Right to lease and security of tenure: a historic decision still relevant today

Imagine: you are the owner of a building in Puilboreau, near La Rochelle. You signed a lease with a professional organisation for a fixed term. At the expiry, you hope to recover the premises, perhaps to house your son or to sell them. But the organisation refuses to leave, arguing that its mission is not finished. What can you do? Does the law side with you? This question, which seems simple, gave rise to a landmark ruling of the French Supreme Court in 1972, still applicable today.

This is the story of a dispute between a bank, owner of a building, and the National Federation of the Hotel Industry, the tenant. The Federation had occupied the premises for a long time, under a lease granted by an administrative order. At the expiry of the lease, the bank wanted the Federation to leave. But the Supreme Court ruled in favour of the tenant: as long as the missions entrusted to the Federation by the order are not completed, it can stay. No new order is needed to confirm this. This is what is called the "right to remain in the premises".

This decision, rendered over fifty years ago, remains a reference for all leases concluded for a mission of general interest. But what exactly does it say? And above all, how does it apply today, whether you are a landlord in Châtelaillon-Plage or a tenant in Puilboreau? Analysis.

The facts: a story like many that happen every day

In the aftermath of the Second World War, the State entrusted the National Federation of the Hotel Industry (FNIH) with missions of reconstruction and organisation of the profession. For this purpose, a ministerial order granted it a lease on a building belonging to the company Banque Demachy. The lease was without limitation of duration, but linked to the accomplishment of these tasks.

In 1950, the lease expired. Banque Demachy, the owner, sought the eviction of the FNIH. Its argument: the lease is terminated, and the right to remain in the premises does not exist because there is no new lease, even verbal. The Federation retorts that its mission is not completed and that it can therefore stay.

The dispute would last for years. First, the court ruled in favour of the FNIH. Banque Demachy appealed, then appealed in cassation. The case came before the Supreme Court in 1972. A twist: in the meantime, the Council of State had already validated the legality of the order granting the lease. The question was therefore whether, to assess the right to remain in the premises, it was necessary to request a new interpretation from the administrative authority.

The Supreme Court, in its judgment of 2 May 1972 (No. 70-20.083), answered no. It considered that the judicial judge could himself ascertain that the tasks entrusted to the FNIH were not completed, without having to seek the administration's opinion. And it confirmed the Federation's right to remain in the premises.

The reasoning of the court — analysed

The Supreme Court relied on several principles. First, the right to the lease had been granted by an administrative order whose legality had been recognised by the Council of State. This order did not set a time limit for the lease, but made it subject to the accomplishment of missions. Therefore, as long as these missions exist, the lease continues.

Next, the Court dismissed the argument of Banque Demachy that a new interpretation of the order by the administration was needed to know whether the tasks were completed. It considered that the judicial judge could assess this point. Why? Because it is a question of fact, not a question of the legality of the order. The judge can examine the evidence (activity reports, etc.) and decide whether the mission is completed.

Finally, the Court noted that Banque Demachy had not proved that the tasks were completed. It did not provide evidence of the existence of a new verbal lease, nor of regular rent payments by other groups. In short, the Federation was still carrying out its mission.

This decision is an application of the principle that the right to remain in the premises may be granted to the tenant when the lease was linked to a mission of general interest. It does not create an automatic right: the tenant must demonstrate that his mission is not finished. But it reverses the burden of proof: it is for the landlord to prove that the mission is completed if he wants to evict.

What this means for you — concretely

If you are a landlord: You rent a building to an association, federation or professional organisation for defined missions (e.g., caretaker's flat, premises for a public service mission). At the expiry of the lease, you want to recover the premises. But beware: if the mission is not completed, the tenant may remain. Example: you rented premises to a sports association in Puilboreau for 10 years. The association is supposed to supervise young people. If it proves that this mission continues, it can stay after the expiry. To evict it, you must demonstrate that the mission is completed. The burden of proof is on you.

If you are a tenant (association, professional): You occupy premises for a mission of general interest. At the expiry of your lease, do not leave without checking whether you have a right to remain. If your mission is not completed, you can stay, even without a new written lease. But beware: you must be able to prove that the mission continues (reports, decisions of bodies, etc.). For example, in Châtelaillon-Plage, a federation of traders had obtained a lease to animate the town centre. It was able to remain ten years after the expiry, because the animation continued.

If you are a purchaser of a rented building: You buy a building with a professional tenant. Find out about the origin of the lease: if it was granted by an administrative decision for a mission, the tenant may have a right to remain even after the expiry. This can reduce the value of the property or your ability to recover possession. Concrete example: an investor buys a building in La Rochelle, leased to a federation. He thinks he can set up his offices there at the end of the lease. But the federation stays, and he loses 3 years of rent in proceedings.

Four tips to avoid this type of dispute

• Draft a precise lease: Clearly state that the lease is concluded for a fixed term, without a right to remain. If the lease is linked to a mission, specify the duration of the mission and the conditions of its end. Avoid vague terms like "for the duration of the mission" without an expiry date.
• Make a joint inventory of fixtures at each expiry: Even if the tenant stays, have the condition of the property recorded and sign an addendum. This will avoid disputes over the condition of the premises during a future eviction.
• Require regular justifications: In the lease, require the tenant to provide an annual report on the progress of his mission. This will make it easier for you to prove that the mission is completed if you want to recover the premises.
• Consult a lawyer before buying a rented property: If the tenant is an association or federation, request a legal analysis of the lease. A lawyer specialising in property law in Puilboreau or Châtelaillon-Plage can check whether the tenant has a right to remain. This will save you from unpleasant surprises.

Further analysis: related case law and developments

This 1972 decision is part of a line of case law protective of tenants carrying out a mission of general interest. One can cite a Supreme Court judgment of 10 March 1993 (No. 91-15.244) which extended this principle to leases granted by public bodies to associations. The Court held that the right to remain in the premises subsists as long as the general interest purpose has not ceased, even if the lease has expired.

However, since 2014, the ALUR law (Access to Housing and Renovated Urban Planning) has strengthened the rights of landlords in terms of repossession for habitation or sale. But these provisions do not apply to leases concluded before 2014. For recent leases, the right to remain is more restrictive. The current trend is therefore towards a balance: the tenant may remain if the mission is still relevant, but the landlord can more easily prove the end of the mission thanks to precise contractual clauses.

In practice, courts require the landlord to demonstrate that the mission is definitely completed. For example, if the tenant organisation has changed its corporate object or ceased all activity, the right to remain is no longer justified. On the other hand, if the activity continues, even reduced, the right to remain is generally recognised.

Frequently asked questions

What is the right to remain in the premises?
It is the right of a tenant to stay in the premises after the expiry of his lease, without a new contract, when certain conditions are met. In this decision, the condition is that the general interest mission for which the lease was granted is not completed.

Can I evict a tenant who remains without title?
Yes, but you must prove that the mission is completed. If you fail to do so, the judge may grant the tenant the right to stay. It is advisable to consult a lawyer before initiating eviction proceedings.

What are the time limits for action?
You can act as soon as the lease expires. But if the tenant remains, you must serve him notice (respecting a notice period of 6 months for a commercial lease, for example). Then you file a claim in court. The proceedings can last from 6 months to 2 years depending on the case.

Does this decision apply to residential leases?
No, the right to remain for a general interest mission mainly concerns professional, commercial or administrative leases. For residential leases, the rules are different (1948 law, ALUR law).

What should I do if my tenant refuses to leave despite the end of his mission?
You must apply to the judicial court to have the end of the mission declared and seek eviction. Gather all evidence (reports, decisions of the organisation, etc.). A specialised lawyer will help you build your case.

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