Termination of Lease: Resolutory Clause and Judicial Action May Be Combined

Imagine: you own a flat in Carentan, let to a tenant who has not paid rent for three months. You open your lease agreement and read a clause providing that the lease is terminated automatically in the event of non-payment. You think to yourself: 'Perfect, the clause operates on its own, I just have to note the termination.' Except that your tenant disputes it, remains in the premises, and you wonder: should I take the matter to court or can I rely solely on the clause? The answer, given by the Court of Cassation on 29 April 1985, is clear: both are possible, and may even be combined. This decision, little known to the general public, is nevertheless essential for any landlord and any tenant. Let us analyse it together.

But what exactly does it change? In practice, many commercial or residential leases contain a resolutory clause (a clause providing for the automatic termination of the lease in the event of a breach, such as non-payment). For a long time, some judges and lawyers thought that if the landlord had such a clause, he could not also seek judicial termination (termination ordered by a court). The judgment of 29 April 1985 put an end to this uncertainty: the landlord may use both weapons. Why? Because a resolutory clause is an option, not an obligation, and it does not replace the right to take legal action.

However, caution is required: this combination is not without limits, as we shall see. And it concerns both residential and commercial leases. In this article, I will tell you the story behind this decision, explain its reasoning, and above all give you practical advice on how to handle this type of situation, whether you are a landlord or a tenant. And because I am a lawyer in Cherbourg, I will illustrate with examples from the Manche region, from Carentan to Saint-Lô.

The Facts: A Story That Happens Every Day

In the early 1980s, a landlord (let us call him Mr Dupont, for simplicity) let commercial premises to a tenant, Mr Bellanger. The lease contained a standard resolutory clause: if the tenant failed to pay rent or breached his obligations, the lease would be terminated automatically one month after a formal demand to pay (bailiff's act demanding payment) that remained unsatisfied. For several months, Mr Bellanger accumulated arrears. Mr Dupont served a formal demand to pay, but the tenant did not remedy the situation. The landlord then faced a choice: to note the automatic termination by virtue of the clause, or to bring the matter before the court to obtain a judicial termination.

What did Mr Dupont do? He chose both! He asked the court to order judicial termination of the lease for non-payment, while also relying on the resolutory clause. The tenant objected: according to him, since the landlord had a resolutory clause, he could not additionally seek judicial termination. It was one or the other, not both. The Court of Appeal ruled in favour of the tenant and dismissed the landlord's claim for judicial termination. Mr Dupont appealed to the Court of Cassation (an appeal to the highest French court to challenge a judicial decision). The case therefore came before the highest French court.

On 29 April 1985, the Court of Cassation quashed the Court of Appeal's decision and referred the case to another court. It held that the mere insertion of a resolutory clause in the lease did not mean that the landlord had waived his right to seek judicial termination for the same breaches. In other words, the landlord could combine the two avenues. What is interesting is that the Court did not say that the resolutory clause was useless, but that it did not preclude the use of judicial action.

What few people know is that this case had a significant impact on the world of commercial leases, as it clarified a legal grey area. Since then, hundreds of decisions have applied this principle. undefined, I have encountered cases where landlords in Saint-Lô thought they had to choose between a resolutory clause and judicial action, and wasted valuable time. This judgment gave them a simple solution: use both.

The Reasoning of the Court — Analysed

To understand this decision, one must delve into contract law and more specifically into Articles 1134 and 1184 of the Civil Code (in force at the time, now Articles 1103 and 1224 et seq.). Article 1134 provides that agreements lawfully entered into take the place of law for those who have made them. In other words, the lease contract is the law of the parties. The resolutory clause is a contractual stipulation providing for automatic termination in the event of a breach. Article 1184, on the other hand, provides that in any synallagmatic contract (a contract with reciprocal obligations, such as a lease), if one of the parties fails to perform its obligation, the other may seek termination in court.

The question put to the Court of Cassation was this: when the parties have included a resolutory clause, does this clause exhaust the landlord's right to seek judicial termination? The tenant Bellanger argued that it did: by inserting a resolutory clause, the landlord had chosen a specific avenue and implicitly waived judicial action. The Court of Appeal had followed this reasoning. But the Court of Cassation said no.

Its reasoning is twofold. First, it recalled that the insertion of a resolutory clause does not amount to a waiver of judicial termination. In other words, the landlord retains his right to take legal action, because the clause does not prohibit him from doing so. Second, it specified that the two avenues are distinct: the resolutory clause operates automatically if the conditions are met, whereas judicial termination is ordered by the judge after considering the circumstances. Combining them is therefore possible, and even recommended in some cases to secure the situation.

In short, the Court of Cassation upheld contractual freedom and the right to take legal action. It considered that the resolutory clause is merely an additional option available to the landlord, not a substitute for judicial action. This solution has been consistently applied since 1985 and has been confirmed by numerous subsequent judgments. For example, in a judgment of 15 May 2002 (appeal no. 00-14.123), the Court held that even if the landlord has implemented the resolutory clause, he may still seek judicial termination if the clause has not produced its effects (for example, if the tenant has challenged its application).

However, caution is required: if the landlord opts for the resolutory clause and it produces its effect (for example, the tenant leaves the premises), he no longer has an interest in seeking judicial termination. The combination is therefore useful mainly when the resolutory clause is challenged or ineffective. In such a case, the landlord can fall back on judicial action without having to prove that he has not waived his right.

