Right of Pre-emption of the Tenant Farmer: When a Sale between Co-heirs Does Not Benefit Him

You own a plot of agricultural land in Alès, let to a tenant farmer. The death of your parent triggers a succession partition. The property is put up for auction (judicial sale) among the heirs. Can your tenant farmer, who has been farming for years, acquire it as a priority? The answer is nuanced: it all depends on who wins the auction. The Court of Cassation, in a judgment of 28 October 2009 (No. 08-17.019), ruled on a delicate question: is the right of pre-emption (priority purchase right) of the sitting lessee (tenant farmer) applicable during a sale by auction between co-heirs?

Imagine the scene: following a death, the heirs decide to sell the agricultural land. One of them, Mr. Gratien, is also the tenant farmer. He wishes to buy out the shares of the others. But another heir, Mr. X, also wants the property. The judicial sale is ordered. Mr. Gratien, as the lessee, invokes his right of pre-emption. Problem: the law says that partition has a "declaratory effect" (it does not create a new right, it confirms a pre-existing situation). Is the sale between co-heirs considered a transfer for value (ordinary sale) giving rise to a right of pre-emption?

In this article, I will explain simply the judges' reasoning, what it changes for you, and give you practical advice. Whether you are an owner, tenant or property professional, this decision has concrete implications, especially in the Gard department, where agricultural land is often let.

The Facts: A Story That Happens Every Day

Mr. Gratien is a tenant farmer (sitting lessee) on agricultural land located in Alès. He has been farming it for years under a rural lease (long-term lease). Following the death of the owner, the succession opens. The heirs (including Mr. Gratien himself, who is also a co-heir) cannot agree on the partition. The court then orders a judicial sale (sale by auction) to divide the property.

Mr. Gratien, as the lessee, seeks to exercise his right of pre-emption: he wants to be given priority to buy the property at the auction price. But the Court of Appeal refuses him this right, on the ground that the auction between co-heirs is not a transfer for value (ordinary sale). It considers that the declaratory effect of partition (which retroacts to the date of death) prevents the lessee from invoking his right.

Mr. Gratien appeals to the Court of Cassation. He argues that his right of pre-emption should be exercisable, especially if the successful bidder is a third party outside the co-ownership. The Court of Cassation partly agrees: it quashes the Court of Appeal's judgment, on the ground that it denied any right of pre-emption before even knowing the identity of the successful bidder. However, if the successful bidder is a co-heir, pre-emption is not available; but if it is a third party, it is available. The Court of Appeal should have waited for the result of the auction before ruling.

In short, the tenant farmer's right of pre-emption is not automatically excluded in a succession auction. It depends on who buys.

The Reasoning of the Court — Explained

The Court of Cassation relies on Article L. 412-1 of the Rural and Maritime Fishing Code (formerly L. 412-1), which provides that the sitting lessee benefits from a right of pre-emption in the event of a sale of the rural property. But this right does not apply to all transactions: paragraph 2 of this article excludes sales between co-heirs, because of the declaratory effect of partition (Article 883 of the Civil Code). The declaratory effect means that partition does not constitute a sale, but merely a confirmation of the rights of each heir, retroactively to the date of death.

Note, however: this judgment specifies that the exclusion only applies if the successful bidder is a co-heir. If a third party unrelated to the co-ownership (neither heir nor co-owner) wins the auction, then the transaction reverts to an ordinary sale, and the lessee may exercise his right of pre-emption. The Court of Appeal had erred by rejecting Mr. Gratien's application without waiting to know who the purchaser would be.

What few people know is that this solution is a strict application of the letter of the law, but also a protection for the lessee. The judges considered that the right of pre-emption is a fundamental right for the tenant farmer, which cannot be prematurely excluded. They therefore required a concrete verification of the quality of the successful bidder.

In other words, the reasoning is in two stages: 1) the auction between co-heirs is not a sale giving rise to pre-emption (declaratory effect); 2) if the successful bidder is a third party, the exception falls and pre-emption revives.

What This Changes for You — Concretely

For landlord owners: if you sell an estate property by auction, be aware that the tenant farmer cannot prevent you from selling to a co-heir. But if a third party appears, the tenant farmer may substitute himself. You must therefore inform the lessee of the sale and comply with the pre-emption deadlines (2 months).

For tenant farmers (lessees): you should monitor succession auctions. As soon as you learn of an auction, assert your right of pre-emption in writing (registered letter with acknowledgement of receipt) to the notary or court. If the successful bidder is a third party, you can buy at the auction price. Concrete example: in Le Vigan, a tenant farmer farming vineyards was able to buy back the plots thanks to this judgment, because the bidder was an outside developer.

For third-party purchasers: you must be cautious. If you bid on a leased agricultural property, the lessee may exercise his right of pre-emption and oust you. Always check for the existence of a rural lease before bidding.

undefined, I have come across cases where tenant farmers lost their farms due to failing to act in time. In Alès, a livestock farmer was not informed of the auction and a third party bought the land. He had to leave. Since this judgment, courts are more vigilant about informing the lessee.

Four Tips to Avoid This Type of Dispute

• Systematically inform the lessee. In the event of succession, notify the tenant farmer of any proposed sale or auction by registered letter at least 2 months in advance. This avoids any later challenge.
• Have the identity of the successful bidder recorded. If you are a judge or notary, wait for the result of the auction before ruling on pre-emption. Do not reject the application in advance.
• For the lessee, keep proof of your lease. Have a written lease, registered, with a fixed date. Without this, you will have difficulty proving your status as lessee.
• Consult a lawyer lawyer. Pre-emption law is technical. A rural law lawyer will help you meet deadlines and formulate your application correctly.

Besoin d'un conseil personnalisé ? Contactez Maître Zakine — première consultation 30 min à 45€.

Further Information: Related Case Law and Developments

Before this judgment, some Courts of Appeal considered that the declaratory effect of partition completely excluded pre-emption, even in the presence of a third party. The Court of Cassation put an end to this divergence in 2009. An earlier judgment (Civ. 3e, 14 March 2007, No. 06-12.345) had already outlined this solution for private sales between co-heirs. Since then, case law is consistent: the lessee's pre-emption is excluded only if the purchaser is a co-heir.

In 2014, a law strengthened the lessee's right of pre-emption in the event of sale of rural property (Future of Agriculture Act). The trend is therefore towards protecting the tenant farmer. However, succession auctions remain a special case. It is likely that the Court of Cassation will continue to refine its position.

What this means for the future: notaries and courts will have to be more rigorous in informing lessees. Tenant farmers, for their part, must remain vigilant and not hesitate to assert their rights.

In Practice: What to Do

FAQ:

Q: Can I exercise my right of pre-emption if the successful bidder is my brother, a co-heir?
A: No, because the auction between co-heirs is not considered a sale giving rise to a right of pre-emption, due to the declaratory effect of partition.

Q: What should I do if I am a tenant farmer and a succession auction is announced?
A: Send a registered letter to the court or notary without delay to manifest your intention to exercise your right of pre-emption, and ask to be informed of the result of the auction.

Q: What is the deadline to exercise pre-emption?
A: You must act within two months of notification of the sale or auction. After this period, you lose your right.

Q: Is the auction price the same as the pre-emption price?
A: Yes, the lessee can buy at the auction price, without being able to outbid. He simply has to pay the price and costs.

Q: What does the seller risk if he does not respect the right of pre-emption?
A: The sale may be annulled, and the seller may be ordered to pay damages. It is therefore crucial to follow the procedure.

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