Sale by Lots of More Than 10 Dwellings: Nullity of Notices for Formal Defect

Imagine: you are a tenant in Cuincy, an apartment you have occupied for ten years. One day, your landlord tells you he is selling the building by lots and gives you notice to quit. You wonder if this is legal. And what if the landlord had not complied with all the mandatory formalities? The question is crucial: can a simple procedural error invalidate the entire notice?

The Court of Cassation answered in the affirmative in this judgment of 24 June 2009. It reminds us that certain formalities are of public policy (i.e., they cannot be disregarded by the parties) and must be completed before the service of notices to sell, even if the decision to sell was taken before the entry into force of the collective agreement that imposes them.

Specifically, a landlord who sells more than ten lots in the same building must comply with preliminary obligations (information to tenants, consultation, etc.). If he does not do so, the notices are void. Analysis of this decision that protects tenants but also imposes increased vigilance on landlords.

The Facts: A Story That Happens Every Day

The City of Paris, owner of a building located at 12 rue des Nonnains-d'Hydres, decides to sell the entire building by lots, which contains more than ten dwellings. In 2005, it serves notices to sell to several tenants, including Mrs. X. These notices are served in the context of a sale by lots, falling within the scope of the collective agreement of 9 June 1998, made mandatory by decree of 22 July 1999.

Mrs. X contests the validity of the notices. She argues that the City of Paris did not comply with the mandatory formalities provided for by this agreement, notably the prior information of tenants and consultation of tenants' representatives. The City argues that the decision to sell was taken before the agreement came into force, so these formalities would not apply to it.

The dispute goes up to the Paris Court of Appeal, which rules in favour of the tenant: the notices are annulled. The City appeals to the Court of Cassation. The Court of Cassation dismisses the appeal and confirms the nullity. Mrs. X's story, who could have lost her home, ends well thanks to judicial rigour.

The Reasoning of the Court — Explained

The Court of Cassation relies on the collective agreement of 9 June 1998, made mandatory by Decree No. 99-628 of 22 July 1999. This agreement requires landlords who sell more than ten dwellings in the same building to comply with preliminary formalities before serving notices: information to tenants about the sale project, consultation of the tenants' council or tenants' representatives, etc. These formalities are described as public policy (they are binding on everyone, even if the landlord and tenant decide otherwise).

The City of Paris claimed that since the decision to sell predated the entry into force of the agreement, the formalities did not apply. The Court rejects this argument. It distinguishes between the decision to sell (which may be earlier) and the sale by lots operation (which is materialised by the notices). The formalities apply to operations in progress when the agreement comes into force, i.e., sales that were not yet completed. Since the notices were served after the agreement came into force, the formalities had to be observed.

The Court also recalls that the nullity of the notices arises as soon as the formalities have not been observed, regardless of whether the sale was decided earlier. This is a protective solution for tenants, which prevents mass sales from taking place behind their backs without prior information.

What This Means for You — Practically

For tenants: if you receive a notice to sell in the context of a sale by lots of more than ten dwellings, check that your landlord has complied with the preliminary formalities. For example, in Denain, a building of 15 dwellings put up for sale: the landlord must inform you in writing of the project, consult you, and respect a deadline. If he has not done so, the notice can be annulled, and you can stay in the premises. Do not hesitate to consult a lawyer to verify the regularity.

For landlord-proprietors: if you are selling more than ten lots in the same building, even if your decision to sell dates from before 1999, you must comply with the formalities of the agreement. Non-compliance leads to the nullity of the notices, which delays the sale and can be costly. For example, a landlord in Cuincy who started a sale by lots in 2008 without informing the tenants had to restart the entire procedure, losing six months and legal fees.

For purchasers: if you are buying a building by lots, ensure that the notices served to the tenants are valid. An annulled notice can block the sale or expose you to a claim. Demand a certificate from the seller regarding compliance with the formalities.

Four Tips to Avoid This Type of Dispute

• Before serving a notice to sell, check the number of lots sold in the building: if you are selling more than ten lots, the collective agreement applies. Consult Decree No. 99-628 of 22 July 1999 for the exact formalities.
• Inform tenants in writing at least six months before serving the notice: specify the sale by lots project, the number of lots, and the terms. Keep proof of receipt (registered letter with acknowledgment of receipt).
• Consult the tenants' council or tenants' representatives: meet with them and gather their opinion. Even if the opinion is not binding, its absence can lead to nullity.
• Engage a lawyer specialised in property law: a professional will check the compliance of your procedure. The cost of a consultation (£45) is trivial compared to the costs of litigation.

Further Reading: Related Case Law and Developments

This decision is part of a line of cases protecting tenants. The Court of Cassation had already held, in a judgment of 17 January 2008 (No. 06-21.123), that the formalities of the agreement applied to ongoing sales, thus confirming a broad interpretation. Conversely, some lower courts had previously held that the agreement applied only to sales started after its entry into force. The Court of Cassation puts an end to this divergence.

Since 2009, the trend has been towards strengthening tenants' rights in the face of sales by lots. The Alur law (2014) even extended these obligations to certain buildings with fewer than ten lots. Landlords must therefore be vigilant: a simple omission can be costly. In the future, we can expect courts to continue severely sanctioning failures to comply with mandatory formalities.

Checklist Before Acting

• Have I checked if the sale concerns more than ten lots? Yes / No → If yes, the agreement applies.
• Have I informed the tenants in writing of the sale by lots project? Yes / No → If no, do not serve a notice before doing so.
• Have I consulted the tenants' representatives (tenants' council or other)? Yes / No → If no, organise a meeting.
• Were the notices served after the completion of these formalities? Yes / No → If no, the notices are void.
• Have I kept evidence (letters, minutes)? Yes / No → Keep them in case of a challenge.

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