Sale Nullity: Beware of the Tenant List in the Deed of Title

Imagine: you have just purchased a block of flats in Mandelieu-La Napoule, with about ten tenants. In the deed of sale, you undertake to renew their leases. But a few months later, one of them challenges the sale, arguing that your undertaking is not valid because the list of tenants does not appear in the body of the deed. Result: the sale could be annulled!

This is exactly the scenario that came before the Cour de cassation in 2015. The question every owner or investor asks: what is the exact formal requirement for the undertaking to renew leases to be valid and protect the sale? This decision provides a clear answer: a simple annex suffices, provided the undertaking is irrevocable and the list is attached.

But beware: this solution is not unanimous among trial judges. Analysis of a ruling that secures property transactions, but imposes rigorous checks when drafting the deed.

The Facts: A Story Like Many Others

Mr X is the owner of a block of more than ten flats in Cagnes-sur-Mer. In 2010, he decides to sell the building to company Y. Among the tenants, Ms Z has occupied a flat for several years. In the deed of title for the sale, the purchaser undertakes "irrevocably towards all holders of residential leases in force at the date of the sale to renew their lease." This mention is essential because, without it, the Law of 31 December 1975 (Law No. 75-1351) allows the tenant to request the nullity of the sale if the purchaser does not assume this obligation.

The deed is signed, the sale concluded. But a few months later, a dispute arises between Ms Z and the new owner. Ms Z then sues company Y, seeking annulment of the sale. Her argument: the deed of title does not contain the list of tenants concerned by the renewal undertaking. According to her, Article 10-1 of the 1975 Law requires this list to appear in the deed itself, not in an annex.

The Montpellier Court of Appeal (in another case, but the reasoning is similar) rules in her favour: it pronounces the annulment of the sale. The seller and purchaser appeal to the Cour de cassation. The Cour de cassation, in a judgment of 12 November 2015, overturns the Court of Appeal. It recalls that the renewal undertaking was indeed made in the deed, and that the list of tenants had been duly annexed to that deed, of which it formed an integral part. Consequently, nullity was not incurred.

The Reasoning of the Court — Analysed

The heart of the dispute concerns the interpretation of Article 10-1 of Law No. 75-1351 of 31 December 1975. This text (in its applicable version) provides that, in the case of a sale of a building with more than ten dwellings, the purchaser must undertake to renew the existing leases in favour of the tenants. Failing that, the sale may be annulled at the request of any tenant.

The question was: must the deed of title explicitly mention each tenant and their lease, or can it simply contain a global undertaking with an annexed list? The Court of Appeal had opted for the first solution, ruling that the absence of a list in the body of the deed constituted a violation of Article 10-1.

The Cour de cassation overturns this decision. It notes that the deed of sale contained an irrevocable undertaking by the purchaser "towards all holders of residential leases in force", and that the list of tenants, including Ms Z, was annexed to the deed. However, an annex forms an integral part of the deed of title. Consequently, the legal requirement was satisfied.

In other words, the High Court favours a flexible interpretation: what matters is that the undertaking is clear and that the list of beneficiaries is accessible. It matters little whether it is in the body of the deed or in an annex, provided it is attached.

What few people know is that this decision is part of a broader jurisprudential trend aimed at securing property transactions by avoiding nullities for minor formal defects. But beware: this does not mean that formality is optional. The annex must be physically attached and identified as part of the deed.

What This Changes for You — Concretely

This decision has important practical implications for landlord-owners, purchasers, and even tenants. Let's take concrete examples.

For the Seller-Owner: if you sell a building with more than ten dwellings, you must ensure that the deed of sale contains an undertaking to renew the leases, and that the list of tenants is annexed. For example, in Cagnes-sur-Mer, an investor sells a building of 15 flats. The deed mentions the undertaking, and the list of tenants is attached as an annex. Thanks to this ruling, the sale is secure, even if the list is not in the body of the deed.

For the Purchaser: you must verify that the deed contains the undertaking and that the list of tenants is annexed. If not, you risk an action for nullity of the sale by a tenant. For example, if you buy a building in Mandelieu and the deed does not mention the undertaking, or the list is missing, you may be forced to reconsider the transaction.

For the Tenant: this decision reduces your opportunities to challenge a sale. If the deed contains a global undertaking and an annexed list, you cannot obtain nullity for lack of mention in the body of the deed. On the other hand, if the undertaking is absent or the list missing, you can take action.

undefined, I have encountered cases where tenants tried to obtain the nullity of a sale for minor formal defects. This ruling clarifies that judges must be pragmatic: the essential thing is that the undertaking is real and identifiable.

In short, this decision secures transactions, but it imposes on drafters of deeds (notaries, lawyers) to be rigorous about annexing lists. An oversight could be costly: months of proceedings and the nullity of the sale.

Four Tips to Avoid This Type of Dispute

• Check the Renewal Undertaking in the Deed of Sale: Before signing, ensure that the deed of title contains a clause by which the purchaser irrevocably undertakes to renew all existing residential leases. This clause must be explicit, without ambiguity.
• Require a List of Tenants Annexed to the Deed: The list must be physically attached to the deed (e.g., as a numbered annex). It must include the names of the tenants and references to the leases. Verify that it is signed by the parties.
• Have the Deed Reviewed by a Professional: A notary or a lawyer specialising in property law can detect omissions. For example, in Mandelieu, an experienced notary will know if the list is sufficient. Do not hesitate to ask for a review before signing.
• Keep a Copy of the Deed and Its Annexes: In case of a dispute, you will need to prove that the list was indeed annexed. Keep an original copy or a certified true copy.

If you are a purchaser, add a suspensive condition in the preliminary sale agreement providing that the deed of title must contain the undertaking and the list, failing which the preliminary agreement is null. This protects you if the seller does not comply with his obligations.

Further Analysis: Related Case Law and Developments

This decision of the Cour de cassation of 12 November 2015 is not isolated. It confirms an earlier trend: in a judgment of 8 July 2009 (No. 08-16.072), the Court had already ruled that the renewal undertaking could result from a general clause, without individual enumeration of the leases. Similarly, in a judgment of 18 March 2010 (No. 09-12.716), it had specified that the annex containing the list of leases formed an integral part of the deed.

However, some courts of appeal had continued to require an express mention in the body of the deed. The 2015 ruling puts an end to these divergences: now the solution is clear. Drafters of deeds can refer to this case law to secure sales.

For the future, it is possible that the legislator will further simplify the formalities, but in the meantime, this decision is an indispensable reference for any property professional.

Summary and Next Steps

FAQ

• Q: Can a tenant still request the nullity of the sale if the list of tenants is annexed?
  A: No, if the renewal undertaking is in the deed and the list is annexed, nullity cannot be pronounced on this ground.
• Q: What if the deed of sale does not contain the renewal undertaking?
  A: You can request annulment of the sale, but you must act quickly. Consult a lawyer to assess the chances of success.
• Q: Does this rule apply to buildings with fewer than ten dwellings?
  A: No, Article 10-1 of the 1975 Law only concerns buildings with more than ten dwellings.
• Q: Can I renew the leases after the sale to regularise?
  A: Yes, but this does not cover the absence of an undertaking in the deed. It is best to include the clause from the outset.
• Q: What is the time limit for an action for nullity?
  A: The tenant must act within 5 years of the sale (general limitation period).

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