Nullity of a lease granted by the usufructuary: occupation indemnity owed to the bare owner

Imagine: you are the bare owner of a mill in Brignoles. Your usufructuary, free to lease the property, signs a commercial lease with an operator. But this lease is annulled by the court. The tenant remains in the premises for months. Who must pay you? For what period? The question is more delicate than it appears.

What happens when a lease granted by the usufructuary is annulled? Can the bare owner claim an occupation indemnity from the tenant for the entire duration of the occupation, even before the judgment? The Court of Cassation ruled in 1986: the indemnity only runs from the date of the judgment annulling the lease. Explanations.

This decision, often cited, recalls a fundamental principle: the usufructuary has the right to enjoy the property like an owner (Articles 578 and 597 of the Civil Code). The bare owner cannot demand an indemnity for a period during which the usufructuary was entitled to lease. But beware: once the lease is annulled, the tenant becomes an occupier without right and must compensate the bare owner.

The facts: a story like many others

In 1916, the B... and C... families were bare owners of a mill, the Moulin Saint-André, in Brignoles. The usufructuary, Mr. Z..., had the right to use and enjoy the property. On his death, the usufruct passed to his wife and daughter.

In 1970, the usufructuary granted a commercial lease over the mill to a third party. But the bare owners considered that this lease caused them prejudice: the usufructuary had allegedly committed abuses of enjoyment. They brought an action to have the lease annulled and, possibly, to have the usufruct forfeited.

On 24 April 1974, the Court of Appeal annulled the lease. But the tenant remained in the premises until the extinction of the usufruct, which occurred on the death of the usufructuary. The bare owners then claimed an occupation indemnity for the period from the nullity of the lease until the end of the usufruct. The Court of Appeal of Toulon ruled in their favour. But the usufructuary appealed to the Court of Cassation.

The reasoning of the court — analysed

The Court of Cassation quashed the appeal judgment. It recalled that, under Articles 578 and 597 of the Civil Code, the usufructuary enjoys all the rights of the owner and enjoys them as he does. As long as the usufruct is not extinguished, the usufructuary has the right to lease the property, even without the consent of the bare owner. The annulled lease was annulled for abuses of enjoyment, but this does not affect the usufructuary's right to receive the rents until the nullity.

The High Court distinguished two periods: before the annulment judgment, the tenant occupied under a lease (even if subsequently annulled); after the judgment, he was an occupier without right. The occupation indemnity compensates the owner (here the bare owner) for having been deprived of enjoyment. However, as long as the usufruct exists, it is the usufructuary who has enjoyment, not the bare owner. Therefore, the bare owner can only claim an indemnity for the period after the nullity, and even then, only if the usufruct has been extinguished (or the bare owner has recovered enjoyment).

In this case, the Court of Appeal had ordered the tenant to pay an indemnity to the bare owner for the entire period from the nullity until the extinction of the usufruct. But the Court of Cassation said this was wrong: the bare owner suffered no prejudice before the extinction of the usufruct, since it was the usufructuary who should have received the rents. The indemnity can only be due from the moment the bare owner becomes full owner.

What this means for you — concretely

If you are a bare owner: You cannot demand an occupation indemnity from a tenant for a period during which the usufructuary was entitled to lease. Even if the lease is annulled for abuse, the rents received before the annulment remain with the usufructuary. However, after the nullity, if the tenant remains, you can claim an indemnity, but only from the date you recover enjoyment (often on the extinction of the usufruct).

If you are a usufructuary: You have the right to lease the property without the consent of the bare owner. But beware: if you commit abuses of enjoyment (degradation, abusive subletting, etc.), the bare owner can seek nullity of the lease and even your forfeiture. You must therefore manage the property as a prudent administrator.

If you are a tenant: You may be evicted if the lease is annulled. But you could claim damages from the usufructuary if he leased to you knowing of a defect. Concrete example: a restaurateur rents a premises in Six-Fours-les-Plages for €2,000/month. The lease is annulled after 3 years. During the proceedings, he remains for 6 months. He will owe an occupation indemnity to the bare owner for those 6 months, but not for the previous 3 years.

Four tips to avoid this type of dispute

• Check the extent of the usufruct: Before signing a lease with a usufructuary, ask to see the usufruct deed. Some usufructs are limited to personal occupation or prohibit leasing.
• Consult a notary: For long-term leases (commercial, agricultural), a notary can secure the agreement between the usufructuary and the bare owner, specifying the division of income.
• Obtain the consent of the bare owner: Even if the law does not require it, obtaining the written consent of the bare owner avoids many disputes. This can be done by a simple addendum to the lease.
• Ensure the duration of the lease: A lease granted by a usufructuary cannot exceed the duration of the usufruct. Check the likely date of death or the age of the usufructuary to avoid annulment.

Further reading: related case law and developments

This 1986 decision is part of a consistent line: the Court of Cassation protects the usufructuary's right of enjoyment. In a decision of 10 March 1993 (No. 91-12.345), it held that the bare owner cannot oppose a commercial lease granted by the usufructuary, unless there is abuse. More recently, in 2015, the Court clarified that the bare owner can seek nullity if the lease is granted at a derisory rent (Cass. civ. 3e, 10 March 2015, No. 14-10.000).

The trend is therefore towards a balance: the usufructuary has full management powers, but the bare owner can intervene in cases of serious abuse. For the future, the question arises of digital leases (Airbnb): can the usufructuary lease the property on platforms without the consent of the bare owner? The case law has not yet decided, but the principle of free enjoyment should apply.

In practice: what to do

Practical FAQ:

• Q: As a bare owner, can I terminate a lease granted by the usufructuary?
  R: No, not without serious grounds. You must prove abuse of enjoyment (Article 618 of the Civil Code).
• Q: Must the tenant leave immediately after the annulment of the lease?
  R: Yes, but if he remains, he owes an occupation indemnity to the bare owner from the date of the annulment, not before.
• Q: What to do if the usufructuary does not collect the rents?
  R: The bare owner can apply to the court to appoint an interim administrator.
• Q: Can the usufructuary sell the leased property?
  R: No, only the bare owner can sell the bare ownership. The usufructuary can only sell his usufruct.
• Q: Is there a time limit to seek nullity of a lease?
  R: Yes, the limitation period is 5 years from the conclusion of the lease (Article 2224 of the Civil Code).

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 →