A commercial tenant who withholds rent because of the landlord's breaches may raise the exception of non-performance against the termination clause (clause résolutoire). The third civil chamber holds that a judge hearing an application for a declaration that the clause has taken effect must review whether that exception is well founded, for each of the rents covered by the notice to pay (commandement de payer), regardless of whether the tenant applied for time to pay within the month following its service.
The essentials
- The exception of non-performance entitles a commercial tenant to refuse payment of rent where the landlord's breaches make the premises unfit for the use for which they were intended.
- A judge hearing an application for a declaration that the termination clause has taken effect must review whether the exception of non-performance raised by the tenant is well founded.
- The absence of an application for time to pay within one month of service of the notice to pay does not deprive the tenant of the right to rely on the exception of non-performance.
- The review is individualised: the judge examines, for each of the rents claimed in the notice to pay, whether the tenant was entitled to refuse payment.
- An automatic termination clause takes effect only one month after a notice to pay that has gone unheeded, that period having to be stated in the notice on pain of nullity (Article L. 145-41 of the French Commercial Code).
Rent withheld in premises unfit for their intended use
The dispute is between a landlord and its commercial tenant over unpaid rent in premises affected by persistent defects. The third civil chamber ruled on 5 March 2026 (Civ. 3e, 5 March 2026, No. 24-15.820). In 2016, an SCI (French real estate company) let mixed-use premises, commercial and residential, under a commercial lease. The landlord served on the tenant a notice to pay referring to the termination clause in the lease and covering unpaid rent. The tenant vacated the premises in February 2020, following an order in summary proceedings (référé) declaring that the clause had taken effect, an order which was later overturned.
The landlord brought proceedings against the tenant seeking a declaration that the lease had been automatically terminated and payment of rent, occupation indemnity (indemnité d'occupation) and repairs for which the tenant was liable. The tenant brought counterclaims for damages. The decision under appeal (CA Cayenne, 26 February 2024, No. 22/00390) declared that the termination clause had taken effect, holding that reliance on the exception of non-performance was of no avail: within one month of the notice to pay, the tenant had neither paid the rent nor applied to the court for suspension of the effects of the clause.
The third civil chamber quashes that decision in part: the lower court judges could not declare that the clause had taken effect without examining whether the tenant was entitled to raise an exception of non-performance for each of the rents claimed in the notice to pay. The court of appeal had nonetheless found defects attributable to the landlord, which made the building unfit for its commercial and residential purpose, and found that they persisted until the end of the occupation. The case returns to the Cayenne court of appeal, differently constituted.
The decision cites Article 1184, first paragraph, of the French Civil Code, in its wording prior to that resulting from Order No. 2016-131 of 10 February 2016, Articles 1719 and 1728 of the same code, and Article L. 145-41 of the French Commercial Code. The rule is stated in the following terms (free translation):
Where, having been sued by the landlord for a declaration that a termination clause has taken effect on account of the non-payment of rent within the month following service of a notice to pay, the tenant raises an exception of non-performance, the judge must review whether it is well founded, regardless of whether the tenant applied to the court for time to pay within the month of service of the notice to pay.
The decision also censures a contradiction between the reasoning and the operative part. The appeal judges had upheld the inadmissibility of the claim for compensation brought by the president of the tenant company in respect of their non-pecuniary loss and damage to image, while holding in their reasoning that the claim was unfounded. Under Article 455 of the French Code of Civil Procedure, a contradiction between the reasoning and the operative part is equivalent to a failure to give reasons.
The exception of non-performance against the termination clause
A commercial tenant who raises the exception of non-performance requires the judge to examine its complaints before declaring that the termination clause has taken effect. The exception of non-performance is the right of a party to suspend performance of its obligation where the other contracting party fails to perform its own. Applied to a commercial lease, it allows the tenant to refuse payment of rent where the landlord's breaches make the premises unfit for the intended use.
The expiry of the one-month period following the notice to pay therefore does not close the debate on the condition of the premises. The court of appeal had held the tenant's inaction against it: having neither paid nor applied to the court within that period, the tenant lost, in its view, the benefit of its complaints. The third civil chamber rejects that reasoning and requires an examination on the merits of the breaches alleged against the landlord.
The examination required of the judge is individualised. The judge does not make an overall assessment of the contractual relationship: for each of the rents covered by the notice to pay, the judge verifies whether the tenant was entitled to refuse payment. An exception justified for some instalments is not necessarily justified for all. A tenant who withholds all of its rent therefore risks the judge finding arrears for the instalments not covered by the exception.
