Co-ownership and Assignment of a Commercial Lease: When a Single Co-owner Cannot Bring Legal Proceedings

Imagine: you own a commercial premises in Meaux with your brother, let to a grocery store. The tenant goes bankrupt, the liquidator sells the lease. You learn that the assignment deed contains a forged signature. You want to challenge it, alone. Bad idea: the court tells you that you are inadmissible, because you should have acted with all the co-owners. This is exactly what the Court of Cassation decided on 12 June 2013 in a case that shook practitioners.

The question is simple: can a co-owner, without the agreement of the others, bring a plea of forgery (an action aimed at having a notarial deed declared false) against an assignment of a commercial lease? The answer is no. And this inadmissibility cannot be remedied later.

This decision, handed down by the Court of Cassation, has direct consequences for all co-owners (several people owning the same property), especially those who let commercial premises. In Meaux as in Chelles, professionals must be vigilant: an isolated action can ruin everything.

The facts: a story that happens every day

Mr Eric X. is a co-owner of a building in Meaux, let under a commercial lease to a company operating the business "Au P'tit Marché". Following the judicial liquidation of the tenant, Maître B, the liquidator, assigns the commercial lease to a third party. Mr X. challenges this assignment: according to him, it infringes his rights as co-owner. He then files an opposition to the assignment and, in this context, raises an incident of a plea of forgery (allegation of a forgery in a notarial deed).

Problem: Mr X. is acting alone. However, the building is co-owned with other people (family, associates...). The Court of Appeal rules his action inadmissible because he does not have the consent of all co-owners. Mr X. appeals to the Court of Cassation, arguing that the plea of forgery is a simple judicial administration measure, which does not require unanimity. The Court of Cassation dismisses his appeal: the plea of forgery is not an act of normal exploitation of the co-owned property, but an action that affects the common assets. It therefore requires the agreement of all co-owners, in accordance with Article 815-3 of the Civil Code (rules on the management of co-owned property).

The case does not stop there: Mr X. attempts to have his co-owners intervene during the proceedings to regularise. Too late, says the High Court: the inadmissibility was acquired from the outset and cannot be cured by a subsequent intervention. A real trap for negligent owners.

The reasoning of the court — broken down

The Court of Cassation relies on two fundamental texts. First, Article 306 of the Code of Civil Procedure, which requires that the plea of forgery be made by an act filed with the court registry by the party or its agent with a special power of attorney (an express mandate for this act). Second, Article 815-3 paragraph 3 of the Civil Code, which provides that acts that do not relate to the normal exploitation of co-owned property require the consent of all co-owners.

What is an act of normal exploitation? These are routine management acts: signing a lease, collecting rents, carrying out minor repairs. However, legal proceedings to challenge an assignment of a lease, and even more so a plea of forgery, are serious acts that can have significant financial consequences for the co-ownership. The Court therefore considers that this falls outside the scope of day-to-day management. Hence the requirement for unanimity.

The judges reject Mr X.'s argument that the plea of forgery is a mere procedural incident. No, they reply: it is a full legal action that engages the liability of all co-owners. They also recall that Article 306 of the Code of Civil Procedure requires a special power of attorney: if a single co-owner acts without a mandate from the others, he is inadmissible. And this nullity is absolute: it cannot be regularised afterwards, even if the other co-owners intervene later.

This solution is very protective of co-owners: they cannot be committed against their will in a risky procedure. But it is harsh for those who want to act quickly: they must first obtain the agreement of all, which can take time.

What this changes for you — practically

For the landlord co-owner: You cannot, alone, challenge an assignment of a lease or bring a plea of forgery. You must obtain the agreement of all co-owners. Example: in Chelles, you own 50% of a premises let to a bakery. The tenant assigns his lease to a fast-food outlet. You believe the assignment deed is fraudulent. If your co-owner refuses to act, you are stuck. The only solution is to ask the court for authorisation if urgency justifies it (Article 815-5 of the Civil Code), but this is a heavy procedure.

For the tenant or assignee: If you buy a commercial lease, check that all co-owners have consented to the assignment. An action by a single co-owner could threaten the validity of your title. In the case, the assignee faced an opposition, but it was held inadmissible. This does not fully protect you: if the co-owner obtains the agreement of the others, the action may be valid.

For the property professional (notary, agent, lawyer): Be very careful when drafting assignment deeds involving co-ownership. Obtain written agreement from all co-owners. A lack of unanimous agreement may lead to the cancellation of the assignment or its inadmissibility in court.

A concrete example: in Meaux, a commercial lease assigned for €50,000. If a co-owner challenges it alone, the proceedings can last 2 years and cost €5,000 in legal fees, only to be declared inadmissible. Better to prevent.

Four tips to avoid this type of dispute

• Before any assignment of a lease, obtain a unanimous agreement from all co-owners. Even if one of them is passive, get his written consent. This avoids any later challenge.
• If you are alone wanting to act, ask the court for authorisation. Article 815-5 of the Civil Code allows a co-owner to apply to the court to be authorised to carry out an urgent or necessary act. But prove the urgency.
• In case of a dispute, do not delay in gathering the co-owners. The earlier you obtain their agreement, the less risk of inadmissibility. Once the action is brought, it is too late to regularise.
• Consult a lawyer specialised in property law. In Chelles or Meaux, a professional will advise you on the strategy to adopt, particularly to check whether the contested deed is a forgery or a simple mistake.

Further reading: related case law and developments

The Court of Cassation had already ruled on the powers of a co-owner in legal proceedings. In a decision of 19 March 2008 (No. 07-11.486), it held that a co-owner could alone bring an action for termination of a lease for non-payment of rent, because it was an act of normal exploitation. The difference is clear: termination of a lease is a routine management act, whereas a plea of forgery is a serious act affecting the whole co-ownership.

This 2013 decision is part of a broader trend: judges are increasingly strict about formalities for the representation of co-owners. They consider that co-ownership is a temporary and fragile situation that requires enhanced protection. In the future, one can expect the Court to extend this requirement of unanimity to other contentious acts, such as actions for nullity of sale or for recovery of property.

For practitioners, this means systematically checking the capacity of the party acting: is it alone or in co-ownership? If in co-ownership, all must be present or represented. An omission can be fatal.

What you must absolutely remember

FAQ:

1. Can I alone challenge an assignment of a lease if I am a co-owner? No, you must obtain the agreement of all co-owners, unless urgency is authorised by the court.
2. What if my co-owner refuses to act? You can apply to the court to be authorised to act alone (Article 815-5 of the Civil Code), but this takes time.
3. Can the inadmissibility be regularised afterwards? No, the Court of Cassation is clear: the subsequent intervention of co-owners does not cure the initial defect.
4. What are the risks if I act alone? Your action will be declared inadmissible, you will lose time and money (legal fees, costs).
5. Does this rule apply to other actions? Yes, for any serious act affecting the co-ownership (sale, mortgage, partition). For routine acts (collection of rents), a single co-owner can act.

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 →