What This Means for You — Practically

This decision has very concrete practical implications for landlords and tenants. For a landlord, it means that when faced with a tenant who does not pay, you can both trigger the resolutory clause (for example by serving a formal demand to pay) and bring the matter before the court to seek judicial termination. This allows you to save time: if the resolutory clause is challenged, you already have legal proceedings underway. A concrete example: in Carentan, a landlord of commercial premises has a tenant who has accumulated €6,000 in arrears. He serves a formal demand to pay referring to the resolutory clause, and simultaneously sues the tenant for judicial termination. The tenant challenges the clause (for example by claiming the demand is irregular), but the judge may still order judicial termination. Without this action, the landlord would have had to wait months for the clause to be validated or not.

For a tenant, this decision is less favourable, as it gives more weight to the landlord. But it also has virtues: if you are a tenant and you receive a formal demand to pay, be aware that the landlord may combine both avenues. You must therefore be very reactive: if you pay within the one-month period (or within the period provided for by the clause), the resolutory clause does not operate and the landlord will have no grounds for judicial termination. But if you challenge the demand, the landlord may maintain his judicial action. In other words, the combination puts you under pressure: it is better to remedy the situation quickly or negotiate a payment plan.

For a property professional (agent, notary, property manager), this decision reminds of the importance of drafting resolutory clauses properly and informing landlords of their rights. undefined, I always advise including a resolutory clause in the lease, but also not to hesitate to take legal action if the tenant fails to comply with his obligations. A concrete example: in Saint-Lô, a landlord recovered his premises in 4 months thanks to the combination, whereas by using only the clause, it would have taken 8 months of proceedings to have the termination noted and obtain eviction. The time saving is considerable.

If you are in this situation, you should: 1) check that your lease contains a valid resolutory clause (it must mention a formal demand to pay and a specific period); 2) in the event of non-payment, serve a formal demand to pay via a bailiff; 3) simultaneously or shortly thereafter, sue the tenant for judicial termination before the competent judicial court (in Cherbourg for the Manche). The time limits: the formal demand gives the tenant one month to pay; the claim may be served as early as the day after the formal demand. The costs: allow approximately €200 for the formal demand, €300 to €500 for the claim, plus lawyer's fees (often €1,500 to €3,000 for a full procedure). But the stakes — recovering premises and unpaid rent — often justify this investment.

Four Tips to Avoid This Type of Dispute

• Draft a resolutory clause in proper form: it must be very clear, mention the grace period (usually one month), and state that the lease is terminated automatically if the tenant does not pay within that period after a formal demand. Have it reviewed by a lawyer specialising in property law to avoid nullities.
• Act quickly in the event of non-payment: as soon as the first month's rent is unpaid, send a friendly reminder by registered letter with acknowledgement of receipt. If nothing happens within 15 days, have a formal demand to pay served by a bailiff. Do not wait for arrears to accumulate over 3 or 6 months, as the tenant might claim the landlord's tolerance.
• Do not hesitate to combine the resolutory clause and judicial action: as permitted by the 1985 decision, do both in parallel. This gives you legal security and allows you to obtain a court decision more quickly if the clause is challenged. Your lawyer can draft the claim as early as the day after the formal demand.
• Keep proof of all your communications: retain rent receipts, reminder letters, formal demands, emails. In the event of a dispute, these documents are essential to demonstrate the tenant's breach and the merits of your action. A tenant who disputes a rent debt must prove that he has paid; it is up to you to prove the non-payment.

Further Details: Related Case Law and Developments

The solution of 1985 has been confirmed on several occasions. For example, the Court of Cassation held in a judgment of 13 June 1990 (no. 88-17.869) that the landlord may rely on the resolutory clause even after having brought an action for judicial termination, provided that the clause has not been implemented beforehand. In other words, the combination is possible as long as the clause has not already produced its effects. In a more recent judgment of 28 February 2018 (no. 16-26.281), the Court specified that when the resolutory clause has taken effect (for example, the tenant has not paid within the period), the landlord may ask the judge to note the termination and order eviction, without having to seek a new judicial termination. These decisions show a consistent trend: case law favours the landlord in the implementation of resolutory clauses, while preserving his right to take legal action.

However, there is an important limitation: the landlord cannot obtain termination of the same lease twice for the same facts. If the resolutory clause has already produced its effect and the tenant has left the premises, the claim for judicial termination becomes moot. Similarly, if the judge has already ordered judicial termination, the resolutory clause no longer has effect. The combination is therefore useful mainly when the clause is challenged or its application is uncertain.

For the future, the trend is towards securing leases: recent reforms (Pinel law, ELAN law) have strengthened tenants' obligations and simplified eviction procedures. But the principle established in 1985 remains a cornerstone of lease law. If you are a landlord, know that you have this dual possibility; if you are a tenant, know that the landlord can attack you on both fronts. The best defence is to comply with your contractual obligations.

Summary and Next Steps

FAQ:

• Q: Can I use the resolutory clause and take the matter to court at the same time? A: Yes, it is perfectly possible and even recommended to secure your action.
• Q: What should I do if my tenant challenges the resolutory clause? A: Do not stop there. Maintain your claim for judicial termination before the court. The judge can decide.
• Q: What is the time limit for acting after non-payment? A: You can serve a formal demand to pay from the first day of non-payment, but it is prudent to wait one month to prove the persistence of the breach.
• Q: Does this rule apply to residential leases? A: Yes, the 1985 case law concerns all leases, whether residential, commercial or professional.
• Q: How much does a judicial termination procedure cost? A: Allow between €2,000 and €5,000 in lawyer's fees, plus bailiff and court costs. But the stakes (unpaid rent, recovery of the premises) often justify this investment.

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In summary, the decision of 29 April 1985 gives you a dual avenue to deal with a defaulting tenant: the resolutory clause and judicial action. Do not neglect either. If you are a landlord in Carentan, Saint-Lô or elsewhere in the Manche, do not hesitate to consult a lawyer lawyer to implement a strategy adapted to your situation.

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