Sub-tenant's notice to quit a commercial lease: nullity for form? Cassation 2019

Imagine: you are the tenant of a commercial property in Vauvert, you have run your shop for three years, and you wish to leave. You send a registered letter to your landlord informing him that you are vacating the premises at the next triennial term. Everything seems normal, doesn't it? Yet your landlord might challenge the validity of your notice, arguing that it should have been served by a bailiff. The question is crucial: what form must a notice given by a sub-tenant follow?

This is precisely the issue that the Court of Cassation decided on 24 October 2019 (no. 18-24.077). The case pitted a sub-tenant, the company Lecorps services, against its head landlord. The sub-tenant had given notice by registered letter for the triennial term. The Court of Appeal had annulled this notice, holding that only a bailiff's act was valid. The Court of Cassation quashed this judgment, recalling that Article L.145-4 of the Commercial Code (which governs the triennial notice) allows registered letter.

This decision is a breath of fresh air for tenants and sub-tenants: a simple registered letter suffices to terminate a commercial lease at a triennial term, unless the contract provides otherwise. But beware, the rules differ depending on whether it is a notice at the initiative of the tenant or a notice to sell. Let us decipher this decision and its practical implications together.

The facts: a story like many that happen every day

The company Lecorps services was a sub-tenant of commercial premises located in Uzès, in the Gard. It had signed a commercial lease with the landlord company, which itself was the head tenant. In 2016, the sub-tenant decided to vacate the premises. It sent to its head landlord a registered letter with acknowledgement of receipt, dated 16 May 2016, informing him that it was giving notice for the triennial term of 1 September 2016.

The head landlord contested. He brought proceedings before the Tribunal de grande instance of Nîmes to have this notice declared void, arguing that the law requires a bailiff's act (extrajudicial act). According to him, Article L.145-9 of the Commercial Code, in its version resulting from the law of 6 August 2015, requires that any notice be served by extrajudicial act. The sub-tenant retorted that Article L.145-4, specific to the triennial notice, allows registered letter.

The tribunal ruled in favour of the landlord: judgment of 19 July 2017, the notice was void. The sub-tenant appealed. The Court of Appeal of Nîmes confirmed on 12 July 2018: in its view, a notice terminating a commercial lease can only be given in the forms provided for by Article L.145-9, i.e. by bailiff's act. The sub-tenant appealed to the Court of Cassation. The Court of Cassation upheld the appeal on 24 October 2019, quashing the appellate judgment.

The reasoning of the court — explained

The Court of Cassation relies on Article L.145-4 of the Commercial Code, in its wording resulting from Law No. 2015-990 of 6 August 2015. This text provides that the tenant (lessee) may give notice at the expiry of a triennial period by registered letter with acknowledgement of receipt or by extrajudicial act. This is a special provision, derogating from the common law of commercial leases.

The Court of Appeal had applied Article L.145-9, which requires an extrajudicial act for any notice. But the Court of Cassation recalls that Article L.145-4 is an exception: it expressly allows registered letter for the triennial notice. Moreover, the law of 6 August 2015 abolished the requirement of an extrajudicial act for this type of notice, in order to simplify formalities for small traders.

In this case, the sub-tenant had complied with the formalities: registered letter, six-month notice period before the term. The Court of Appeal therefore violated the law by requiring a bailiff's act. The Court of Cassation does not rule on the merits (validity of the notice) but refers the case to another Court of Appeal to decide in light of this principle. This is a confirmation of the wording of Article L.145-4, not a reversal: the Court had already so held in a judgment of 6 July 2017 (no. 16-15.036).

What this changes for you — practically

For tenants and sub-tenants: you can give notice at a triennial term by simple registered letter. Savings: a bailiff's act costs between €150 and €200. In Uzès, a trader who wants to leave his 80 m² premises can thus save this amount. Warning: the notice period is six months before the term. If you send your letter too late, the notice is void.

For landlords: you can no longer challenge a triennial notice on the ground that it was not served by bailiff. But check that the tenant has complied with the other conditions: notice period, content of the notice (mention of reasons?). If the lease contains a clause requiring an extrajudicial act, is it valid? The Court of Cassation did not say, but in principle a more stringent clause is possible.

For sub-tenants: the decision is even more favourable. A sub-tenant is a lessee like any other. He benefits from the same rules. So, if you are a sub-tenant, a registered letter suffices. But beware: the sub-lease must be regular (authorised by the head lease).

Four tips to avoid this type of dispute

• Check your lease contract: some clauses impose additional formalities (bailiff's act, longer notice period). If so, comply with them, because contractual freedom prevails, unless the clause is abusive.
• Strictly observe the deadlines: the triennial notice must be given at least six months before the term. For a lease starting on 1 January 2019, the first triennial term is 1 January 2022: send your letter before 1 July 2021.
• Keep proof of sending: registered letter with acknowledgement of receipt is proof. Keep the receipt and the acknowledgement. If the landlord refuses to collect it, the period runs from the first presentation.
• Get assistance: if in doubt, a lawyer specialised in property law can draft your notice. In Nîmes or Uzès, a 30-minute consultation (€45) can save you months of proceedings.

Further: related case law and developments

The Court of Cassation had already ruled in the same sense on 6 July 2017 (no. 16-15.036): for a triennial notice, registered letter suffices. This decision therefore confirms a consistent line. On the other hand, for a notice at the initiative of the landlord (refusal to renew, termination), the bailiff's act remains mandatory (Article L.145-9).

The Pinel Law of 18 June 2014 also relaxed the formalities: since 2014, the triennial notice can be given by registered letter. The law of 6 August 2015 specified that this option also applies to sub-tenants. The trend is therefore towards simplification, to make life easier for traders.

Warning: if the head tenant gives notice, this terminates the sub-lease. But the sub-tenant can then turn against his head landlord to claim damages. Recent case law (Civ. 3e, 12 May 2021, no. 20-13.756) has clarified that the sub-tenant can claim an eviction indemnity if the head lease is terminated without fault on his part.

Frequently asked questions

Can I give notice by email? No, the law requires a registered letter with AR or a bailiff's act. A simple email has no certain legal value.

What to do if my landlord refuses to recognise my notice? Summon him before the Tribunal judiciaire to have the validity of the notice declared. You can claim damages for abusive resistance.

Is the triennial notice possible at any time? No, only at the triennial term. If you want to leave before, you must negotiate a mutual termination or find a buyer for the lease.

What is the time limit to challenge a notice? The landlord has a period of two years from the date of the notice to bring an action for nullity. After this period, the action is time-barred.