notice. If the seller has received an irregular notice, this may affect the value of the business. A tenant who retains the right to renewal has a stronger business. Conversely, a non-renewed lease may reduce the sale price. In Aytré, where the market for local shops is active, this case law can make the difference between a successful sale and litigation.

Finally, for co-owners: if the premises are let by the co-ownership, the syndic must be particularly attentive to the dates of the notice. An error could engage the liability of the co-ownership. I recently saw a case in La Rochelle where a poorly drafted notice cost a co-ownership €20,000 in legal fees.

Four Tips to Avoid This Type of Dispute

• Check the expiry date of the lease as soon as it is signed: whether you are landlord or tenant, note the exact end date of the lease. Use an electronic calendar with reminders 12 months, 6 months and 3 months before the expiry. Do not rely on your memory.
• Have your notice drafted by a professional: a notice must mention the exact expiry date, the reasons if renewal is refused, and be served by a bailiff (Article L.145-9 of the Commercial Code). An error of date, even by one day, can render it irregular. Invest €200-300 in a lawyer to avoid much greater losses.
• React immediately if you receive an irregular notice: as a tenant, do not remain passive. Consult a lawyer as soon as you receive the notice. You have two years to demand renewal, but the longer you wait, the more complicated the situation becomes (risk of limitation, loss of evidence).
• Document all your steps: keep acknowledgements of receipt, registered letters, bailiff's reports. In case of dispute, these elements are crucial. A simple email is not enough.

Further Analysis: Related Case Law and Developments

This 1990 decision is part of a protective line. Already, in a judgment of 11 May 1982 (No. 80-16.123), the Court of Cassation had ruled that the notice must be given on the expiry date of the lease, failing which it is void. The 1990 decision goes further: even if notice is given, but for a later date, it does not prevent the right to renewal. More recently, the Court confirmed this position in a judgment of 13 September 2006 (No. 05-14.105), specifying that a notice given for a later date is an irregular notice that does not terminate the lease.

The trend is therefore clear: the courts are strict on the formalities of the notice. The landlord who wishes to recover the premises must strictly comply with the legal requirements. Conversely, the tenant benefits from enhanced protection. This means that, in practice, commercial leases are rarely terminated by a simple notice: the landlord must often justify a serious reason (unpaid rent, lack of maintenance, etc.) or pay an eviction indemnity (Article L.145-28 of the Commercial Code) if renewal is refused without reason.

This case law has been stable for over thirty years. It should continue, as it is in line with the spirit of the commercial lease regime, which aims to protect the business and the stability of enterprises. For owners of premises in Lagord or Aytré, this means that it is often more profitable to negotiate a new rent than to try to evict a tenant by a poorly calibrated notice.

In Practice: What to Do

If you are a tenant and receive a notice for a date after the term of the lease:

1. Consult a lawyer specialising in commercial leases within 15 days.
2. Demand renewal by extrajudicial act (bailiff) or by registered letter with acknowledgement of receipt, referring to Article L.145-10 of the Commercial Code.
3. Continue to pay your rent under the terms of the current lease, subject to subsequent adjustment.
4. If the landlord refuses renewal, bring court proceedings to have your right recognised and, if necessary, to obtain an eviction indemnity.

If you are a landlord:

1. Check the exact expiry date of the lease.
2. Give notice at least six months before that date, by bailiff, stating the exact expiry date.
3. If you wish to refuse renewal, state the reason (e.g., repossession for occupation or construction).
4. If in doubt, seek advice before sending the notice. An error can be costly (eviction indemnity, procedural costs).

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 →