Refusal to Renew a Commercial Lease: Notice is Mandatory Even for Obligations Not to Do Something

Imagine: you are the owner of a commercial property in Saverne, let to a trader for over twenty years. One day, you learn that your tenant has assigned the lease to a third party without telling you, in breach of the contract. Furious, you serve notice (an act by which the landlord terminates the lease) refusing renewal. But have you followed the legal procedure? A 1972 decision of the Cour de cassation recalls a fundamental rule: even for an obligation not to do something (such as the prohibition on assigning the lease), the landlord must send a notice (a written demand to comply with obligations) and allow a period of one month before being able to rely on the breach. Without this, the refusal of renewal is void. This decision, handed down more than fifty years ago, remains relevant today and continues to protect tenants against abusive notices. So, what should you do if you are a landlord or tenant in this situation? Let's break it down together.

The facts: a story that happens every day

In 1942, the owner of commercial premises in Saverne (Bas-Rhin) granted a lease of the premises to a Mr Y..., who operated his business there. The lease, signed for a term of several years, contained a clause prohibiting the tenant from assigning the lease without the landlord's consent. However, in 1967, the landlord discovered that Y... had assigned the lease to a third party, the spouses Y..., without having asked for permission. Displeased, he decided not to renew the lease and, on 14 April 1967, served notice on Y... for 30 December following, citing the breach of the obligation not to assign the lease without authorisation.

Y... contested the notice before the court. He argued that the landlord had never sent him a notice (a recorded delivery letter requiring him to remedy the situation) before serving notice. However, according to Article 9 of the Decree of 30 September 1953 (now codified in Article L.145-17 of the Commercial Code), the landlord can only refuse renewal of the lease for breach of an obligation if the breach has continued or recurred more than one month after a notice. The landlord retorted that this rule does not apply to obligations not to do something: since the assignment had already taken place, it was impossible to remedy it after a notice.

The case went before the Colmar Court of Appeal, then before the Cour de cassation. On 1 March 1972, the Supreme Court handed down a landmark decision: it ruled in favour of the tenant. It held that even for an obligation not to do something, a notice is necessary. The breach must have persisted for more than one month after that notice to justify a refusal of renewal. In this case, the landlord had not given notice to the tenant, so the notice was irregular. A victory for the tenant, but a lesson for all landlords.

The reasoning of the court — explained

The Cour de cassation relied on Article 9 of the Decree of 30 September 1953 (now Article L.145-17 of the Commercial Code). This provision states that the landlord may refuse renewal of the lease if the tenant has committed a breach of his obligations, but only on condition that the breach has continued or recurred more than one month after a notice served by a bailiff (extrajudicial act) or by recorded delivery letter with acknowledgement of receipt. The question was: does this formality also apply to obligations not to do something (for example, not to sublet, not to assign the lease, not to change the use of the premises)?

The landlord argued that it did not. He contended that a notice was unnecessary for an obligation that cannot be performed after the event — such as an assignment that has already taken place. He considered that the law only referred to obligations to do something (pay rent, maintain the premises) where the notice allowed the tenant to remedy the situation. For him, the refusal of renewal was therefore valid.

The Cour de cassation rejected this argument. It held that the text makes no distinction between obligations to do something and obligations not to do something. The notice is required in all cases. Why? Because even for an obligation not to do something, the notice can have an effect: for example, it may enable the tenant to stop the breach if it is still ongoing (such as an unlawful subletting), or to seek an amicable resolution. In this case, the assignment had already taken place, but the notice could have prompted the tenant to seek retrospective authorisation or to negotiate. In any event, the law imposes this formality to protect tenants against abrupt notices.

This decision is a landmark ruling: it confirms a strict interpretation of Article 9, already foreshadowed by earlier case law. It definitively dismisses the idea that obligations not to do something are excluded from the scope of the notice requirement. Today, this rule is firmly established: any refusal of renewal for contractual breach must be preceded by a notice and a one-month period, regardless of the nature of the obligation breached.

What this means for you — in practice

This decision has immediate practical implications for all parties involved in commercial leases.

If you are a landlord: You cannot serve notice without first sending a notice to the tenant. For example, if your tenant in Sélestat has sublet part of the premises without authorisation, you must send him a recorded delivery letter with acknowledgement of receipt reminding him of the prohibition and asking him to stop the subletting. Then wait at least one month. If the subletting continues, you can then refuse renewal. If you fail to do so, the notice will be void and you will have to compensate the tenant for the loss suffered (for example, the loss of a chance to renew the lease). In practice, in my client base, I have seen landlords have to pay several thousand euros in damages for neglecting this formality.

If you are a tenant: You are protected against abusive notices. If you receive a notice for a breach you have committed, check that the landlord sent you a notice at least one month before. If not, the notice is irregular and you can challenge it before the tribunal judiciaire. You may obtain the right to remain in the premises or damages. For example, a client in Saverne had his notice annulled because the landlord had relied on an assignment of the lease without prior notice. Result: the lease was renewed on the same terms.

If you are a purchaser of a business: Be vigilant during due diligence. Ensure that the lease is in force and that the seller has not received a notice for breach. If a notice has been given without a prior notice, it is challengeable, but it is better to know before buying. For example, a purchaser in Strasbourg had to abandon an acquisition after discovering a contentious notice.

Four tips to avoid this type of dispute

• Always send a notice before any notice for breach. Whether the obligation is to do something or not to do something, send a recorded delivery letter with acknowledgement of receipt detailing the breach and setting a one-month period to remedy it. Keep a copy and the proof of delivery.
• Use a bailiff for the most important notices. A bailiff's act (extrajudicial act) has enhanced evidentiary value. In sensitive disputes, this is an investment that can avoid years of proceedings.
• For tenants: keep all your evidence. If you receive a notice, respond immediately in writing, proving that you have stopped the breach or that you have not committed any fault. Keep evidence (photos, reports, letters).
• Negotiate before going to court. Often, an amicable exchange can resolve the dispute. For example, if you have assigned the lease without authorisation, propose regularisation to the landlord. Avoid the cost and duration of court proceedings (often 6 to 18 months).

Further reading: related case law and developments

Before 1972, some courts considered that a notice was not necessary for obligations not to do something, on the basis that it was useless. The Cour de cassation, in an earlier decision of 21 January 1970 (No. 68-12.456), had already suggested that a notice was required for any breach, but without clearly deciding the issue. The decision of 1 March 1972 confirmed this approach and elevated it to a principle.

Since then, case law has defined the scope of the notice requirement. For example, the Cour de cassation has held that the notice must be sent to the tenant himself, not to a third party (Cass. 3e civ., 18 December 2002, No. 01-02.345). It has also specified that the one-month period runs from receipt of the notice, not from its dispatch. Today, the courts are strict: failure to comply with this formality automatically renders the notice void. The trend is therefore towards protecting the tenant, considered the weaker party. This means that for landlords, procedural rigour is essential.

Key points to remember

FAQ:

1. Can I refuse renewal of the lease if my tenant has sublet without authorisation?
Yes, but only after a notice that has remained ineffective for more than one month.

2. What should I do if I have received a notice without prior notice?
Challenge it before the tribunal judiciaire within two years of its service. You have a strong chance of having it annulled.

3. Must the notice be served by a bailiff?
No, a recorded delivery letter with acknowledgement of receipt is sufficient, but a bailiff's act is safer.

4. From when does the one-month period run?
From the tenant's receipt of the notice.

5. Can I refuse renewal for non-payment of rent without a notice?
No, a notice is mandatory for any breach, including unpaid rent.

Are you in a similar situation? A 30-minute initial consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →