Termination by the court of a commercial lease: when to prefer it to the termination clause

An institutional landlord who finds three quarters of rent unpaid, an unauthorised sub-letting or premises that have been closed for six months rarely has a single way out. It has at least two: to rely on the termination clause (clause résolutoire) by serving a formal notice (commandement), or to issue proceedings for termination by the court. The reflex is to prefer the first, which is reputed to be faster and automatic. Since Article L. 145-41 of the French Commercial Code was rewritten by Act No. 2026-403 of 26 May 2026 on the simplification of economic life, that choice deserves to be reconsidered: the conditions for granting grace periods have tightened, but the formal requirements of the commandement remain as heavily penalised as before. This analysis compares the two levers from the landlord's point of view: what the real time limit is, what exposure to procedural risk there is, what the effective date is, and in which configurations termination by the court remains the better option.

Three routes to termination, three risk regimes

The general law of contracts, in the version resulting from Order No. 2016-131 of 10 February 2016, clearly distinguishes the grounds. Article 1224 of the French Civil Code provides that termination results either from the application of a termination clause or, in the event of sufficiently serious non-performance, from a notification by the creditor to the debtor or from a court decision.

Three levers, then, but not three equivalents in commercial leases.

The termination clause rests on the will of the parties: the breach was defined in advance in the contract, the judge in principle does not have to assess its seriousness, and simply records it. In return, the commercial lease statute strictly regulates how it is triggered.

Termination by the court rests on Article 1227 of the French Civil Code: Termination may, in any event, be sought from the court. The words in any event are decisive for the landlord: the existence of a termination clause in the lease does not deprive the creditor of the judicial route. The landlord therefore retains a right of option, and that right of option is the very subject of the choice discussed below.

Unilateral termination by notification under Article 1226 of the French Civil Code is the third route. In practice, it is to be ruled out for a commercial lease with high stakes. The text allows it at the creditor's own risk, requires, save in urgent cases, a prior formal demand expressly mentioning the option to terminate, and then a reasoned notification. Above all, the debtor may at any time apply to the court, and the creditor must then prove the seriousness of the non-performance. For an institutional landlord, this amounts to bearing the burden of proof before a judge seized by the tenant, after having already retaken possession or stopped performing. The exposure is disproportionate to the time saved.

The commandement invoking the termination clause: formal requirements that allow no mistakes

The foundation of Article L. 145-41, unchanged

The first paragraph of Article L. 145-41 of the French Commercial Code remains the central safeguard.

Any clause in the lease providing for termination by operation of law takes effect only one month after a commandement that has remained without result. The commandement must, on pain of nullity, mention this time limit.

Two operational consequences. First, a termination clause in a commercial lease never takes instant effect: one month separates service of the commandement from the clause taking effect. Second, omission of the mention of the time limit is penalised by the nullity of the commandement to pay in a commercial lease, which destroys the entire sequence and requires the process to start again.

This regime is a matter of public policy. Article L. 145-15 of the French Commercial Code, in the version resulting from Article 62 of Act No. 2026-403 of 26 May 2026, deems unwritten any clauses, stipulations and arrangements whose effect is to defeat, in particular, the provisions of Articles L. 145-37 to L. 145-41. No drafting of a lease, however favourable to the landlord, can therefore shorten the one-month period or neutralise the court's power of suspension. Termination clauses drafted in terms of immediate effect are, on this point, ineffective.

Beyond the mention of the time limit, the requirements as to the form and content of the commandement (service by a commissaire de justice (bailiff), precise reference to the clause relied on and to each breach alleged, statement of the sums claimed) derive from demanding case law. The practical rule is worth recalling: a commandement covers what it covers. A breach not set out in the document cannot found the clause taking effect. Likewise, the condition of the landlord's good faith in implementing the clause is a classic ground of challenge for the tenant, with no text but with abundant case law. The statements on which the clause taking effect depends and the grounds on which the document lapses are set out in our article on the formal requirements of the commandement invoking the termination clause.

What Act No. 2026-403 of 26 May 2026 changes

The second sentence of Article L. 145-41 allows judges, on an application made in the forms and on the conditions provided for in Article 1343-5 of the French Civil Code, to suspend the operation and effects of termination clauses by granting time, where termination has not been recorded or pronounced by a court decision that has acquired the force of res judicata. And the termination clause does not operate if the tenant discharges the debt on the conditions set by the judge.

Until 27 May 2026, this power of suspension was exercised with no statutory condition other than the reference to the forms of Article 1343-5. The Act of 26 May 2026 adds a sentence that changes the economics of the litigation:

The grant of time to pay and the suspension of the effects of the termination clause for non-payment of rent are, moreover, made conditional on the tenant's ability to settle the rent debt and on resumption of payment in full of the current rent before the date of the first hearing.

Two cumulative conditions, then, for non-payment of rent alone: a demonstrated ability to clear the arrears, and resumption of payment of the current rent in full before the first hearing. The judge's power can no longer be presented as discretionary and unconditional. For the landlord, the litigation lever shifts: it is no longer only a matter of demonstrating the unpaid rent, but of documenting the absence of resumed payment of current rent and the tenant's financial inability to keep to a payment schedule.

The way in which these two conditions are to be assessed is not defined by the text and, to date, there is no published case-law framework. Ability to settle the rent debt should logically be assessed on accounting documents, and resumption of full payment on bank statements on the eve of the hearing, but these readings remain to be confirmed. A prudent landlord will, from service of the commandement, build a file monitoring receipts, instalment by instalment, so as to be able to establish at the hearing that the condition of resumption is not met.

Application over time: it is the application for suspension that governs

The text itself sets out how it applies:

This article applies to applications seeking suspension of the effects of the termination clause made from the entry into force of Act No. 2026-403 of 26 May 2026 on the simplification of economic life.

The criterion is neither the date the lease was entered into, nor the date of the commandement, nor the date the debt arose: it is the date on which the application for suspension is made. A commandement served under the earlier text will therefore, if the tenant seeks suspension after 28 May 2026, be subject to the tightened regime. The article is also declared applicable in the islands of Wallis and Futuna.

Measuring the exposure: the time limits of Article 1343-5

The reference in Article L. 145-41 to the forms and conditions of Article 1343-5 of the French Civil Code must be read in full, because it determines the worst case for the landlord.

The judge may, having regard to the debtor's situation and the creditor's needs, defer or spread payment within a limit of two years. The judge may order that the sums deferred bear interest at a reduced rate at least equal to the statutory rate, or that payments be applied first to the principal. The judge may make these measures conditional on the debtor taking steps to facilitate or secure payment of the debt, which gives the landlord ground for negotiation at the hearing: additional security, bank guarantee, surety.

Two effects should be built into the exposure calculation. The judge's decision suspends enforcement proceedings that the creditor may have begun. And the increases in interest or penalties provided for in the event of delay are not incurred during the period set, any contrary stipulation being deemed unwritten. In other words, the payment schedule freezes enforcement and neutralises the late-payment penalty clause over the period. A landlord reasoning in terms of discounted yield must value this freeze: up to two years of carrying cost, without increased default interest, with an immobilised asset.

It is precisely this risk that justifies, in certain configurations, not taking the termination clause route.

Termination by the court: the lever for non-monetary breaches

The grounds

Termination by the court in a commercial lease relies on the general law of leases and contracts. Article 1728 of the French Civil Code sets out the tenant's two main obligations: to use the thing let reasonably, and in accordance with the purpose given to it by the lease, and to pay the rent at the agreed times. Article 1729 provides that if the tenant does not use the thing reasonably, or uses it for a purpose other than that for which it was intended, or such that damage may result for the landlord, the landlord may, according to the circumstances, have the lease terminated.

The scope is therefore wide: unauthorised change of use, irregular sub-letting or assignment, failure to insure, structural works carried out without consent, damage to the premises, nuisance exposing the landlord to co-ownership (copropriété) litigation, failure to trade. For each of these breaches by the tenant, the question is not whether they appear in the lease as a ground of termination by operation of law, but whether they are serious enough to justify termination. That assessment is case-by-case and falls entirely to the court on the merits.

The uncertainty: the judge's moderating power

Article 1228 of the French Civil Code is the provision that every landlord must read before issuing proceedings:

The judge may, according to the circumstances, record or pronounce termination or order performance of the contract, possibly granting the debtor a period of time, or award damages only.

