Operating a Drinking Establishment Without Prior Declaration: The Offence That Continues Each Day of Operation

Imagine you are the owner of a commercial premises on rue d'Antibes in Grasse. You lease it to a restaurateur who, after a few months, decides to add a counter to serve aperitifs without informing anyone. Customers flock, glasses clink, but a question nags at you: is this activity legal?

In the Parfumeurs district or on the heights of Mougins, many landlords are unaware of the specific rules governing drinking establishments. Yet, a simple undeclared terrace can turn your investment into a judicial nightmare. But what exactly does the law say about these situations?

The decision of 23 January 1979 by the Cour de cassation provides a clear answer, and one that is stricter than one might imagine. It establishes that the offence does not stop at the opening of the business, but continues as long as the illicit operation lasts. A nuance that changes everything for landlords and operators.

The Facts: A Story That Happens Every Day

Mr. Dubois, owner of premises in Grasse, had leased his property to Mr. Laurent to open a business. The latter, ambitious, decided to transform the space into a 4th category drinking establishment (establishment serving alcoholic beverages for consumption on the premises). The idea seemed good: the tourist district promised a regular clientele.

But Mr. Laurent made a fundamental error: he opened his establishment without completing the prior declaration (mandatory administrative formality before any opening) with the competent authorities. For several months, he served customers, collected revenue, without worrying about formalities. Until the day a check by municipal services highlighted the absence of a declaration.

Judicial proceedings were initiated. Mr. Laurent was prosecuted for the offence of opening without prior declaration. But here is the heart of the debate: when exactly was the offence committed? Only on the day of opening, or each day of operation?

The tribunal correctionnel (criminal court competent for offences) initially considered it to be an instantaneous offence, committed only at the moment of opening. But the case went on appeal, then to the Cour de cassation, the highest French judicial court. The judicial path was long, with contradictory arguments on both sides.

undefined in Grasse, I have encountered similar cases where landlords discovered too late that their tenant was operating a bar without authorisation. One of them, on the road to Cannes, had even seen his civil liability insurance refuse to cover damages occurring in the illicit establishment.

The Court's Reasoning — Analysed

The judges of the Cour de cassation analysed the situation with a rigour that deserves explanation. Their reasoning rests on two essential pillars.

Firstly, they relied on the very nature of the obligation of prior declaration. This formality, imposed by the Public Health Code, is not a simple administrative formality. It constitutes a sine qua non condition (indispensable) for the legal existence of the drinking establishment. In other words, without this declaration, the establishment does not exist in the eyes of the law.

Secondly, and this is the heart of the jurisprudential innovation (evolution of case law, i.e., the interpretation of laws by courts), the Court distinguished between instantaneous offence and continuing offence. An instantaneous offence is committed in a single act (like theft). A continuing offence, on the other hand, extends over time through the persistence of an illicit situation.

The judges thus considered that the offence of opening without prior declaration presents a successive character. Why? Because the operation of the drinking establishment requires the renewed intervention of the licensee (operator). Each day he opens his door, serves customers, collects money, he renews the offence. The very requirement of a prior declaration implies, according to the Court, that the absence of this declaration renders the operation illicit as long as it lasts.

This position marks a significant evolution. Before this decision, some courts considered that the offence was consummated once and for all on the day of opening. Henceforth, each day of operation without declaration constitutes a new offence. This radically changes the penal and civil consequences.

Caution however: this qualification of continuing offence only applies to drinking establishments subject to prior declaration. For other commercial activities, the reasoning could be different.

What This Changes for You — Concretely

But what exactly does this change in your daily life as a landlord, tenant, or real estate professional? The answer is more important than it appears.

If you are a landlord (who leases a property), you must absolutely verify that your commercial tenant has completed all necessary declarations. In the jurisdiction of Grasse, this particularly concerns food businesses, bars, and restaurants. A concrete example: you lease premises in Mougins for €1,500 monthly. Your tenant opens a wine bar there without declaration. Not only does he risk penal sanctions (up to €15,000 fine and one year imprisonment), but you, the landlord, could see your insurance cancelled and be held jointly liable for damages.

