Limitation Period for Eviction Compensation: Beware of the Two-Year Deadline

Imagine: you are a tenant of a commercial premises in Lisieux, rue de la Chaussée, for fifteen years. Your landlord gives you notice to sell, entitling you to eviction compensation (compensation the owner must pay you if you are evicted from your commercial premises). You start proceedings, but you sue the wrong person. The court dismisses your claim. You think you can launch a new expert appraisal? Beware: the limitation period (the period after which you can no longer take legal action) is running. That is exactly what the Court of Cassation reminds in its judgment of 18 December 2002.

But what exactly does this change for you, owner or tenant? This decision, made in a dispute between a tenant company and the owner of a building in Caen, sets an implacable rule: the action for payment of eviction compensation is time-barred after two years from the final decision rejecting a misdirected claim. In short, if you sue the wrong person, you lose your right to compensation if you do not correct it within two years.

How to react? Before starting proceedings, make sure you sue the correct party. Advice: have a lawyer verify the exact identity of the owner (landlord) and, above all, respect the two-year period for any new action after a final rejection.

The Facts: A Story That Happens Every Day

A tenant company of a commercial premises in Caen (Calvados) receives a notice (termination of lease) from its landlord, Mrs Y. The landlord offers eviction compensation, but the amount does not satisfy the tenant. The tenant then sues Mrs Y to obtain an expert appraisal and determination of the compensation. So far, nothing unusual.

Except that the tenant makes a fatal mistake: instead of suing the true owner (Mrs X, who had sold the building in the meantime), it maintains its action against Mrs Y, who is no longer the owner. The court, then the court of appeal, dismiss the tenant on 29 May 1996, by a final judgment (definitive decision against which no appeal is possible).

Two and a half years later, in November 1998, the tenant wakes up: it now sues the correct owner (Mrs X) and requests a new expert appraisal to quantify the eviction compensation. But the Caen Court of Appeal, then the Court of Cassation, oppose the limitation period (foreclosure): since the 1996 judgment, more than two years have passed without any legal action against the correct person. The action is therefore time-barred, in accordance with Article L. 145-60 of the Commercial Code (which sets a two-year period for actions relating to commercial leases).

This case illustrates a classic trap: the tenant, focused on the amount of compensation, neglects to verify who the true owner is. Result: it loses all right to compensation, even though the principle of eviction was established.

The Reasoning of the Court — Analysed

The Court of Cassation, in a very short judgment, approves the Caen Court of Appeal. The reasoning is as follows:

• Applicable period: Article L. 145-60 of the Commercial Code provides that all actions arising from a commercial lease are time-barred after two years. The action for payment of eviction compensation is part of it.
• Starting point: the period runs from the final decision rejecting the misdirected claim. Here, the judgment of 29 May 1996 is final because no appeal was lodged within the legal time limit.
• Interruption of limitation: the first action (against Mrs Y) did not interrupt the limitation period with regard to Mrs X, because it was not directed against her. However, to interrupt (stop) the period, the action must be brought against the correct person.
• New expert appraisal: the request for a new expert appraisal, made in 1998, is not a simple investigative measure, but a new legal action. It cannot revive a time-barred right.

What few people know: Article L. 145-60 distinguishes between the limitation of the action for determination of compensation (which follows the fate of the main action) and the action for payment (which is subject to its own period). Here, the tenant had already obtained an expert appraisal before 1996, but had not implemented it. The court concludes that the action for payment was time-barred.

In short, once you have definitively lost against the wrong person, you have two years to act against the correct one. After this period, you are foreclosed (unable to act).

What This Changes for You — Concretely

For the commercial tenant: this is a severe warning. If you receive a notice (termination) or are evicted, you must imperatively:

• Verify the exact identity of your landlord (current owner). Do not rely on the name on your lease if it has not been updated.
• Act quickly: from the court decision rejecting your claim (even for a procedural defect), you have two years to start again against the correct person.
• Do not wait for an expert appraisal: if an expert appraisal has been ordered but not carried out, the period still runs.

Concrete example: in Ouistreham, a tenant of a beach commercial premises receives a notice from the manager of the SCI, but the true owner is the SCI itself. If he sues the manager personally, he will be dismissed. If he waits three years to sue the SCI, the action is time-barred and he loses all compensation. undefined, I have come across cases where tenants have lost several tens of thousands of euros for this reason.

For the landlord owner: this decision is a protection. If a tenant sues you by mistake (you or your predecessor), you can raise the limitation period after two years. But beware: if you are the true owner, do not rely on this limitation if the tenant has acted against you within the period.

For the purchaser of a commercial premises: check if an eviction procedure is ongoing. If the tenant has already been dismissed against the former owner, they might try to sue you. You can then raise the limitation period if two years have passed.

Four Tips to Avoid This Type of Dispute

• 1. Identify your landlord precisely. Before any action, request a K-Bis extract (for a company) or a property record (for an individual) from the land registry service (ex-Cadastre). This will cost you about €15 and save you years of proceedings.
• 2. Act within two years of any final rejection. If you are dismissed, even for a technical reason, you have two years to start again against the correct party. Note the date of the final judgment in your diary.
• 3. Do not let an expert appraisal lie dormant. If an expert has been appointed, restart the procedure within two years. Otherwise, the limitation period applies.
• 4. Consult a lawyer as soon as you receive the notice. A professional will verify the validity of the notice, the identity of the landlord and the deadlines to be met. This may cost you €200 but will save you a much heavier loss.

Further Reading: Related Case Law and Developments

This decision is part of a consistent line of case law from the Court of Cassation. Already, in a judgment of 20 January 1993 (n° 91-12.999), the Court had held that the action for payment of eviction compensation is time-barred after two years from the actual eviction (date of the tenant's departure). Here, the Court clarifies that the period also runs from the final rejection of a misdirected claim.

Since 2002, the trend has been towards a strict application of the two-year period. Judges do not hesitate to declare actions time-barred even if brought a day or two after the deadline. In 2019, the Court of Cassation even held that the mere notification of an offer of compensation by the landlord does not interrupt the limitation period (Civ. 3e, 19 Sept. 2019, n° 18-19.118).

For the future, it is likely that the courts will continue to apply Article L. 145-60 rigorously. The legislature has not amended this text, which protects owners against late actions. The only way to avoid limitation is to sue the correct person within two years.

In Practice: What to Do

Checklist if you are a commercial tenant and have been dismissed:

1. Check the date of the final decision: look at the date of the judgment and add two months for the appeal period to the Court of Cassation (unless the appeal has already been rejected). The decision becomes final after exhaustion of remedies.
2. Identify the correct person: request a property record from the land registry service (SPF) of Caen or online. Cost: €12 to €20.
3. Act within two years: if less than two years have passed since the final decision, you can still sue the correct owner. If more than two years, unfortunately, your action is time-barred.
4. Consult a lawyer: even if the deadline seems passed, a lawyer can check if there is any act interrupting limitation (e.g., a registered letter requesting compensation). Do not delay.

FAQ:

• Can I interrupt the limitation period with a simple registered letter? Yes, if it clearly manifests the intention to claim compensation and is addressed to the correct owner. But case law requires a precise formal notice. A court summons is better.
• What if the owner dies? The period continues to run against the heirs. You must sue them within two years, but you must first identify them.
• Does the two-year period run from the eviction or from the decision? Both: the period runs from the eviction, but also from any final decision rejecting a claim. To be safe, act as soon as the eviction occurs.

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 →