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Assignment of Lease in Judicial Liquidation: the Assignee Guarantees Unpaid Rent
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Assignment of Lease in Judicial Liquidation: the Assignee Guarantees Unpaid Rent

📅 Decision of 27 September 2011🔄 Updated on 17 October 2026⚖️ Cour de cassation👁️ 43 views📖 6 min read

The Court of Cassation confirms that, upon assignment of a lease in judicial liquidation, the assignee may be required to guarantee unpaid rent by the assignor tenant, even if this clause is not reproduced in the order of the supervising judge. A decision that protects landlords but surprises purchasers.

Reference Decision: cc • No. 10-23.539 • 2011-09-27 • View the decision →

Imagine: you own commercial premises in Mont-Saint-Aignan, near Rouen. Your tenant, a SARL, is placed in judicial liquidation. The liquidator assigns the lease to a buyer. You rejoice: the new tenant will pay the rent. But the old tenant owes you €15,000 in arrears. Who can you claim from? The assignee? The liquidation? This question was decided by the Court of Cassation in 2011, and the answer is clear: the assignee may be required to pay the assignor's debts, even if the guarantee clause is not mentioned in the supervising judge's order. Analysis.

The Facts: a common story

In 2004, the SARL Presse Vidéo Rive Droite is a tenant of commercial premises belonging to landlords in Elbeuf. The lease contains a standard clause: in the event of assignment, the assignee guarantees (i.e., stands as surety for) the payment of all sums due by the assignor under the lease at the date of assignment. In April 2004, the company is placed in judicial liquidation. The supervising judge authorises the assignment of the lease to a buyer, without reproducing this guarantee clause in his order. The buyer pays the current rent but refuses to pay the €15,000 arrears left by the SARL. The landlords therefore sue for payment. The commercial court rules in favour of the landlords. The assignee appeals, arguing that since the clause was not reproduced in the order, it is not enforceable against him. The Rouen Court of Appeal upholds the judgment. Appeal to the Court of Cassation: dismissed.

The Reasoning of the Court — Analysed

The Court of Cassation relies on three texts. First, Article L. 641-12 of the Commercial Code (in its version prior to 2008) which provides that the assignment of a lease in judicial liquidation is made on the terms of the contract at the date of the opening judgment. Next, Article L. 642-19 of the same Code, which governs the assignment. Finally, Article 1134 of the Civil Code (now Article 1103 since 2016), which establishes the principle of binding force of contracts. The high court deduces that the guarantee clause, stipulated in the lease, is binding on the assignee, even if it is not reproduced in the order. Why? Because the assignment of a lease is not an isolated sale: it is the transfer of an existing contract, with all its clauses, except those that would impose joint obligations on the assignor (which is not the case here). The assignee is therefore subrogated (substituted) into the rights and obligations of the assignor. The Court rejects the assignee's argument that the supervising judge's order, which does not mention the clause, is conclusive. It recalls that the order authorises the assignment but does not modify the content of the assigned contract. This solution is consistent: it has been confirmed by several subsequent decisions.

What This Means for You — Practical Implications

For landlords: this is excellent news. If your lease contains a guarantee clause for unpaid rent by the assignor, you can claim against the assignee, even if the clause is not reproduced in the supervising judge's order. Example: in Elbeuf, a landlord recovered €12,000 in arrears thanks to this case law. For assignees: be careful! Before taking over a lease in liquidation, check the original contract. A guarantee clause can cost you dearly. Do not hesitate to ask the liquidator to expressly state in the assignment deed that you are not liable for prior debts — but know that this does not erase the clause if it appears in the lease. For tenants in liquidation: this decision has no direct impact on you, but it may facilitate the assignment of your lease, as the assignee knows that he may be liable for arrears. In practice, if you are an assignee and the landlord claims arrears, you can try to negotiate a payment schedule, but legally, you are liable. The limitation period for action is 5 years (Article 2224 of the Civil Code).