The judge is therefore not bound to pronounce termination once the breach is established. The judge may order performance, with a time limit attached, or confine the decision to compensating the landlord. This is the structural uncertainty of the judicial lever, and it must be weighed with full knowledge: an action for termination badly calibrated to a minor breach can end in a judgment that maintains the lease and in effect confirms the landlord's tolerance.

A strategic corollary: the claim must be framed with a complete set of alternative claims (termination as the principal claim, failing which performance subject to a penalty payment, and damages), and the evidence file must be assembled before the proceedings are issued, not during the case. Reports by a commissaire de justice, formal demand correspondence, co-ownership documents, missing insurance certificates: seriousness is shown by documented accumulation, rarely by an isolated fact.

The effective date, often underestimated

Article 1229 of the French Civil Code fixes the date of effect: termination takes effect either on the conditions provided for by the termination clause, or on the date the debtor receives the notification made by the creditor, or on the date set by the judge or, failing that, on the day proceedings are issued.

For a lease, a contract performed over time, the text provides that where the performances exchanged have had their usefulness as reciprocal performance went on, there is no restitution for the earlier period, and termination is characterised as résiliation. No retroactivity, then, but an effective date that may go back to the day proceedings were issued. This partial retroaction to the date of the proceedings is an under-used argument: it narrows the economic gap between the clause route (effect one month after an unsuccessful commandement) and the judicial route (potential effect on the day proceedings are issued, even if the judgment comes much later). The fate of the occupation indemnity, the security deposit and the penalty clause after termination is not governed by the texts cited above and is settled by the contract and by case law.

Decision grid: which lever, in which configuration

The termination clause remains the reference lever where the breach is monetary, liquidated and documented, and the tenant manifestly lacks the ability to discharge the debt. The commandement to pay in a commercial lease is quick, inexpensive, and has an incentive effect on payment that is sometimes sufficient on its own. The 2026 tightening reinforces its reach for unpaid rent, since suspension can no longer be taken for granted by a tenant who has not resumed payment of the current rent in full before the first hearing.

Termination by the court, on the other hand, is called for in several configurations.

• The breach is non-monetary and is not covered by the lease's termination clause, or is covered in terms too imprecise to support a commandement.
• The breach is monetary but intertwined with disputes (re-invoiced service charges, works that are the landlord's responsibility, set-off relied on): a contested commandement exposes the landlord to nullity and to damages, whereas proceedings on the merits make it possible to clear everything at once.
• The landlord wishes to combine, in a single set of proceedings, termination and compensation for the loss suffered, including for older breaches.
• The tenant manifestly has the financial capacity to obtain time to pay, and the clause route would risk ending in a two-year payment schedule with enforcement proceedings frozen.
• The landlord has let time pass and fears an allegation of tolerance: a formal demand before proceedings, followed by an action on the merits, makes it possible to rebuild a chronology of non-waiver.

Nothing prevents combining them: serving the commandement and, in parallel or in the alternative, bringing an action on the merits for termination by the court for non-monetary breaches. Article 1227 allows this in any event.

On jurisdiction, Article R. 145-23 of the French Commercial Code reserves to the president of the judicial court (tribunal judiciaire), ruling on written submissions, only disputes relating to the fixing of the rent of a revised or renewed lease; other disputes are brought before the judicial court, that of the place where the building is situated. The statute therefore does not provide a specific summary route for the termination clause: applying to the summary proceedings judge (juge des référés) to have the clause recorded as having taken effect falls under the ordinary law of procedure and case law.

Collective proceedings: the choice is reversed

As soon as proceedings are opened, both levers are neutralised and then reorganised.

Article L. 622-13, I, of the French Commercial Code provides that, notwithstanding any statutory provision or contractual clause, no termination of a contract in progress may result from the mere fact that safeguard proceedings have been opened, and that failure to perform prior commitments gives rise only to a claim in the proceedings. Article L. 145-45 adds that judicial reorganisation and liquidation do not result, by operation of law, in termination of the lease of buildings used for the debtor's industry, trade or craft business, including premises forming part of those buildings and used as the debtor's home or that of the debtor's family, any contrary stipulation being deemed unwritten.

For rent and service charges relating to occupation after the opening judgment, Article L. 622-14, 2°, requires the landlord to wait: it may act only after a period of three months from that judgment, and if the sums due are paid before the end of that period, there is no ground for termination. The same article adds that, notwithstanding any contrary clause, failure to trade during the observation period in one or more leased buildings does not result in termination of the lease. Closure of the premises, the non-monetary breach par excellence, is therefore neutralised during the observation period.

In judicial liquidation, Article L. 641-12 distinguishes two sequences. For grounds prior to the liquidation judgment (or, if it preceded it, to the judgment opening safeguard or reorganisation proceedings), the landlord must, if it has not already done so, bring its application within three months of publication of the judicial liquidation judgment. This time limit is an operational cut-off: an institutional landlord that learns of the publication late loses the benefit of the prior grounds. For later unpaid sums, the reference is to the conditions of Article L. 622-14. On the landlord's timetable and the ranking of its claim, see our analysis of the fate of the commercial lease on the tenant's judicial liquidation.

Practical consequence: monitoring the BODACC (French official bulletin of civil and commercial announcements) and the calendar of collective proceedings is, for a portfolio of leases, part of the first-level control system, not occasional watchfulness.

The alternatives not to be overlooked

Refusal of renewal for a serious and legitimate ground

When the lease is approaching its end, early termination is not always the best option. Article L. 145-17, I, 1°, of the French Commercial Code allows the landlord to refuse renewal without compensation if it can show a serious and legitimate ground against the outgoing tenant. The text strictly regulates this route: where the ground is non-performance of an obligation or cessation, without serious and legitimate reason, of the business's operation, the breach may be relied on only if it has continued or been repeated more than one month after the landlord has served a formal demand to put an end to it. That formal demand must, on pain of nullity, be made by extrajudicial act, state the ground relied on and reproduce the terms of this paragraph. The legitimate grounds for refusal without compensation are dealt with separately in our article on non-renewal of a commercial lease and the eviction indemnity.

This one-month period has nothing to do with that of the commandement under Article L. 145-41: it runs after a formal demand with a different object and a different purpose, and requires the text to be reproduced word for word. Confusion between the two documents is a classic cause of losing a case.

Monthly payment as of right, a 2026 development to build into monitoring

Article L. 145-32-1, created by Article 62 of Act No. 2026-403 of 26 May 2026, provides that monthly payment of rent is as of right when the tenant of premises intended for retail or wholesale trade or for commercial or craft services so requests, provided there are no arrears in payment of the sums due as rent and service charges that have not been previously disputed. The request takes effect from the next payment date provided for in the lease, and the text applies to leases in progress on the date the Act was promulgated.

Two readings for the landlord. On the one hand, monthly payment reduces the unit amount of the arrears and changes the rhythm at which default is detected: the triggering of the commandement must be recalibrated to a monthly step. On the other hand, the proviso of no undisputed arrears makes the existence of a rent debt a ground for refusing monthly payment, which requires an up-to-date and enforceable statement of account. Finally, Article L. 145-15 now lists L. 145-32-1 among the texts that no clause may defeat.

Time limits for acting and enforcement

The choice of ground determines the time limit. Article L. 145-60 of the French Commercial Code applies a two-year limitation period to all actions brought under this chapter, whereas Article 2224 of the French Civil Code sets the general limitation period at five years from the day the holder of a right knew or should have known the facts enabling it to be exercised. The characterisation of an action for termination by the court founded on the general law of contracts, and therefore the limitation regime applicable to it, is a matter for case law and is not settled by the texts. In practice, the landlord will reason on the shortest hypothesis when structuring its timetable.

On eviction, one precaution is needed. Article L. 412-1 of the French Code of Civil Enforcement Procedures makes eviction subject to a period of two months following the commandement where it relates to a place inhabited by the person evicted or by any occupant claiming through that person. The text refers to an inhabited place: it does not apply automatically to purely commercial premises. But Article L. 145-45 recalls that a commercial lease may include premises forming part of the building and used as the home of the debtor or the debtor's family. In that mixed configuration, common on the ground floor of Parisian buildings, the enforcement timetable must be recalculated.

