Formal notice to pay commercial rent: the template and what it must contain before the payment order

An institutional landlord that finds a first unpaid instalment on an office or retail asset must decide quickly: send a reminder, secure the debt, or set in motion the tenant's exit. The formal notice (mise en demeure) is the act on which that decision depends, because it fixes the starting point of interest, freezes the statement of account that can be relied on, and prepares the evidential ground for the payment order (commandement de payer) invoking the termination clause (clause résolutoire). If badly drafted, it produces none of the expected effects and forces the whole procedural chain to be restarted. This guide details the required content of a formal notice for unpaid rent under a commercial lease, its exact legal scope, the parallel notifications not to be omitted, and then the chronology leading from the payment order under Article L. 145-41 of the French Commercial Code to the application to the judge hearing summary proceedings (juge des référés).

What the formal notice produces, and what it does not

The effects attached to Article 1344 of the French Civil Code

Article 1344 of the French Civil Code provides that the debtor is put on notice to pay either by a formal demand or by an act containing a sufficient summons, or, if the contract so provides, by the mere fact that the obligation has fallen due. A registered letter with acknowledgement of receipt is an act containing a sufficient summons provided it is unambiguous as to the sum claimed and as to the demand for payment.

The main effect is financial. Article 1344-1 of the French Civil Code attaches to the formal notice the running of default interest at the statutory rate, without the creditor having to show any loss. Where the lease provides for contractual late-payment interest or a penalty clause, the formal notice is the act that triggers its application, subject to the power of reduction conferred on the judge by Article 1231-5 of the French Civil Code. For a landlord managing a portfolio, the issue is not the statutory rate in itself: it is the ability to produce, on the day of the hearing, a statement of account drawn up at a certain date and notified on an adversarial basis.

The second effect is evidential. The formal notice records the tenant's knowledge of its default and of the amount. It deprives of credibility the argument, frequently raised in defence, of a dispute over charges or indexation discovered only at the payment order stage.

The limits to bear in mind before sending it

Three misconceptions circulate and are costly.

The formal notice does not interrupt the limitation period. Only a court claim (Article 2241 of the French Civil Code), the debtor's acknowledgement of debt (Article 2240) and an act of enforcement (Article 2244) have that effect. An action for payment of rent, charges and indexation supplements is time-barred after five years from each due date, under Article 2224 of the French Civil Code. An annual reminder on an old arrear therefore protects nothing.

The formal notice does not trigger the period of Article L. 145-41 of the French Commercial Code. That one-month period runs exclusively from a payment order served by a commissaire de justice (bailiff) and expressly invoking the termination clause. No letter, however peremptory, can take its place. Article 1225 of the French Civil Code, which makes the operation of an ordinary-law termination clause subject to a formal notice expressly mentioning the clause, is displaced here by the special text of the commercial lease statute.

Finally, the costs of amicable recovery remain in principle for the creditor's account, in accordance with Article L. 111-8 of the French Code of Civil Enforcement Procedures. Charging the tenant the fees of a collection agency, by including them in the statement of account later produced before the judge, exposes the landlord to a challenge to the amount claimed in the payment order.

The formal notice in the landlord's decision timetable

The property manager's reflex is to send a reminder on the tenth day of delay. The litigator's reflex is different: the formal notice must be the act that opens a sequence already decided internally, and not a mere collection gesture.

The standard sequence, for unpaid rent and charges on commercial premises, runs as follows:

• Contractual due date not met. Verification of enforceability against the lease (payment in advance or in arrears, frequency, date on which charge provisions were called).
• Formal notice by registered letter with acknowledgement of receipt, supplemented by an ordinary mailing and, where the lease allows, notification by electronic means. Period for putting matters right generally eight to fifteen days depending on the management policy.
• On expiry of that period, a decision: calling the security (security deposit, guarantor, on-demand guarantee), an action for payment alone, or a payment order invoking the termination clause.
• Service of the payment order. The one-month period of Article L. 145-41 runs from service.
• On expiry of the month, if the payment order remains unsuccessful, a summons in summary proceedings before the president of the judicial court seeking a finding that the termination clause has taken effect, eviction, the fixing of an occupation indemnity and an interim award on the arrears.

Between the formal notice and the payment order, the landlord keeps control of the timetable. After the payment order, it partially loses it: the tenant may apply to the judge for time to pay under Article 1343-5 of the French Civil Code, and obtain suspension of the effects of the termination clause.

Framework: what the template letter for unpaid rent under a commercial lease must contain

A template letter for unpaid rent under a commercial lease that can be used across a portfolio is structured in functional blocks. Each answers an objection identified in litigation.

Identification of the debt and of the contractual basis

The letter must identify the lease by its date, its parties, where relevant its amendment or the deed of assignment by which the current tenant took over the rights of the original tenant, and the leased premises by their address and lot. Where the tenant is a company, the formal notice is sent to the registered office as it appears in the trade and companies register on the date of sending, and not to the address of the leased premises. An unverified transferred registered office produces a notification that cannot be relied on against the tenant.

Where there are joint and several co-tenants, the formal notice is sent to each of them. Joint and several liability does not dispense with individual summons where the landlord intends interest to run against each of the co-debtors.

The statement of account, the key document of the file

This is the block on which files are lost. The statement of account must be detailed item by item and period by period: principal rent, value added tax if the landlord has opted for it, charge provisions called, charge reconciliation, property tax and additional taxes if their re-invoicing is stipulated, late-payment interest already accrued, all after deduction of part payments received and of the security deposit if it has been applied.

Two checks determine the soundness of the statement of account.

The first concerns charges. Articles L. 145-40-2 and R. 145-35 of the French Commercial Code, which stem from Law No. 2014-626 of 18 June 2014 known as the Pinel Law and its implementing Decree No. 2014-1317 of 3 November 2014, prohibit certain expenses from being charged to the tenant: major repairs under Article 606 of the French Civil Code and the related fees, compliance works falling within those major repairs, taxes of which the legal taxpayer is the landlord with the exception, notably, of property tax, rent management fees, and, in a multi-unit property, charges relating to vacant premises. A statement of account that includes a share of structural façade renovation gives the tenant a serious-dispute argument that will block the summary proceedings. The allocation of major repairs between landlord and tenant, and the limits of the clauses that alter it, are detailed in our article on Article 606 of the French Civil Code in commercial leases.

The second concerns indexation. Where the sliding-scale clause makes revision subject to prior notification by the landlord, claiming an indexation arrear that was never notified weakens the whole statement of account. Prudence dictates isolating the indexation arrear on a separate line, so that a dispute on that item does not affect the principal.

The recital of the lease provisions and the announcement of what follows

The formal notice reproduces the lease's termination clause, the late-payment interest clause and, where applicable, the penalty clause. It explicitly announces what is envisaged in default of payment: service of a payment order invoking the termination clause under Article L. 145-41 of the French Commercial Code, calling of the security, and application to the judge hearing summary proceedings for eviction. This announcement is not a mere formula: it establishes the landlord's good faith and deprives the tenant of the argument of an abrupt termination of established commercial relations.

The period, the method of payment and the reservations

The letter sets a period for putting matters right expressed in days from first presentation, gives the bank details for payment and specifies that any part payment will be applied first to costs, then to interest, then to the oldest principal, in accordance with Article 1343-1 of the French Civil Code. It closes with a reservation of rights: the formal notice amounts neither to a waiver of the benefit of the termination clause, nor to a grant of time, nor to acceptance of any payment schedule.

One drafting point deserves attention. Spontaneously offering a payment schedule in the formal notice weakens the landlord's position: the tenant will rely on it before the judge hearing summary proceedings to show that the landlord had accepted deferred payment, and therefore that the termination clause was not meant to apply. A payment schedule, if one is contemplated, is negotiated by a separate document, after the formal notice, with an acceleration clause and without waiver of the payment order.

The parallel notifications that the institutional landlord cannot miss

Three information obligations are triggered at the first payment default, independently of the formal notice sent to the tenant. Their omission does not weaken the termination, but it neutralises the security, that is, precisely what gives the file its value for an institutional creditor.

Information to the guarantor assignor. Article L. 145-16-1 of the French Commercial Code requires the landlord, where the assignment of the lease was accompanied by a guarantee clause from the assignor, to inform the assignor of any payment default by the tenant within one month of the date on which the sum should have been paid. Article L. 145-16-2 also limits this guarantee to three years from the assignment of the lease. A landlord that calls the assignor's guarantee two years after the first unpaid sum, without having given notice month after month, will meet a plea of inadmissibility.

Information to the guarantor. For guarantees given by an individual to a professional creditor, Article 2303 of the French Civil Code, introduced by Ordinance No. 2021-1192 of 15 September 2021 reforming the law of security, requires the creditor to inform the guarantor of the debtor's default from the first payment default not remedied within the month of falling due, on pain of forfeiture of the penalties and late-payment interest accrued between the date of the default and the date on which the guarantor was informed. To this is added the annual information required by Article 2302 of the same Code. These obligations do not apply to the beneficiary of an on-demand guarantee (garantie autonome) within the meaning of Article 2321 of the French Civil Code, which explains institutional landlords' preference for that type of security.