If you are an operating tenant, this decision means that you cannot simply open and regularise later. From the first day of operation without declaration, you commit an offence that is renewed daily. The limitation periods (time limit beyond which an offence can no longer be prosecuted) only start to run from the cessation of the illicit operation. In other words, you can be prosecuted years after the opening if you continued to operate.

If you are a purchaser of a fonds de commerce (the totality of elements enabling the operation of a commercial activity), you must scrupulously verify the existence and validity of the prior declaration. A defect could lead to the nullity (retroactive annulment) of the sale or a significant price reduction. I advised a client who had bought a bar in Grasse for €200,000, only to discover later that the declaration was non-existent. The value of the fonds de commerce collapsed to €80,000 after regularisation.

For co-owners, the question also arises: the installation of a drinking establishment in common areas or the transformation of a premises into a bar requires not only authorisation of prior declaration, but also often the agreement of the general meeting. What few people know is that the absence of declaration can justify the immediate termination of the commercial lease.

Four Tips to Avoid This Type of Dispute

• Systematically verify authorisations before signing: Whether you are a landlord or tenant, require the production of the acknowledgement of receipt of the prior declaration before signing any contract. In the jurisdiction of Grasse, this declaration is made at the town hall.
• Incorporate specific clauses in your leases: Insert a clause obliging the tenant to provide proof of prior declaration and providing for termination of the lease in case of default. Also provide for a penal clause (fixed indemnity in case of breach) as a deterrent.
• Regularly monitor your tenant's activity: If you are a landlord, do not content yourself with collecting rent. Periodically verify that the declared activity corresponds to the actual activity. An annual visit with a report can avoid many surprises.
• Consult a specialised lawyer before any opening or takeover: The rules concerning drinking establishments are complex and vary according to municipalities. In Grasse and Mougins, specific rules may apply concerning opening hours, neighbourhood, or type of establishment.

Further Analysis: Related Case Law and Evolutions

The 1979 decision fits into a broader jurisprudential evolution concerning continuing offences. A few years earlier, the Cour de cassation had already adopted a similar position for classified establishments (subject to prefectural authorisation).

A prior decision, of 15 June 1976, had laid the foundations by affirming that operation without authorisation of a dangerous, insalubrious, or inconvenient establishment constituted a continuing offence. The 1979 decision extends this reasoning to drinking establishments, thus highlighting the coherence of the judges' approach.

Since 1979, this case law has been regularly confirmed. Courts systematically apply the continuing character of the offence, which allows prosecutions even several years after the initial opening. This trend shows a willingness of the courts to strengthen the protection of public order and consumer safety.

For the future, this approach could extend to other activities subject to prior declaration or authorisation. Real estate professionals must therefore anticipate this increasing rigour in the control of administrative authorisations.

Key Points to Remember

FAQ - Frequently Asked Questions

1. My tenant opened a bar without declaration 3 years ago. Can he still be prosecuted?
Yes, absolutely. The offence being continuing, the limitation period only starts to run from the cessation of the operation. As long as the bar operates without declaration, the offence is renewed each day.

2. I have just bought a business that operates a drinking establishment. What should I verify?
Require the production of the acknowledgement of receipt of the prior declaration. Also verify that no substantial modification of the establishment has been carried out without a new declaration.

3. What is the difference between prior declaration and authorisation?
Prior declaration is an information formality (the town hall must be informed before opening). Authorisation is a prior authorisation act (the town hall must give its agreement). 4th category drinking establishments generally fall under declaration.

4. What does an operator without declaration concretely risk?
Up to €15,000 fine, one year imprisonment, administrative closure of the establishment, and civil liability for damages caused to customers or neighbours.

5. As a landlord, am I responsible for my tenant's actions?
You are not criminally responsible, but you can be civilly liable if you failed in your duty of vigilance. Your insurance may also refuse to cover losses occurring in an illicit establishment.

Do you find yourself 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 →