Occupation Compensation: When Does the Limitation Period Really Start?

Imagine: you own a commercial property in Morlaix. Your tenant gives you notice, you pay them eviction compensation (compensation due to the tenant who leaves the premises for loss of their business). But you contest their right to this compensation. For years, you await the final judgment. Meanwhile, the tenant remains in the premises: you claim occupation compensation (increased rent due after the end of the lease). But is your action time-barred (i.e., too late)?

This is precisely the question the Court of Cassation decided in 2012. A question that every owner facing a commercial dispute asks: from when does the period to claim occupation compensation start to run? The answer changes everything.

In this article, I explain this key decision, with concrete examples from Brest and its surroundings. You will know exactly how to protect your rights.

The Facts: A Story That Happens Every Day

Mr. X, owner of a commercial property in Brest, gives his tenant notice to quit for 31 December 2005. In his notice, he offers eviction compensation (sum intended to compensate for the loss of the business). The tenant accepts it in principle but contests the amount. A legal procedure ensues.

During the proceedings, the tenant remains in the premises. Mr. X therefore claims occupation compensation (increased rent, about €1,500 per month for a 50 m² premises in Brest city centre). But the owner waits several years: it is only on appeal that he first contests the tenant's very right to eviction compensation.

The Rennes Court of Appeal, seised of the matter, sets the eviction compensation at €80,000 and orders the tenant to pay the occupation compensation. But the tenant appeals to the Court of Cassation: he argues that the landlord's action for occupation compensation is time-barred because the two-year period (Article L. 145-60 of the Commercial Code) would have started running from the notice.

The central question: from when does this period run?

The Court's Reasoning — Analysed

The Court of Cassation quashes (annuls) the Court of Appeal's decision. It sets out a fundamental principle: "The limitation period for the landlord's action for payment of occupation compensation based on Article L. 145-28 of the Commercial Code cannot begin to run before the day on which the tenant's right to benefit from eviction compensation is definitively established in principle."

In other words, as long as the right to eviction compensation is not definitively established (by an irrevocable judgment), the landlord cannot act to fix the occupation compensation. The limitation therefore only runs from that date.

In this case, the Court of Appeal itself had ruled on the challenge to the right to eviction compensation raised by the landlord. It could not therefore declare the action for occupation compensation time-barred, since the principle of the right was not yet final.

undefined, I have encountered cases where owners lost thousands of euros because they delayed claiming occupation compensation, believing the period had already expired. This decision protects them.

What few people know is that occupation compensation and eviction compensation are linked: the former is due as long as the latter is not fixed. The landlord must therefore be able to wait for the final decision on the right to eviction compensation before quantifying the occupation compensation.

What This Changes for You — Practically

For the landlord: You can now claim occupation compensation without fear of being time-barred, as long as the right to eviction compensation has not been finally decided. Example: in Brest, a commercial premises of 80 m² rented at €1,000/month could generate occupation compensation of €1,500 to €2,000 per month. Over three years, that represents €54,000 to €72,000. A significant stake.

For the tenant: You must know that the landlord can claim occupation compensation even long after you leave, if the dispute over eviction compensation is not closed. Anticipate by provisioning sums.

For the purchaser of a commercial property: Check whether a dispute over eviction compensation is ongoing. The seller might still owe occupation compensation, which affects the value of the property.

Practical advice: if you are a landlord, as soon as you give notice and the tenant contests the eviction compensation, initiate proceedings to fix the occupation compensation. Do not wait for the end of the main dispute.

Four Tips to Avoid This Type of Dispute

• 1. Draft a precise notice: clearly state that you offer eviction compensation, but also that you claim occupation compensation from the end of the lease. This avoids any ambiguity.
• 2. Seise the judge quickly: as soon as the tenant contests the amount or principle of eviction compensation, apply for an interim order (urgent procedure) to fix the occupation compensation. Do not let months pass.
• 3. Keep all evidence: exchanges of letters, emails, bailiff's reports. The date on which the right to eviction compensation becomes final is crucial.
• 4. Consult a lawyer lawyer: commercial law is technical. A professional will save you from irreversible procedural errors.

Further Details: Related Case Law and Developments

This 2012 decision is part of a line of protection for landlords. The Court of Cassation had already ruled, in 2009 (Civ. 3e, 4 March 2009, No. 07-21.815), that the limitation period for occupation compensation only runs from the termination of the lease. Here, it refines: it is not the termination that triggers the period, but the final decision on the right to eviction compensation.

Since then, the trend is consistent: judges consider that the landlord cannot act before being certain of the principle of eviction compensation, because its amount is linked. In 2015, a Paris Court of Appeal decision even extended this reasoning to cases where the tenant leaves the premises without right: occupation compensation is due until the eviction compensation is fixed.

However, note: if the right to eviction compensation is definitively recognised, the landlord must then act within two years. Do not delay.

What You Absolutely Must Remember

FAQ:

• From when does the period to claim occupation compensation start to run? From the final (irrevocable) decision recognising the tenant's right to eviction compensation.
• What to do if the tenant contests their right to eviction compensation? Immediately initiate an action to fix the occupation compensation, even if the main dispute is not over.
• Can I claim occupation compensation for the entire period after the notice? Yes, from the date of the end of the lease until the actual vacation of the premises.
• What is the amount of occupation compensation? Generally, the rent increased by 50 to 100%, depending on the location and nature of the premises. In Brest, expect 1.5 to 2 times the rent.
• Must I necessarily go through a lawyer? Yes, before the judicial court or the commercial court. A lawyer specialised in property law is recommended.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) could save you months of procedure — and often much more. Book an appointment →