French law on lease renewal compensation

In France, a landlord can refuse to renew a commercial lease but must pay the tenant compensation for the damage caused by this refusal. This compensation covers the market value of the business, along with costs related to moving and reinstallation.

Statute of limitations for compensation claims

The right to claim this compensation is limited by a two-year statute of limitations. The countdown starts from the date the notice of non-renewal becomes effective, as stated in the Commercial Code.

Lawyer's liability in a Paris court case

In a 2023 ruling, the Paris Court of Appeal held a lawyer accountable for not informing her client about the need to file a judicial claim within the two-year period. The client was awarded 500,000 euros in damages and additional fees for the failure.

Compensation and loss of opportunity

The court clarified that compensation awarded to a tenant does not automatically equal the amount the landlord would have paid. Instead, the judge assesses what the tenant would have received had they acted in time, which often results in a loss of opportunity.

Landlord’s right of repentance

If a court sets the compensation, the landlord has fifteen days to exercise their right of repentance after the decision is enforced. This right can be lost if the landlord is not timely informed by their legal counsel.

Legal deadlines for actions against lawyers

An action against a lawyer is subject to a five-year statute of limitations. The starting point depends on the nature of the breach, and the client’s expertise does not exempt the lawyer from the duty to inform them about deadlines.

Practical steps for tenants

Practical advice includes precisely dating the notice of non-renewal and its effective date, reconstructing the timeline of communications with the landlord, and retaining records from previous advisors. Negotiations with the landlord do not extend the two-year deadline.

Legal actions after the deadline

Even if a tenant left without compensation, they may still take legal action against the lawyer if the five-year statute of limitations for such actions has not expired.