Payment demand invoking the termination clause (Art. L. 145-41 French Commercial Code): the formalities on which termination depends

In a portfolio of commercial leases, unpaid rent is never a surprise: it is announced by two or three partial payments, a request for rescheduling, then silence. The real difficulty is not deciding to act, it is securing the act that triggers termination. In a dispute over unpaid commercial rent, the landlord rarely loses on the principle of the debt: it loses on the payment demand (commandement de payer), because a statement is missing, because the statement of account includes a sum not due, because a later receipt of payment amounted to a waiver, or because a judge has suspended the effects of the clause under Article 1343-5 of the French Civil Code. This analysis deals exclusively with disputes over the act itself: the conditions of validity of a payment demand invoking the termination clause (clause résolutoire), the computation of the one-month period, the grounds on which it is neutralised, and then the tenant's counter-lever, namely the challenge and grace periods (délais de grâce), with one precise tipping point, the moment at which the landlord loses control for good.

The statutory basis: termination by operation of law, subject to an act

Article L. 145-41 of the French Commercial Code strictly regulates the operation of any termination clause stipulated in a commercial lease.

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

Two consequences structure the whole analysis. First, the termination clause, however forcefully drafted, is ineffective until a valid payment demand has been served and has remained without effect for one month. Second, the provision is mandatory (ordre public) under Article L. 145-15 of the French Commercial Code: no stipulation may shorten the period, remove the requirement for a payment demand or modify the sanction.

This route must be distinguished from ordinary judicial termination based on Articles 1224 and 1227 of the French Civil Code. Judicial termination requires the judge to assess the seriousness of the breach, and the judge has an unfettered power to refuse it. The termination clause, by contrast, operates by operation of law: the judge merely records that it has taken effect, with no power to assess seriousness, subject only to good faith and grace periods. It is precisely this automatic character that explains the formal rigour imposed on the landlord. A prudent institutional landlord also frequently pursues both routes in the same summons, judicial termination serving as a safety net if the payment demand is annulled.

The distinction from residential leases must also be made. The payment demand under a commercial lease has neither the six-week period of Article 24 of Law No. 89-462 of 6 July 1989, nor the prior referral to the commission for coordinating actions to prevent evictions (CCAPEX), nor the notification to the prefect. The regime is faster, but the formalism of the act is all the more decisive.

Who serves, on whom, and by what act

A commercial lease payment demand is an extrajudicial act: it must be served by a commissaire de justice (bailiff), a profession created by the merger organised by Order No. 2016-728 of 2 June 2016 and effective since 1 July 2022. A registered letter with acknowledgment of receipt, a formal notice by email or a reminder from the property manager, however peremptory, does not start the one-month period. This is a recurring error in portfolios managed under delegation, where the amicable reminder is confused with the statutory act.

The capacity of the applicant is a particularly frequent ground for challenging a payment demand. The demand must come from the landlord of record on the date it is served. Three situations call for systematic prior verification:

• where the building has been sold, a payment demand served in the name of the seller after the transfer of ownership exposes the landlord to a substantive irregularity within the meaning of Article 117 of the French Code of Civil Procedure (CPC), which cannot be cured by proof of prejudice;
• where management is delegated to a property manager or an estate agent (administrateur de biens), the mandate must expressly cover the service of extrajudicial acts and the pursuit of contentious recovery routes;
• in the case of joint ownership (indivision) or dismemberment of ownership, standing to act must be established in light of the applicable management rules, the usufructuary alone holding the capacity of landlord for leases it has granted within the limits of its powers.

As regards the addressee, the act must name the tenant of record. Where an assignment of the lease has been duly served or accepted, a payment demand addressed to the assignor has no effect. In the case of a business management lease (location-gérance), the tenant remains the owner of the business, not the manager-lessee. Where the tenant is a company whose registered office is located in the leased premises, service must comply with the rules of Articles 654 et seq. CPC, a poorly supported record of unsuccessful searches weakening the act.