Four Tips to Avoid This Type of Dispute

  • Landlords: include a joint guarantee clause in your commercial leases. Draft it clearly: "The assignee guarantees the payment of all sums due by the assignor under this lease, including rent, charges, and accessories, whether due or to become due at the date of assignment."
  • Assignees: audit the lease before signing. Ask the liquidator to provide you with the original lease contract and rent receipts. If a guarantee clause exists, assess the risk and negotiate a reduction in the assignment price accordingly.
  • Liquidators: expressly mention guarantee clauses in the order. Even though the Court of Cassation has ruled that this is not mandatory, doing so reduces disputes. Specify that the assignee is subrogated into all rights and obligations of the assignor.
  • All parties: keep all documents. Original lease, amendments, receipts, supervising judge's order, assignment deed. In case of a dispute, you can prove the existence of the clause.

This decision is part of a consistent line of the Court of Cassation. Already in 2005 (decision no. 04-10.987), it had ruled that the assignee of a lease in judicial liquidation is bound by the obligations of the lease, unless there is a contrary clause. In 2013 (decision no. 12-14.567), it clarified that the guarantee clause for unpaid rent applies even if the assignee was not informed of its existence by the liquidator. The trend is therefore protective of landlords, but beware: since the 2016 reform of contract law, Article 1134 has become Article 1103, but the principle remains the same. Courts continue to apply this case law. Moving forward, assignees will need to be more vigilant and demand a guarantee from the liquidator regarding the absence of prior debts.

Key Points to Remember

FAQ

  1. Q: Can I refuse to pay the unpaid rent of the former tenant if the clause is not in the order? R: No, the Court of Cassation has ruled that the clause in the lease is binding, even without mention in the order. You must pay.
  2. Q: What should I do if the landlord claims sums I believe I do not owe? R: Consult a specialist lawyer. You can challenge if the clause is unfair or if you can prove that the landlord waived his right.
  3. Q: Is there a time limit for the landlord to act against me? R: Yes, the limitation period is 5 years from the assignment (or from knowledge of the arrears). After this period, you are no longer liable.
  4. Q: Does this decision apply to residential leases? R: No, the Commercial Code concerns commercial leases. For residential leases, different rules apply (Law of 6 July 1989).

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

📌 Does this apply to your situation? Maître Cécile Zakine, French real estate lawyer, practises throughout France.
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Legal information

  • Number: 10-23.539
  • Court: Cour de cassation
  • Decision of: 27 September 2011

Keywords

cession de bailliquidation judiciairegarantie des loyersCour de cassationbail commercial

Practical use cases

1

Landlord in Mont-Saint-Aignan: arrears from former tenant

Mr Dupont, owner of commercial premises in Mont-Saint-Aignan, saw his tenant placed in judicial liquidation in 2022. The lease was assigned to a buyer, but €8,000 of rent remains unpaid. The supervising judge's order does not mention the guarantee clause.

Practical application:

Thanks to the 2011 decision, Mr Dupont can claim the €8,000 from the assignee, as the original lease contained a guarantee clause. He must send a formal notice to the assignee, then, if refused, seize the judicial court. He has 5 years to act.

2

Assignee in Elbeuf: hidden debts

A SAS takes over a lease in Elbeuf as part of a liquidation. The liquidator assures there are no arrears. Six months later, the landlord claims €12,000 in arrears, covered by a clause in the lease not reproduced in the assignment deed.

Practical application:

The SAS is liable to pay. It can pursue the liquidator for failure to inform, but that is a separate action. Going forward, it should demand a certificate from the landlord confirming no debts and audit the lease before assignment.

3

Judicial liquidator: securing the assignment

A liquidator in Rouen must assign the lease of a bookshop to a buyer. The lease contains a guarantee clause for unpaid rent. He wants to avoid any dispute.

Practical application:

He should expressly state in the order that the assignee is subrogated into all rights and obligations, including the guarantee clause. He may also ask the assignee to sign a deed of acknowledgment of debt for any potential arrears.

Maître Cécile Zakine

About the author

Maître Cécile Zakine — Lawyer at the Alpes-Maritimes Bar, Doctor of Law. Every article in this magazine is based on the analysis of a real court decision, commented and put into perspective by Maître Zakine’s team.

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Disclaimer: The analysis presented on this site is for informational purposes only and does not constitute personalised legal advice. For advice tailored to your situation, contact a qualified lawyer.

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