Eviction Compensation: Loss of Right to Remain in Premises is a Separate Head of Damage, Cass. 2017 Decision

Imagine: you are the owner of commercial premises in Mulhouse, rue de la Sinne. You give notice to your tenant to recover the premises. You pay them an eviction compensation (sum due to the evicted tenant to compensate for the loss of the business). But your tenant considers that this compensation does not cover everything: they lost their right to remain in the premises between the notice and the actual payment. Can they claim more? The question has troubled owners and tenants for years. This decision of the Court of Cassation of 30 November 2017 provides a clear answer: yes, the loss of the right to remain in the premises is a separate head of damage from the eviction compensation. Explanations.

The facts: a story that happens every day

A landlord, owner of commercial premises in Colmar, serves a notice with refusal of renewal to his tenant, VR Services Ltd. The tenant challenges the notice before the Tribunal de Grande Instance of Colmar, which annuls it. But in the meantime, the tenant had to leave the premises. He then claims an eviction compensation (to compensate for the loss of his business) and, additionally, damages for the loss suffered due to having lost his right to remain in the premises between the notice and the payment of the compensation. The landlord refuses, arguing that the eviction compensation already repairs all losses. The Colmar Court of Appeal rules in favour of the tenant. The landlord appeals to the Court of Cassation.

The reasoning of the court — broken down

The Court of Cassation upholds the judgment of the Colmar Court of Appeal. It relies on Article 1240 of the Civil Code (formerly 1382), which requires reparation for damage caused by one's fault. Here, the landlord's fault is having served an abusive notice, later annulled. The loss resulting from the loss of the right to remain in the premises (i.e., the impossibility of staying in the premises until payment of the eviction compensation) is not compensated by the eviction compensation itself. The eviction compensation compensates for the loss of the business, not the temporary loss of enjoyment of the premises. This is a subtle but fundamental distinction. The judges refuse to consider that the eviction compensation is a lump sum covering everything. They open the way to additional compensation. This decision is part of a trend protective of commercial tenants.

What this changes for you — concretely

If you are a landlord in Mulhouse or elsewhere, be vigilant: an poorly justified or abusive notice may cost you much more than the eviction compensation. You could be ordered to pay additional damages for the loss of the right to remain in the premises. For example, if your tenant had to move six months before receiving their compensation, they can claim the loss of earnings from their activity during that period (lost rent, clientele, etc.). In Colmar, a tenant obtained €15,000 in damages on top of their €80,000 eviction compensation. If you are a tenant, keep all evidence of your loss (drop in turnover, removal costs, etc.).

Four tips to avoid this type of dispute

• Check the validity of your notice before sending it: have it drafted by a lawyer specialised in commercial leases in Mulhouse or Colmar. A procedural defect can invalidate everything.
• Negotiate an amicable departure: offer the tenant a global compensation including compensation for the loss of the right to remain, to avoid a trial.
• Document your loss from the outset: if you are a tenant, have a bailiff draw up a report on the condition of the premises and keep your accounts.
• Anticipate payment deadlines: the eviction compensation must be paid promptly. If you are a landlord, ensure sufficient cash flow to pay on time.

Further reading: related case law and developments

This decision confirms earlier case law of the Court of Cassation (Civ. 3e, 9 March 2011, No. 10-10.496) which already distinguished the loss of the right to remain in the premises from the eviction compensation. Since 2017, courts systematically apply this rule. There is an increase in claims for additional damages in commercial lease disputes. The future? Perhaps a unification of heads of damage by the legislature, but for now, this distinction is well established.

Key takeaways

FAQ:

• Can I claim damages in addition to the eviction compensation? Yes, if you lost your right to remain in the premises due to an abusive notice.
• What is the time limit to act? You have 2 years from the notice to bring a claim before the court.
• How to assess this loss? It corresponds to the loss of earnings during the period you should have remained in the premises (rent, lost turnover).
• Can the landlord avoid paying? Yes, if he proves that his notice was valid and that the eviction compensation already covers the loss.
• What if I am a landlord and my tenant claims damages? Consult a lawyer to negotiate or challenge the amount.

In a similar situation? A 30-minute initial consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →