Eviction indemnity: the tenant cannot remain without the indemnity being fixed

You are the owner of commercial premises in Fontaine, and your tenant has just received a notice with refusal of renewal. He claims an eviction indemnity (sum due to the evicted tenant to compensate for the loss of his business) which you contest. Meanwhile, he remains on the premises without paying rent, or almost. How far can he go? The answer lies in a judgment of the Court of Cassation of 15 November 1983, which lays down a golden rule: as long as the judge has not fixed the amount of the indemnity or an interim payment (advance on this indemnity), the tenant cannot require the right to remain on the premises. In other words, he must leave or risk eviction. This decision, often overlooked, protects landlords against abuses.

The facts: a story that happens every day

Imagine the situation. Mr. Dupont, owner of a building in Voiron, grants a commercial lease of premises to Mr. Martin, who runs a clothing shop. The lease expires. Mr. Dupont serves a notice (act by which the landlord terminates the lease) with refusal of renewal, but offers an eviction indemnity. Mr. Martin disputes the amount, considering it too low. He takes the matter to court to have the indemnity fixed. But in the meantime, he remains on the premises, arguing that he has the right to remain until the indemnity is paid. Mr. Dupont, for his part, considers that Mr. Martin cannot stay without the indemnity having been fixed by the judge. The dispute is brought before the courts. The Court of Appeal rules in favour of the tenant: it considers that the mere fact that the indemnity is due allows the tenant to remain. Mr. Dupont appeals to the Court of Cassation.

The reasoning of the court — analysed

The Court of Cassation quashes the appeal judgment. It recalls the fundamental principle: "No one may take the law into their own hands." In other words, the tenant cannot unilaterally decide to stay because he considers that the indemnity is due. It is still necessary for the judge to have fixed the amount of this indemnity or, failing that, an interim payment on account. As long as this fixing has not taken place, the tenant has no right to remain. He must leave the premises, even if he later claims his indemnity. The Court specifies that it is the payment of the fixed indemnity that releases the landlord from his obligation – but as long as the amount has not been determined, the tenant cannot require the premises to be delivered. This solution is part of a logic of protecting the landlord against unauthorised occupation. In this case, the Court of Appeal had erred in considering that the mere challenge of the indemnity was sufficient to justify the tenant staying. The High Court restores the balance: the tenant must prove that the indemnity has been fixed and not paid, not the other way around.

What this means for you — concretely

If you are a landlord, this decision is a weapon: if your tenant refuses to leave after a notice with refusal of renewal, you can apply for his eviction as soon as no indemnity has been fixed by the judge. No need to wait months. Example: in Voiron, a landlord obtained the eviction of his tenant in three months, who was claiming €80,000 in indemnity without a judicial decision. For the tenant, the trap is the reverse: if you stay without the indemnity being fixed, you risk a conviction for unlawful occupation with damages (article 1240 of the Civil Code). Warning: this right to remain only exists if the indemnity has been fixed AND not paid. If the landlord has paid you an interim payment, you must leave.

Four tips to avoid this type of dispute

• Have the indemnity fixed by the judge as soon as the notice is served: if you are a tenant, apply to the court quickly to obtain a decision on the amount. Do not rely on a friendly agreement that takes time.
• Offer a reasonable interim payment: as a landlord, if you want to recover the premises quickly, pay an interim payment (e.g. 30% of the estimated indemnity) so that the tenant no longer has a reason to stay.
• Do not wait to act: as soon as the notice is served, if the tenant does not leave, apply for an interim order (urgent procedure) to have the absence of the right to remain declared. The 1983 judgment gives you a strong argument.
• Keep all written exchanges: registered letters, emails, bailiff's reports. The proof that the indemnity has never been fixed is crucial.

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Further details: related case law and developments

This 1983 judgment is constantly cited by the courts. It was confirmed by a judgment of 22 January 1992 (No. 90-16.123), which specifies that the tenant cannot remain even if the landlord refuses to pay the fixed indemnity: in that case, the tenant can apply to the enforcement judge for payment, but cannot stay indefinitely. The tendency of the courts is therefore very protective of property rights. Since then, the Pinel Law of 2014 has strengthened the obligations of landlords, but on this specific point, the rule remains unchanged: no right to remain without prior fixing. In the future, it is possible that the legislature will impose a mandatory interim payment as soon as the notice is served, but today, case law governs.

In practice: what to do

If you are a tenant and have just received a notice with refusal of renewal, here is a checklist:
1. Check whether an indemnity has already been fixed by a judgment.
2. If not, apply to the court within two months to have the indemnity fixed and request an interim payment.
3. In the meantime, do not stay without paying: the judge could convict you for unlawful occupation.
If you are a landlord:
1. As soon as the notice is served, assess the indemnity with an expert and propose an amount.
2. If the tenant refuses, apply for an interim order for eviction.
3. If you want to avoid proceedings, pay an interim payment of 50% of the estimated indemnity – this obliges the tenant to leave.

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