What impact for ongoing commercial leases?
The solution confirms the effectiveness of the exception of non-performance in commercial lease matters and requires a review on the merits before any declaration of termination. The decision restates a solution already adopted by the third civil chamber: the tenant may refuse to pay rent from the day on which the premises are, because of the landlord's breach, unfit for the use for which they were intended, without prior formal notice (mise en demeure) (Civ. 3e, 18 September 2025, No. 23-24.005, cited by the decision).
The contribution lies in the interaction with the mechanism of Article L. 145-41 of the French Commercial Code. That provision states that an automatic termination clause takes effect only one month after a notice to pay that has gone unheeded, that period having to be stated in the notice on pain of nullity. It also allows the judge, hearing an application made in the forms of Article 1343-5 of the French Civil Code, to grant time and to suspend the effects of the clause, for as long as termination has not been declared by a decision having res judicata effect.
That option of applying for time to pay is not the tenant's only line of defence. The question of the extent of the justified suspension remains open: the decision requires a rent-by-rent review, without setting any numerical criterion of proportionality between the landlord's breach and the amount retained. The court to which the case is remitted will assess these matters; the outcome of the dispute is not prejudged by the partial quashing handed down.
What steps for the landlord and the tenant?
The landlord must deal with defects before serving a notice to pay, and the tenant must date and document each breach it relies on. A valid notice to pay is no longer enough to secure a declaration of termination where the tenant establishes defects attributable to the landlord. The response to requests for works, the works carried out and their dates are decisive elements of the court debate.
For the tenant, withholding rent remains a calculated risk. The refusal to pay must relate to specific defects, to an identified period and to a genuine impairment of the use of the premises. A suspension announced in writing, reasoned and instalment by instalment, is easier to defend than an overall and silent stop to payments, which the judge may accept only in part.
The checks to carry out as soon as the notice to pay arrives
A tenant served with a notice to pay referring to the termination clause first checks that the document states the one-month period required on pain of nullity by Article L. 145-41 of the French Commercial Code. It then identifies, rent by rent, the instalments for which the premises were unfit for the agreed use, gathering dated reports, letters and technical documents. The landlord, for its part, gathers evidence of the works carried out and of the responses given to complaints before starting proceedings. Each party should bear in mind that the judge will review whether the exception of non-performance is well founded, even where no application for time to pay was made within the month of the notice to pay.
Frequently Asked Questions
Can I stop paying rent if my commercial premises are unusable?
Yes, where the landlord's breaches make the premises unfit for the use for which they were intended. The tenant may then raise the exception of non-performance and refuse payment from that date, without prior formal notice, under the case law restated by the decision of 5 March 2026. The judge will then review whether that refusal was well founded, instalment by instalment, on the evidence produced.
Can a judge declare termination without examining my complaints against the landlord?
No. Where a landlord applies for a declaration that the termination clause has taken effect, the judge must review whether the exception of non-performance raised by the tenant is well founded. The decision of 5 March 2026 quashes a court of appeal ruling that had declared the clause acquired without examining whether the tenant was entitled to refuse payment of each rent claimed in the notice to pay, although defects attributable to the landlord had been found.
Must I apply to court within one month of the notice to pay to defend myself?
No: an application for time to pay is not a precondition for raising the exception of non-performance. Article L. 145-41 of the French Commercial Code allows the judge, seised in the forms provided by Article 1343-5 of the French Civil Code, to grant time and suspend the effects of the termination clause for as long as it has not been declared to have taken effect by a decision having res judicata effect. A tenant who has not taken that route retains its complaints.
How do I prove that leased premises are unfit for their intended use?
Proof rests in principle on objective, dated evidence: reports drawn up by a commissioner of justice, technical surveys, photographs, written exchanges with the landlord, statements from employees or customers. The tenant has an interest in establishing the reality of the defects, the fact that they are attributable to the landlord, and the precise period during which they affected the use of the premises, instalment by instalment.
Is it better to withhold all of the rent or only part of it?
In principle, the refusal to perform must remain proportionate to the seriousness of the breach suffered. A tenant who stops all payment while the premises remain partly usable risks the judge finding arrears for the unjustified fraction. A proportionate suspension, announced in writing and supported by reasons, is easier to defend before the judge.