Commercial lease or furnished lease: the Court of Cassation rules on jurisdiction and limitation period

Imagine: you are the owner of a commercial premises in Castelnau-le-Lez, let to a trader for years. One day, you give him notice to quit to recover the premises. But he claims it is a protected commercial lease and demands an eviction indemnity. You start proceedings to validate the refusal of renewal. He, for his part, seises the tribunal d'instance to contest the notice and asks to be recognised as a commercial tenant. Two proceedings, two courts, two timetables. How far can this go? The question every owner asks: can the tenant play both sides?

The Court of Cassation, in its judgment of 26 March 2014 (no. 12-24.203), gives a clear answer: when the two actions pursue the same purpose — obtaining the right to remain in the premises — they are linked. And above all, the claim for recognition of a commercial lease interrupts the two-year limitation period for contesting the notice. This means that a tenant who has already seised the tribunal de commerce or the tribunal de grande instance to have a commercial lease recognised can, even after two years, still contest the notice before the eviction judge.

This decision, made in favour of a tenant, has major consequences for landlords: it requires them to be vigilant about the classification of the lease from the outset and about compliance with procedures. In Montpellier as elsewhere, prevention is better than cure.

The facts: a story that happens every day

Mr X, owner of commercial premises in Montpellier, had orally let premises to Mr Y, who had been carrying on a commercial activity there for several years. In 2007, Mr Y requested renewal of his commercial lease. The owner refused and served a notice to quit. Mr Y then seised the tribunal de grande instance to have a commercial lease recognised and to obtain an eviction indemnity.

At the same time, the owner started proceedings to validate the refusal of renewal and for eviction before the tribunal d'instance. But he encountered an objection of lack of jurisdiction raised by the tenant, who argued that the dispute was commercial in nature and therefore fell within the jurisdiction of the tribunal de commerce. The tribunal d'instance declared itself incompetent. The owner appealed.

In the meantime, the tenant, in the eviction proceedings, claimed by way of counterclaim an eviction indemnity. The tribunal d'instance, after declaring itself incompetent on the merits, had already ruled on the counterclaim. The cour d'appel of Rennes, seised, had to decide: was the two-year limitation period for contesting the notice interrupted by the prior claim for recognition of a commercial lease?

The cour d'appel answered yes, and the Court of Cassation confirmed it. For the judges, the two actions — one for recognition of a commercial lease, the other for contesting the notice — pursue one and the same purpose: to be recognised as having a right to remain in the premises. They are therefore indivisible. The limitation period was interrupted by the first claim.

The reasoning of the court — explained

The reasoning of the Court of Cassation revolves around two key concepts: interruption of the limitation period and unity of the dispute.

First, the two-year limitation period provided for by Article L. 145-60 of the Commercial Code for actions relating to commercial leases. In principle, a tenant contesting a notice must act within two years of its service. But Article 2241 of the Civil Code (formerly 2244) provides that a claim in court interrupts the limitation period, even if it is brought before an incompetent court.

Here, the tenant had, on 18 December 2007, seised the tribunal de grande instance to have a commercial lease recognised. This claim, although brought before an incompetent court (the tribunal de commerce would have been competent), was valid to interrupt the limitation period. The question was therefore whether it also interrupted the limitation period for the action contesting the notice, which is a separate action.

The Court of Cassation answers in the affirmative because of the unity of the purpose pursued. The two actions, although procedurally distinct, tend towards the same result: allowing the tenant to remain in the premises. Therefore, the first claim interrupted the limitation period for the second.

In doing so, the Court of Cassation demonstrates pragmatism: it prevents the tenant from losing his right to remain in the premises for a mere matter of form. But it also warns landlords: a poorly initiated procedure can be nullified by a prior action of the tenant.

Note that the Court of Cassation does not create a new rule, but applies a broad interpretation of the interruption of the limitation period, already accepted by prior case law. It thus confirms a trend favourable to the tenant, but which may surprise the unwary landlord.

What this changes for you — practically

For landlord owners, this decision is a wake-up call: if you give notice to a tenant who has already started an action for recognition of a commercial lease, do not rely on the limitation period to gain time. You must be reactive and check that no parallel proceedings are ongoing.

Take a concrete example: you own premises in Castelnau-le-Lez. You give notice to your tenant on 1 January 2023. The tenant, who considers he is entitled to a commercial lease, serves a writ on you for recognition of a commercial lease on 15 January 2023. You, in turn, serve a writ on him for validation of the refusal of renewal on 1 March 2024. The tenant can still contest the notice, because his claim of January 2023 interrupted the limitation period. The two-year period starts again from that claim.

For tenants, this is a useful protection: if you have started an action to have your commercial lease recognised, you retain the right to contest a subsequent notice, even if more than two years have passed since the notice. However, be careful: the two actions must pursue the same purpose. If you are simply asking for the rent to be fixed, this does not interrupt the limitation period for contesting the notice.

For property professionals (agents, property managers), this decision reminds us of the importance of correctly classifying the lease from the outset. An oral lease can be reclassified as a commercial lease if the tenant carries on a commercial activity there. A written lease specifying the nature of the contract is better.

Four tips to avoid this type of dispute

• Draw up a written and precise lease: clearly state whether it is a commercial lease, a furnished lease or a residential lease. An oral or ambiguous lease leaves the door open to reclassification by the judge, as in this case.
• Before giving notice, check for ongoing proceedings: ask the tenant in writing or consult the Register of Commerce and Companies (RCS) to find out if he has started an action for recognition of a commercial lease.
• Respect limitation periods: if you wish to contest an action by the tenant, act quickly. Do not wait for the two-year period to expire, because a prior claim by the tenant may have interrupted it.
• If in doubt, seize the right court: if the dispute concerns a commercial lease, jurisdiction lies with the tribunal de commerce (or the tribunal judiciaire for claims over €10,000). An error as to the court delays the procedure and can cost you dearly.

Further reading: related case law and developments

This decision is part of a line of case law favourable to the interruption of limitation periods. The Court of Cassation had already held, in a judgment of 13 February 2013 (no. 11-25.992), that a claim for payment of rent interrupts the limitation period for a claim for termination of the lease, provided that both actions are based on the same contract. Here, it extends the principle to two distinct actions (recognition of lease and contestation of notice) but pursuing the same purpose.

Conversely, some earlier judgments required identity of cause and object for interruption to operate. The current trend is therefore more liberal, which may surprise practitioners. In future, one can expect judges to examine on a case-by-case basis the real purpose of actions, beyond their formal classification.

For owners, this means being particularly vigilant when the tenant multiplies proceedings. Each action can potentially interrupt the limitation period for another connected action. A coordinated defence strategy is essential.

In practice: what to do

1. Check the classification of your lease: if you are an owner in Montpellier, reread your contract. If it is oral or imprecise, have it regularised by a written addendum.
2. Keep all evidence: exchanges of letters, rent receipts, renewal requests. They can be used to prove the nature of the lease.
3. Consult a lawyer before starting proceedings: a simple notice to quit can have unforeseen consequences. A professional will help you choose the right strategy and the right court.
4. In case of a dispute, do not delay: as soon as you receive a writ or a claim from the tenant, react. Time works against you if you let things drag on.
5. Anticipate counterclaims: if you start eviction proceedings, prepare for the tenant to claim an eviction indemnity. Assess the potential amount to decide whether to continue the proceedings or not.

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. Make an appointment →