Notification to creditors registered against the business (fonds de commerce). Article L. 143-2 of the French Commercial Code requires an owner who seeks termination of the lease of premises in which a business encumbered by registered charges is operated to notify the application to the previously registered creditors, termination being possible only one month after that notification. This formality, regularly forgotten in unpaid-rent files, is nonetheless systematically raised by the bank holding the pledge. It requires a search of the register of pledges before the summons.

From the payment order invoking the termination clause to summary proceedings

The content of the payment order

The payment order invoking the termination clause is an act of a commissaire de justice. Article L. 145-41 of the French Commercial Code sets out its essential condition of validity:

Any clause inserted in the lease providing for termination by operation of law takes effect only one month after a payment order that has remained unsuccessful. The payment order must, on pain of nullity, mention this period.

Three requirements combine in practice. The act must expressly refer to the lease's termination clause, reproduced or identified without ambiguity. It must mention the one-month period, on pain of nullity. It must detail the grounds of the payment order, that is, reproduce the statement of account item by item, so as to enable the tenant to pay what it really owes. The particulars on which the taking effect of the clause depends and the grounds on which the act lapses are dealt with separately in our article on the formalities of a payment order invoking the termination clause.

The case law accepts that a payment order covering sums that are partly not due is not void as a matter of principle, provided the tenant has not been made unable to determine the amount to be paid. But for the landlord, the risk is not nullity: it is the serious dispute, which closes the door to summary proceedings and sends the case to the merits, with a gain of eighteen months for the defaulting tenant. Hence the operational rule: never include in the payment order an item whose being owed is not beyond dispute.

The one-month period and its neutralisation by grace periods

The period runs from service. Full payment made within the month paralyses the clause. Part payment does not paralyse it, but it feeds the tenant's good-faith argument before the judge.

The second paragraph of Article L. 145-41 allows the judges seised of an application made in the forms and conditions of Article 1343-5 of the French Civil Code to suspend the operation and effects of the termination clause, by granting time, so long as termination has not been recorded or ordered by a decision that has become final. The clause does not operate if the tenant pays in the conditions set by the judge. Article 1343-5 authorises a postponement or spreading of payments within a limit of two years. The landlord's calculation must take this scenario into account: a tenant whose business is viable but whose cash position is tight will frequently obtain a payment schedule, and the sequence turns into recovery under judicial supervision rather than an exit.

The application to the judge hearing summary proceedings

After the month has passed, the landlord summons the tenant in summary proceedings before the president of the judicial court of the place where the building is located, which has jurisdiction in commercial lease matters under Article R. 145-23 of the French Commercial Code. The claims are brought under Articles 834 and 835 of the French Code of Civil Procedure: a finding that the termination clause has taken effect and eviction, on the ground of the absence of any serious dispute or of the manifestly unlawful disturbance constituted by remaining without right or title; the fixing of an occupation indemnity; and an interim award for payment of the arrears.

Provisional enforcement of the order in summary proceedings is automatic. The order to vacate the premises is then served under Article L. 411-1 of the French Code of Civil Enforcement Procedures. For premises used exclusively for commercial purposes, not inhabited by the tenant or by an occupant claiming through it, neither the two-month period of Article L. 412-1 nor the winter truce of Article L. 412-6 of the same Code applies: those texts concern inhabited premises. The position is reversed as soon as the lease covers a unit including an occupied dwelling, a configuration frequent in ground-floor commercial leases.

The three events that derail the sequence

The opening of insolvency proceedings neutralises the strategy. Article L. 622-21 of the French Commercial Code stops individual actions seeking payment of a pre-existing debt, and Article L. 622-7 prohibits the payment of such debts. The landlord must file its claim within two months of publication of the opening judgment in the BODACC (the French official bulletin of civil and commercial announcements), under Articles L. 622-24 and R. 622-24. Above all, Article L. 622-14, 2° prohibits the landlord from bringing an action for termination for non-payment of rent relating to occupation after the opening judgment before the end of a period of three months from that judgment. A payment order served during that period is ineffective. Monitoring the tenant's situation, through BODACC publications, is therefore an integral part of the recovery process. On the landlord's ranking and the treatment of debts arising after the opening judgment, see our analysis of the landlord's privilege in the face of the tenant's insolvency proceedings.

