English
FrançaisWhat happens if a leaseback company continues to default on payment of the rent after the company is in Receivership?
Pursuant
to Art. L.621-14 of the French Commerce
Code, where a leaseback company keeps defaulting on payment of the rent after the company is placed in Receivership, Lessors (i.e. leaseback owners) can file a special Application to cancel their lease.
Such an Application is to be filed with the
'Juge Commissaire'. The Application can only be issued 3 months after the company's Receivership Order has been published.
With regards to Resid'Hotel for example, the Court Order placing
ResidHotel in "procédure de sauvegarde" was published in the Official Journal (BODACC) on 14 April 2009 and therefore leaseback owners can
only apply to break the lease as from 14 July 2009, if RH continue to
default on payment of the rent, or do not apply the correct rent
increase.
There is of course a risk leaseback companies may be challenging the lease's
wording, or the way the rent increase is calculated. The wording and
calculations are complex and leaseback companies could be tempted to raise various legal issues, as
regards when the lease took effect for example. The Judge can give the Lesse (leaseback company) further time to pay, as allowed under article 1244-1 of the Civil Code, provided the Lesse makes a separate application in that regard.
http://www.solicitor.fr
cordiez40002.6246180556
Commentaires
Joanne
Lease cancellation during Receivership
15 Juillet 2009What happens if the Company (i.e. Quietude) fail to pay the
rent due 15th July, also.
cordiez
Lease cancellation during Receivership
15 Juillet 2009Under French Law, where a new Lessee (leaseback company) takes over a lease, the former tenant and the new one become jointly and severally liable to pay the rent. This stems from statutes and is also usually confirmed in a special clause of your lease.
Please note however that the above does not apply where a lease is transferred whilst the Lessee is in Receivership.
If Quietude fails to pay the rent, you should have a 'commandement de payer' served upon the company. This requires a local bailiff to be instructed and is a service I can arrange. Quietude will have up to one month to settle the outstanding rent, failing which you can sue them in Court and demand payment, or ask the Judge to rescind/cancel the lease. Please note however that in the latter case, you may end up having to repay the VAT rebate you benefited from at the time of purchase.
French solicitors http://www.solicitor.fr
cordiez40009.3199189815