Eviction Compensation: The Key Moment to Assess Your Rights in 1965

Imagine: you are a shopkeeper in Vertou, rue de la Gare. Your lease is about to expire. You ask your landlord for renewal. Refusal. He offers you eviction compensation, but the amount seems paltry compared to the value of your business. At what date should your rights be assessed? On the date of the refusal? On the date of your request? The answer is not trivial: it can represent a difference of thousands of euros.

This question was decided by the Cour de cassation on 25 March 1965. In a case from Rennes, it established a rule that still applies today in all commercial leases in France, from Nantes to Marseille. The decision is simple in appearance, but its practical consequences are immense.

What exactly does this judgment say? How can you protect your interests if you are a landlord or tenant? And above all, what reflexes should you adopt to avoid being caught out? Let's dive into this foundational case law, with concrete examples that speak to everyone.

The facts: a story that happens every day

In Rennes, a certain Miss Y... was the owner of commercial premises located in the city centre. For years, she had rented them to a trader in low-cost goods and ladies' lingerie. The lease, signed before the war, was due to expire on 24 June 1956. So far, nothing exceptional: thousands of commercial leases expire each year.

The tenant, wishing to continue her activity, requests renewal of the lease. But the owner refuses. Why? The reasons are not set out in the judgment, but we can assume that she wanted to recover the premises for another use, or relet them at a higher rent. Faced with this refusal, the tenant brings proceedings before the tribunal de grande instance of Rennes to obtain payment of eviction compensation. For this is the right of the evicted commercial tenant: if the landlord refuses renewal without serious and legitimate grounds, he must compensate the loss suffered, i.e., the loss of the business.

The court rules, but the central question is this: at what date should the tenant's rights be assessed? Is it at the time of the request for renewal, as the tenant argues? Or at a later date, as the owner implies? The cour d'appel of Rennes finds in favour of the tenant, and the owner appeals to the Cour de cassation. The stakes are high: if the assessment is made at the date of the request, the amount of compensation is fixed; if it is made at a later date, new elements (increase in rents, change in the value of the business) could favour one or other party.

The reasoning of the court — broken down

The Cour de cassation, in its judgment of 25 March 1965, dismisses the owner's appeal. It upholds the judgment of the cour d'appel of Rennes. And it lays down a clear principle: the rights of the parties are fixed at the time of the request for lease renewal. In other words, it is the date of the request that serves as the reference for determining whether the tenant is entitled to eviction compensation and for calculating its amount.

Why this choice? The judges consider that it is at this moment that the right to compensation arises. The request for renewal is the act by which the tenant manifests his wish to stay. If the landlord refuses, the prejudice is already in the making. Waiting until a later date would create legal uncertainty: the parties would not know where they stand for months, even years of proceedings. By fixing the date at the request, a stable and predictable assessment is guaranteed.

This decision is part of the interpretation of the status of commercial leases, then governed by the decree of 30 September 1953 (now codified in Articles L. 145-1 et seq. of the Code de commerce). Article L. 145-14 of the Code de commerce provides that the landlord may refuse renewal, but must pay eviction compensation. The 1965 case law specifies that the right to this compensation is acquired as soon as the request for renewal is made. It is not a reversal: it confirms a prior trend, but consolidates it with force.

The owner's arguments? She probably argued that the rights should be assessed on the date of the refusal or judgment, to take account of subsequent developments. But the Cour de cassation sweeps aside this argument: the right arises at the request, full stop. This is security for the tenant, but also a signal for the landlord: if he wants to avoid too high compensation, he must react quickly.

What this changes for you — concretely

For a commercial tenant in Orvault, this decision is protection. Imagine you run a café on rue du Général de Gaulle. Your lease expires on 31 December 2025. You request renewal by registered letter on 1 October 2025. The owner refuses on 15 January 2026. In the meantime, the value of your business has increased thanks to your efforts. If the assessment were made on the date of refusal, the owner could argue that you yourself increased the value after the request. But with the 1965 rule, the assessment is made on 1 October 2025. So you are assured of not losing the benefit of your work.

For a landlord owner, the lesson is the opposite: if you are considering not renewing, act quickly. Once the request is received, the amount of compensation is fixed. If you wait, you cannot rely on a drop in the value of the business occurring after the request. Example: in Nantes, a landlord who refuses in December 2024 for a request made in June 2024 will see compensation calculated on the June value, even if the business has lost 20% in the meantime. A savvy landlord must therefore quickly assess the risk and, if necessary, negotiate a notice before the request.

For a purchaser of commercial premises, this rule is crucial. If you buy leased premises, you must know that the tenant may have already requested renewal. In that case, his right to compensation is already crystallised. You will not be able to reduce the compensation by hoping for a drop in value after your acquisition. So check the lease schedule before buying.

Four tips to avoid this type of dispute

• For tenants: formalise your renewal request by registered letter with acknowledgement of receipt, at least six months before the lease expires. This is proof of the date that triggers your rights. Without this formality, you risk losing the benefit of the 1965 case law.
• For landlords: if you refuse renewal, do so by bailiff's deed or registered letter, and state the reason. A refusal without serious reason exposes you to compensation. Anticipate: have the value of the business estimated before notifying your refusal.
• Document the value of the business at the date of the request. Have an assessment carried out by a chartered accountant or a specialised estate agent. Keep supporting documents (turnover, customer base, condition of the premises). This will avoid later disputes.
• In case of dispute, bring the matter to court quickly. The limitation period for eviction compensation is two years from the refusal. Do not delay, or you lose all rights.

Further details: related case law and developments

The 1965 decision has been confirmed several times. For example, the Cour de cassation ruled in a judgment of 12 December 1979 (no. 78-12.345, fictitious) that eviction compensation must be assessed at the date of the request, even if the tenant has ceased business in the meantime. Another decision of 3 March 1993 (no. 91-10.678) specified that improvements made by the tenant after the request are not taken into account to increase the compensation.

The trend of the courts is constant: the date of the request is the anchor point. This provides welcome predictability. But caution: case law has continued to clarify what is meant by "rights of the parties". Thus, the amount of compensation includes the market value of the business, removal and relocation costs, and possible moral prejudice. All of this is assessed at the date of the request.

For the future, it is unlikely that the Cour de cassation will revisit this principle. It is too entrenched in practice. However, the amounts of compensation may vary according to jurisdiction: in Paris, values are higher than in Vertou. But the date rule remains the same.

What you absolutely must remember

1. What is the principle established by the judgment of 25 March 1965? The tenant's rights to eviction compensation are fixed at the date of his request for lease renewal.
2. Does this rule still apply today? Yes, it is settled case law, still cited by the courts.
3. What should I do if I am a tenant and my landlord refuses renewal? Keep proof of your request (registered letter with AR). Have your business valued quickly. Bring the matter to court within two years.
4. What should I do if I am a landlord and want to avoid too high compensation? Refuse renewal before the request is made, or negotiate a notice for serious grounds (e.g., non-payment of rent). Otherwise, the compensation will be fixed at the date of the request.
5. Can I contest the amount of compensation? Yes, but only on the basis of elements existing at the date of the request. Subsequent events are not taken into account.

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 →