Finally, if the business operated on the premises is subject to a pledge, Article L. 143-2 of the French Commercial Code requires a landlord seeking termination to notify its claim to the registered creditors, at the address chosen in their registrations, the judgment being possible only after a period of one month from that notification. For an institutional landlord facing an indebted tenant, this check of the register of security interests over movable assets conditions the admissibility of the proceedings, independently of the validity of the payment demand itself.

The statements on which the clause taking effect depends

The one-month period, the only statement sanctioned by the text

Article L. 145-41 expressly prescribes only one statement on pain of nullity: that of the one-month period. The wording must be explicit and leave the tenant with an exact understanding of the time it has to pay. Approximate drafting, a reference to the text without reproducing the period, or the indication of an incorrect period is the most frequent ground of nullity of a payment demand and the hardest to defend, since the sanction is textual and does not require proof of prejudice.

Reference to the clause and the expression of the landlord's intention

The payment demand must allow the tenant to understand that the landlord intends to rely on the termination clause, and not simply to obtain payment. The safe practice is to reproduce the lease clause in full, to cite its article and to state that, failing payment within the month, termination will take effect by operation of law. An ordinary payment demand, served without reference to the clause, interrupts the limitation period and constitutes a formal notice, but does not start the period of Article L. 145-41. Conversely, a payment demand that invokes the termination clause can be used as a simple formal notice if the landlord subsequently waives termination, subject to the reservations set out below.

The statement of account underlying the payment demand

The payment demand must state precisely the sums claimed, item by item and instalment by instalment, so that the tenant can pay without having to reconstruct its own debt. A global statement, not broken down between rent, service charges, taxes and ancillary items, weakens the act.

Three items concentrate the litigation risk for an institutional landlord:

• indexation: if the index-linking clause is deemed unwritten, in particular in light of the requirement of reciprocity arising from Article L. 112-1 of the French Monetary and Financial Code, the indexation arrears included in the payment demand are not due, and the statement of account is distorted;
• service charges, taxes and works: Article L. 145-40-2 of the French Commercial Code requires a precise and exhaustive inventory of the categories of charges, taxes, duties and fees linked to the lease, as well as an annual summary statement. A re-invoicing not provided for by the inventory or not justified is not payable;
• contractual penalties and indemnities, which are payable only if the conditions for their application stipulated in the lease have been met.

The practical rule is as follows: a payment demand that includes sums not due is not necessarily void, and remains in principle valid for the sums actually due. But if the excess or imprecision has put the tenant in the position of being unable to determine what it owed, or if the amount wrongly claimed is significant, the judge will refuse to find that the clause has taken effect, most often on the ground of good faith. For a portfolio, the right approach is to include in the payment demand only the undisputed sums, and to reserve the disputed items for a separate action for payment. The full range of recovery routes open to the landlord, from summary proceedings to attachments, is set out in our article on landlord remedies for unpaid rent under a commercial lease.

Counting the one-month period and clearing the payment demand

The period runs from the date of service of the act, not from its actual receipt by the tenant. The courts apply the computation rules of Articles 641 and 642 CPC: a period expressed in months expires on the day of the following month bearing the same date as the day of service, failing an identical date on the last day of that month, and a period that would expire on a Saturday, a Sunday, a public holiday or a non-working day is extended to the next working day. A payment demand served on 14 March therefore expires at midnight on 14 April, the clause taking effect from 15 April.

The payment demand is cleared if the tenant pays in full within the period. Payment must be effective and discharging: handing over a cheque amounts to payment only subject to its being cashed, and a transfer order issued on the last day but credited later exposes the tenant. A partial payment, even a very substantial one, does not clear the payment demand: the clause takes effect for the whole. This is an asymmetry in the landlord's favour, provided the initial statement of account is unassailable, failing which the judge will find that the tenant paid everything it really owed.

The allocation of payments deserves particular attention. Where the debtor gives no indication, allocation is governed by Articles 1342-10 et seq. of the French Civil Code. A tenant that pays during the period without specifying the allocation of its payment, when other debts exist, creates an uncertainty that the landlord has an interest in removing immediately in writing. The security deposit, unless otherwise stipulated, cannot be unilaterally allocated by the landlord to the arrears in order subsequently to claim an unpaid balance.

The grounds on which the payment demand is neutralised or lapses

The clause taking effect is not definitively secured. Several actions by the landlord, after the expiry of the period, deprive it of effect.

Waiver is the first ground. It requires unequivocal acts showing the landlord's intention to continue the lease despite the termination that has taken effect. Receiving without reservation sums described as rent after the clause has taken effect, issuing rent demands for future terms, issuing a receipt, or concluding a settlement protocol without an express reservation of the benefit of the clause are the classic illustrations. The remedy is operational as much as legal: as soon as the clause has taken effect, rent demands and receipts must be recharacterised as occupation indemnity, with an express statement of reservation on each notice and each receipt. In organisations where rental accounting and the litigation department are not synchronised, this switch is the main source of losing cases that were won in advance.

Bad faith is the second front. Article 1104 of the French Civil Code requires contracts to be performed in good faith, and it is accepted that a termination clause cannot be operated in bad faith. The following are regularly retained: serving a payment demand during settlement negotiations initiated by the landlord, refusing a payment offered within the period, claiming sums that the landlord knew to be disputed or the subject of pending proceedings, or operating the clause for a purpose unrelated to recovery, for example to free up premises with a view to re-letting on better terms or restructuring the building. This last scenario calls for particular vigilance in asset management operations where planned vacancy is an acknowledged objective: the coincidence between a repositioning project and a payment demand for modest arrears will be exploited by the opponent.

Finally, serving a new payment demand on the same grounds, or granting amicable payment terms covering the period concerned, may be interpreted as a waiver of the first act. Each payment demand must therefore be dated, reasoned and linked to the previous ones in a readable chronology.

The effect of the tenant's collective insolvency proceedings

The sequence changes radically once collective insolvency proceedings are opened, a statistically frequent scenario in portfolios of shops and business premises.

For rent due before the opening judgment, Article L. 622-21 of the French Commercial Code stops individual proceedings and Article L. 622-7 prohibits payment of prior claims. It follows that the termination clause can no longer take effect on the basis of a payment demand whose one-month period had not expired on the day of the opening judgment: the tenant is legally prevented from paying. The decisive criterion for the landlord is therefore the date on which the clause took effect compared with the date of the opening judgment. A clause that took effect before the opening can still be recorded; a clause in the course of taking effect is neutralised. This rule calls for the payment demand to be served without delay, as soon as significant arrears have built up, rather than letting amicable reminders run.

For rent due afterwards, Article L. 622-14 of the French Commercial Code reserves to the landlord an action to record termination by operation of law, but only on expiry of a period of three months from the opening judgment, and provided the rent for the later period remains unpaid. The application then falls to the insolvency court, and the proof of claim in the liabilities for the earlier arrears, within the period of Article L. 622-24, must be pursued in parallel.

The tenant's lever: challenging the payment demand and grace periods

Grounds of challenge

The tenant has two categories of grounds. Irregularities of form, governed by Articles 112 et seq. CPC, are sanctioned only if they cause prejudice, except where the nullity is textual, which is precisely the case for omission of the one-month period. The substantive irregularities of Article 117, in particular lack of authority of the applicant or lack of capacity of the addressee, require no prejudice and may be raised at any stage.

To these are added challenges on the merits: total or partial non-payability of the sums, unlawful indexation, charges that cannot be re-invoiced, set-off against a certain, liquidated and due claim of the tenant, in particular in respect of works falling under Article 606 of the French Civil Code or a breach by the landlord of its obligation of delivery. Account must also be taken of the two-year limitation period of Article L. 145-60 of the French Commercial Code for actions brought under the statutory regime, and of the five-year limitation period of Article 2224 of the French Civil Code for the action for payment of rent. On the tenant relying on a breach by the landlord to paralyse the clause, see our analysis of the termination clause and the defence of non-performance.

