How To Justify The Non-Payment Of Commercial Rents During The Health Crisis?

• Published date: 01 July 2021
• Subject Matter: Food, Drugs, Healthcare, Life Sciences, Real Estate and Construction, Landlord & Tenant - Leases
• Law Firm: Soulier Avocats
• Author: Ms Catherine Nommick

Focus on a recent decision of the Enforcement Judge who relieved a lessee from its obligation to pay the rents.

The payment of commercial rents during successive lockdown periods is an issue that has given rise to numerous disputes.

Arguments based on force majeure, unforeseeability (a French law concept close to that of hardship) or non-performance, often used by lessees as a justification for not paying rents, have been dismissed in the majority of court decisions handed down on this subject. In this context, the preferred course of action seemed to be the renegotiation of the lease agreement, as per the principle of good faith that governs the performance of contracts.

However, on January 20, 2021, the Enforcement Judge of the Paris Judicial Court (No. RG 20/80923) opened up another way in ruling that the legal impossibility of operating the leased premises during the term of the lease, resulting from a decision of the public authorities, is comparable to the loss of the leased property, as provided for in Article 1722 of the...