A serious dispute closes the summary proceedings. It most often arises from a dispute over charges not justified by the annual summary statement, from a defence of non-performance (exception d'inexécution) based on a failure to maintain or on damage affecting enjoyment of the premises, or from a counterclaim for set-off. A landlord that anticipates such a defence has an interest in clearing the debate beforehand, by replying point by point in the formal notice, with supporting documents.

Finally, the landlord's bad faith is assessed by the judge when ruling on the suspension of the effects of the clause. A payment order served for a derisory arrear, or immediately after the refusal of a payment schedule previously accepted, or by exploiting an unpaid sum to evict a tenant and retake the premises before a restructuring operation, exposes the landlord to a refusal to record the termination. The traceability of the amicable reminder, and therefore of the formal notice, is here the landlord's best protection.

Conclusion: the formal notice is an act of decision, not a reminder

The position taken is as follows: for an institutional landlord, the formal notice must never be an automated management act. It is the point at which the strategy is decided, because it freezes the statement of account that will be taken up in the payment order, because it triggers the information obligations towards the guarantor assignor and the guarantor, and because it builds the good faith that the judge hearing summary proceedings will assess eighteen months later. A badly calibrated standardised template mechanically produces payment orders open to challenge, and therefore summary proceedings sent to the merits, and therefore a prolonged immobilisation of the asset.

Before any roll-out across a portfolio, have your formal notice template audited on three points: the compliance of the statement of charges with Articles L. 145-40-2 and R. 145-35 of the French Commercial Code, the automatic triggering of notifications to guarantors within the one-month period of Article L. 145-16-1, and the systematic checking of the registrations encumbering the business with regard to Article L. 143-2. These three checks, carried out beforehand, determine how well the file stands up on the day of the hearing.

Frequently asked questions

Is a registered letter enough to trigger the termination clause of a commercial lease? No. Article L. 145-41 of the French Commercial Code requires a payment order served by a commissaire de justice, expressly invoking the termination clause and mentioning the one-month period on pain of nullity. The registered letter is a formal notice within the meaning of Article 1344 of the French Civil Code and starts default interest running, but it does not trigger the one-month period. The two acts are complementary, not interchangeable.

Must a formal notice be sent before the payment order? The law does not require it: the landlord may serve the payment order directly, unless the lease stipulates a prior formal notice, in which case that stipulation applies. In practice, the formal notice remains advisable. It establishes the landlord's good faith under the second paragraph of Article L. 145-41, clears disputes over charges before the court stage and triggers the information obligations towards the guarantor and the guarantor assignor.

What time for payment should be given in the formal notice? No period is fixed by law for the formal notice itself. A period of eight to fifteen days from first presentation is usual and sufficient for a business. A period that is too short, forty-eight hours for example, feeds the bad-faith argument; a period that is too long needlessly delays service of the payment order and the running of the one-month period of Article L. 145-41.

Can the tenant obtain time to pay after the payment order? Yes. Article L. 145-41, paragraph 2, of the French Commercial Code allows the judge, seised in the forms and conditions of Article 1343-5 of the French Civil Code, to suspend the operation and effects of the termination clause by granting time, within a limit of two years, so long as termination has not been recorded by a decision that has become final. If the tenant pays in accordance with the schedule set, the termination clause does not operate.

What sums can be included in the payment order? Only sums that are contractually due and payable: principal rent, value added tax where the option has been exercised, charge provisions and reconciliations compliant with Articles L. 145-40-2 and R. 145-35 of the French Commercial Code, property tax if its re-invoicing is stipulated, and late-payment interest. Major repairs under Article 606 of the French Civil Code, rent management fees and charges for vacant premises cannot be charged to the tenant. Including a disputable item turns the summary proceedings into a debate on the merits.

What should be done if the tenant is placed in judicial reorganisation during the procedure? Article L. 622-21 of the French Commercial Code stops individual actions concerning pre-existing debts, which must be filed within two months of publication of the opening judgment in the BODACC. For rent arising after the judgment, Article L. 622-14, 2° prohibits the landlord from bringing an action for termination before the end of a period of three months from that judgment. A payment order served in breach of that period is deprived of effect.

How long should be allowed between the first unpaid sum and the eviction of a commercial tenant? The minimum timetable adds together the period for putting matters right in the formal notice, the incompressible month of Article L. 145-41, the time for registering and listing the summary proceedings, then service of the order and the order to vacate the premises. In the absence of a serious dispute, of an application for time to pay and of insolvency proceedings, the sequence is counted in months. Any dispute over charges or application for time to pay based on Article 1343-5 of the French Civil Code significantly lengthens this period.