Suspension of the effects of the clause under Article 1343-5 of the French Civil Code

It is the second paragraph of Article L. 145-41 that provides the main counterweight:

Judges seised of an application made in the forms and conditions provided for in Article 1343-5 of the Civil Code may, by granting time to pay, suspend the operation and effects of termination clauses, where termination has not been recorded or pronounced by a court decision that has acquired the force of res judicata. The termination clause does not apply if the tenant pays in accordance with the conditions set by the judge.

Article 1343-5 of the French Civil Code allows the judge, taking into account the debtor's situation and having regard to the creditor's needs, to defer or spread payment of the sums due within a limit of two years. The grace period under Article 1343-5 has an enhanced effect here: it does not merely suspend payability, it suspends the operation and effects of the termination clause. If the tenant complies fully with the payment schedule, the clause is deemed never to have applied and the lease continues. Since Law No. 2026-403 of 26 May 2026 on simplifying economic life, the granting of time to pay and the suspension of the effects of the clause for non-payment of rent are also conditional on the tenant's ability to pay the rent debt and on resumption of full payment of current rent before the date of the first hearing (Article L. 145-41, third paragraph, of the French Commercial Code). This condition applies to applications for suspension made from the entry into force of that law.

In practice, the decision granting time to pay systematically attaches to the schedule a forfeiture clause: failing payment of a single instalment on time, the balance becomes immediately payable and the termination clause resumes its full effect. The landlord must nonetheless be able to prove the default in payment, and most often returns to the judge to have the resumption of effect recorded and to obtain the eviction.

The tipping point: a decision that has acquired the force of res judicata

The text sets a precise time limit on the judge's power: time to pay can no longer be granted where termination has been recorded or pronounced by a decision that has acquired the force of res judicata. This threshold is the nerve of the procedural strategy.

A summary order, which has only provisional res judicata authority and does not decide the principal issue, does not close the door: the tenant ordered to pay in summary proceedings retains the ability to apply to the court on the merits for time to pay and for suspension of the effects of the clause, including after service of the order. A landlord content with a summary title therefore has an enforceable title but not an established position. Conversely, a judgment on the merits not subject to an appeal with suspensive effect within the time limits definitively fixes termination.

This asymmetry calls for a choice. Summary proceedings are fast, suitable where the claim is unassailable, the statement of account is unassailable and the urgency is real, in particular to avoid the arrears increasing or the foreseeable opening of collective insolvency proceedings. A summons on the merits is slower but more secure, especially where the tenant raises serious challenges on indexation or charges, which would deprive the summary proceedings judge of power under Articles 834 and 835 CPC. In high-stakes cases, summary proceedings followed by a summons on the merits, or a summons on the merits at short notice, remains the most robust strategy.

Once termination has taken effect and been recorded, eviction requires an enforceable title and service of an order to vacate the premises (Article L. 411-1 of the French Code of Civil Enforcement Procedures). The two-month period of Article L. 412-1 of the same Code applies only if the premises are inhabited by the person being evicted or by an occupant deriving rights from that person. It should be noted that the winter truce of Article L. 412-6 of the same Code concerns residential premises: it does not prevent the eviction of a tenant of purely commercial premises, which is a significant timing difference from the residential position. The timetable of this enforcement phase is dealt with separately in our article on the order to vacate the premises following the eviction judgment.

