Eviction Compensation: Interim Injunction Application Interrupts Limitation Period

You own a commercial premises in Autun, rue de la République, and your tenant announces their departure. You breathe a sigh of relief, thinking you can relet at a higher rent. But then they claim eviction compensation of €80,000, on the grounds that you refused to renew their lease. You raise the limitation defence: 'Your claim is too late; more than two years have passed since the end of the lease!'

But what really counts for calculating this period? Is it the date of the first letter, the date of the application, or the date of the expert appraisal order? And if interim injunction proceedings have been commenced, is that enough to 'save' the claim?

The French Supreme Court, in a judgment of 8 July 2009, answers clearly: yes, an application for an interim injunction interrupts the limitation period, and does so for the entire duration of the proceedings, including until the order appointing an expert. A decision that changes the game for hundreds of disputes every year.

The facts: a story that happens every day

Mrs Y, tenant of a commercial premises in Chalon-sur-Saône, runs a ready-to-wear boutique. Her landlord, Mr X, gives her notice without an offer of renewal. Mrs Y believes she is entitled to eviction compensation (compensation due to the evicted tenant for the loss of their business) and applies to the interim injunction judge in 2004 for an expert appraisal to assess the amount due. The judge grants the application and appoints an expert.

The expert submits their report in 2005. In 2006, Mrs Y issues proceedings against Mr X on the merits to obtain payment of the compensation. Problem: more than two years have passed since the end of the lease. Mr X invokes the two-year limitation period under Article L. 145-60 of the Commercial Code. The Dijon Court of Appeal, in a judgment of 18 March 2008, declares the claim time-barred. Mrs Y appeals to the Supreme Court.

Before the Supreme Court, the debate centres on a technical point: does the application for an interim injunction interrupt the limitation period? Mr X argues that it does not, because the interim injunction application is not a claim for payment. But the highest court rules against him.

The court's reasoning — dissected

The French Supreme Court relies on Article L. 145-60 of the Commercial Code, which provides that: 'Actions arising from a commercial lease are prescribed after two years.' This text specifically covers claims for payment of eviction compensation. But what happens when a party commences interim injunction proceedings (urgent proceedings before the President of the court) to request an expert appraisal?

The solution is found in Article 2241 of the Civil Code (formerly 2244), which provides that: 'A claim in court interrupts the limitation period.' The Supreme Court clarifies that an application for an interim injunction constitutes a claim in court that interrupts the limitation period, and does so for the entire duration of the proceedings, i.e. until the proceedings are terminated by the order appointing the expert.

In clear terms, once Mrs Y applied for an interim injunction in 2004, the limitation clock was reset. And as long as the expert appraisal was not completed, the period did not run. The Court of Appeal was therefore wrong to consider the claim time-barred.

What few people know is that this judgment confirms settled case law: an interim injunction application, even if it does not directly seek payment, interrupts the limitation period as long as it is a claim in court. But beware: the interruption only lasts for the duration of the proceedings. Once the order is made, the period starts running again. So you must act quickly after the expert's report.

What this means for you — practically

For the commercial tenant: If your landlord refuses to renew the lease, you have two years from the end of the lease to claim your eviction compensation. But if you commence interim injunction proceedings for an expert appraisal, you gain time: the period is interrupted. Example: in Digoin, an evicted bakery was able to obtain €120,000 in compensation after an expert appraisal, even though the landlord argued limitation. The interim injunction application was made within two years, and the judgment on the merits came later.

For the landlord: Beware: a simple application for an interim injunction is enough to interrupt the limitation period. Do not rely on the passage of time to escape compensation. Check whether interim injunction proceedings have been commenced. If so, the period is suspended until the expert appraisal order. You will need to negotiate or litigate on the merits.

For the purchaser of a business: When you buy a business, check the limitation periods. A seller who has let two years pass without acting after a refusal to renew may lose their right to compensation. But if interim injunction proceedings have been started, the period is interrupted: the right to compensation still exists. In Autun, a buyer of a bar-tobacco shop was able to benefit from €90,000 in compensation thanks to this case law.

Four tips to avoid this type of dispute

• Keep all key dates: Note the date of the notice, the application, the expert appraisal order and the report. A simple oversight can lose the right to compensation.
• Do not wait until the end of the expert appraisal to act on the merits: As soon as the expert report is filed, apply to the court within two months to be sure not to exceed the overall period.
• Have the interruption confirmed by a lawyer: Check that the interim injunction application was properly served on the landlord before the expiry of the two-year period. A lawyer specialising in commercial law (such as Maître Zakine) can assist you.
• If in doubt, apply for an interim injunction: If you are approaching the end of the limitation period, even without knowing the exact amount of compensation, request an expert appraisal by interim injunction. This interrupts the limitation period and gives you time to prepare your case.

Further reading: related case law and developments

Before this judgment, some Courts of Appeal considered that an interim injunction application only interrupted the limitation period if it directly sought payment of the compensation. The Supreme Court ended this uncertainty in 2009, following the logic of its judgment of 14 February 2006 (n° 04-16.429), which had already accepted interruption by an expert appraisal application in construction matters.

Since then, the case law is settled: any claim in court, whatever it may be, interrupts the limitation period, provided it comes from the holder of the right. But beware: the interruption only benefits the action that was brought. An interim injunction application for another cause (for example, a claim for an interim payment) does not interrupt the limitation period for the action for payment of eviction compensation.

undefined, I have come across cases where tenants lost their right because they did not apply for an interim injunction before the expiry of the two years. Once the period has passed, it is too late. This decision therefore reminds us of the importance of a swift reaction.

Checklist before acting

FAQ: Questions you may have

1. How do I know if my eviction compensation is time-barred? Calculate two years from the date of the end of the lease (or the date of the final decision refusing renewal). If you have commenced interim injunction proceedings, the period has been interrupted and starts again after the order.

2. Can I still act if the expert appraisal has been completed for more than two years? Yes, if you applied for an interim injunction within the initial period. The interruption lasts until the order. Afterwards, you have two years from the order to act on the merits.

3. What should I do if my landlord refuses to pay the compensation? Apply to the judicial court within two years of the end of the lease or the interim injunction order. Do not wait: a friendly expert appraisal is not enough to interrupt the limitation period.

4. Must the interim injunction application be served before the end of the lease? No: it must be served before the expiry of the two-year period from the end of the lease. But it is better to act early.

5. Does a simple registered letter interrupt the limitation period? No. Only a claim in court (application, petition) interrupts the limitation period. A letter, even with acknowledgement of receipt, is not enough.

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 →