Conclusion: choose on risk, not on apparent speed

The termination clause is not the quick lever that its name suggests, and termination by the court is not the slow lever it is made out to be. The first imposes an incompressible month, formal requirements penalised by nullity, and exposes the landlord to a court-ordered payment schedule of up to two years with enforcement proceedings suspended. The second exposes the landlord to the uncertainty of Article 1228, but makes it possible to deal in a single set of proceedings with all of the tenant's breaches, to combine termination and compensation, and to have the effect of termination go back to the day proceedings were issued.

Our position is as follows. For a clear, liquidated unpaid sum, with no serious dispute and an insolvent tenant, the commandement invoking the termination clause remains the right tool, all the more so as the Act of 26 May 2026 has tightened the conditions for suspension. As soon as a serious non-monetary breach exists, or the arrears are disputed, an action for termination by the court offers a better ratio between real time limit and certainty of outcome.

Before any step, three checks are needed: re-read the lease's termination clause to establish the exact list of breaches it covers, check that no collective proceedings have been opened and the date of publication of any judgment, and have the managing agent quantify the economic exposure of a two-year payment schedule on the asset concerned. The lever is chosen after that quantification, not before.

Frequently asked questions

Can the landlord bring an action for termination by the court when the lease contains a termination clause? Yes. Article 1227 of the French Civil Code provides that termination may, in any event, be sought from the court. The existence of a termination clause does not deprive the landlord of the judicial route. The choice is strategic: the clause requires a commandement and a one-month period, but in principle avoids debate on seriousness; a court action exposes the landlord to the judge's power of assessment under Article 1228, which allows the judge to order performance of the contract or to award damages only.

What has Act No. 2026-403 of 26 May 2026 changed as regards suspension of the effects of the termination clause? Article L. 145-41 of the French Commercial Code adds that the grant of time to pay and the suspension of the effects of the termination clause for non-payment of rent are, moreover, made conditional on the tenant's ability to settle the rent debt and on resumption of payment in full of the current rent before the date of the first hearing. The judge's power is therefore no longer unconditional for unpaid rent. The text itself provides that it applies to applications for suspension made from its entry into force, namely 28 May 2026, regardless of the date of the lease or of the commandement.

What is the sanction for a commandement to pay that omits the one-month period? Nullity. Article L. 145-41 states that a clause providing for termination by operation of law takes effect only one month after a commandement that has remained without result and that the commandement must, on pain of nullity, mention this time limit. A void document does not start the period running and does not bring the clause into effect: the sequence must be started again from zero. Article L. 145-15 also prohibits any clause in the lease that would defeat this rule.

Until when can the judge suspend the effects of a termination clause that has already taken effect? Article L. 145-41 limits suspension to the case where termination has not been recorded or pronounced by a court decision that has acquired the force of res judicata. As long as that force has not been acquired, the judge may grant time in the forms and on the conditions of Article 1343-5 of the French Civil Code, that is, a deferral or spreading of payment within a limit of two years. If the tenant discharges the debt on the conditions set by the judge, the termination clause does not operate.

What time limit must the landlord observe in the event of collective proceedings against the tenant? For rent and service charges relating to occupation after the opening judgment, Article L. 622-14 of the French Commercial Code provides that the landlord may act only after a period of three months from that judgment, and that if payment is made before the end of that period, there is no ground for termination. In judicial liquidation, Article L. 641-12 requires an application founded on prior grounds to be brought within three months of publication of the judicial liquidation judgment.

Does failure to trade at the premises justify termination during an observation period? No. Article L. 622-14 of the French Commercial Code provides that, notwithstanding any contrary clause, failure to trade during the observation period in one or more buildings leased by the business does not result in termination of the lease. Outside collective proceedings, failure to trade may on the other hand be relied on, either in support of an action for termination by the court on the basis of Articles 1728 and 1729 of the French Civil Code, or as a serious and legitimate ground for refusing renewal on the conditions of Article L. 145-17.

Termination by the court: on what date does the lease end? Article 1229 of the French Civil Code provides that termination takes effect on the date set by the judge or, failing that, on the day proceedings are issued. For a contract whose performances have had their usefulness as performance went on, the text provides that there is no restitution for the earlier period and that termination is characterised as résiliation. The potential effect from the day proceedings are issued appreciably narrows the economic gap with the termination clause route.