Decision chronology for the landlord

The typical sequence, from the standpoint of an institutional landlord, is built around dated checkpoints:

• prior audit of the lease: existence and drafting of the termination clause, lawfulness of the indexation clause, compliance of the charges inventory with Article L. 145-40-2, existence of an independent guarantee, a surety or a security deposit that can be called on;
• checking the register of security interests over movable assets to identify a pledge over the business and the creditors to be notified under Article L. 143-2;
• drawing up a statement of account limited to undisputed sums, broken down by instalment and by type;
• service of the payment demand invoking the termination clause by a commissaire de justice, reproducing the clause and expressly stating the one-month period;
• on expiry of the period, an immediate accounting switch to occupation indemnity, with written reservations on every receipt;
• choice of the procedural route, summary proceedings or merits, according to the substance of the foreseeable challenges;
• on obtaining the title, service, an order to vacate the premises, and monitoring of the payment schedule if time to pay has been granted.

Conclusion

Litigation over a payment demand invoking the termination clause is not a dispute about the debt, it is a dispute about the act and the timetable. A landlord who loses has almost always made one of three mistakes: it included in the payment demand sums it could not justify, it continued to receive rent after the clause took effect, or it was content with a summary title in the belief that termination was definitively established, when the tenant retained the ability to obtain time to pay before the court on the merits.

The position taken is this: on an asset whose usability and rental value are at stake, speed must never take precedence over the accuracy of the statement of account. A payment demand served three weeks later on undisputed grounds is worth more than an immediate payment demand annulled six months later. Before any service, have the statement of account drawn up by a third party who is not the manager that issued the rent demands, and have the lawfulness of the indexation clause checked: this is the check that pays off most in this type of dispute.

Frequently asked questions

What statements are required on pain of nullity in a payment demand invoking the termination clause? Article L. 145-41 of the French Commercial Code expressly prescribes only one statement on pain of nullity: that of the one-month period left to the tenant to pay. In practice, the validity of the act also requires that it refer to the termination clause of the lease, preferably reproduced in full, that it come from the landlord of record or a duly authorised agent, that it be served on the tenant of record by a commissaire de justice, and that it set out a precise, itemised statement of the sums claimed. An act served by registered letter does not start the period.

Can a commercial lease payment demand be annulled because it claims sums not due? A payment demand claiming sums that are partly not due is not necessarily void and remains in principle effective for the sums actually payable. The judge will, however, refuse to find that the clause has taken effect where the imprecision or excess of the statement of account put the tenant in the position of being unable to determine what it had to pay, or where the claim for sums that the landlord knew to be disputed amounts to bad-faith operation within the meaning of Article 1104 of the French Civil Code. The most exposed items are indexation arrears based on a clause deemed unwritten and charges not compliant with the inventory of Article L. 145-40-2 of the French Commercial Code.

How is the one-month period calculated, and on what date does the clause take effect? The period runs from service of the payment demand. The courts apply Articles 641 and 642 CPC: the period expires on the day of the following month bearing the same date, failing which on the last day of that month, and it is extended to the next working day if it expires on a Saturday, a Sunday or a public holiday. A payment demand served on 14 March expires at midnight on 14 April, the clause taking effect on 15 April. A partial payment within the period does not clear the payment demand.

Can the tenant still obtain a grace period after a summary order recording termination? Yes. Article L. 145-41, second paragraph, of the French Commercial Code closes the possibility of time to pay only where termination has been recorded or pronounced by a decision that has acquired the force of res judicata. A summary order having only provisional authority and not deciding the principal issue, the tenant retains the ability to apply to the court on the merits for time to pay under Article 1343-5 of the French Civil Code and to obtain suspension of the effects of the clause. This is why a landlord with a high-stakes case does not stop at summary proceedings.

What is the maximum length of the time to pay that may be granted to the tenant? Article 1343-5 of the French Civil Code allows the judge to defer or spread payment within a limit of two years, taking into account the debtor's situation and having regard to the creditor's needs. Applied to a commercial lease, this period suspends the operation and effects of the termination clause as long as the tenant complies with the payment schedule set by the judge (Article L. 145-41, second paragraph, of the French Commercial Code). For applications made since the entry into force of Law No. 2026-403 of 26 May 2026, this time to pay also requires that the tenant be able to pay the rent debt and have resumed full payment of current rent before the date of the first hearing.