Newsletter No. 20 – Real Estate Law
REGULATIONS
Rental value of business premises
- Order of April 3, 2015
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Energy renovation of housing
- Decree of March 17, 2015
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Commercial development
- Order of March 27, 2015
JURISPRUDENCE
I. Condominium
… of March 24, 2015 Unenforceability of banking secrecy by the trustee against the condominium association
… of March 17, 2015
Procedures for dividing jointly owned property
II. Procedure
… of March 19, 2015 Lapse of the payment order
REGULATIONS
RENTAL VALUE OF COMMERCIAL PREMISES
The rental value of business premises had been assessed since 1970 according to cadastral rules referring to a standard property. In 2010, the legislature sought to update these rental values and implemented a system for their continuous updating. This mechanism, provided for by Article 1498 bis of the French General Tax Code (CGI), created by the 2010 amending finance law (Article 34 M of Law No. 2010-1658 of December 29, 2010) and first effective in 2015, is based on a declaration by business premises operators of the amount of rent they pay.
All business premises operators are affected.
A decree dated April 3, 2015, specifies that taxpayers subject to this obligation must declare, for each property they rent on January 1st of the year the declaration is filed, the amount of the annual rent, excluding charges and taxes, for the year in which the declaration is filed.
The rent declaration must be submitted at the same time as the income tax returns. However, for this initial filing period, the tax authorities are allowing this declaration to be submitted until September 15, 2015.
HOUSING RENOVATION
The decree of March 17, 2015¹ specifies the scope and implementation procedures for third-party financing of energy renovation work in homes or residential buildings. It also defines the eligible work and the services that must be included in the technical and financial bids.
COMMERCIAL LAYOUT
As part of the reform of commercial development implemented by the ALUR law (Law No. 2014-366 of March 24, 2014) and supplemented by the so-called "Pinel" law relating to crafts, commerce, and very small businesses (Law No. 2014-626 of June 18, 2014), a decree of March 27, 2015, was issued for the application of the commercial development reform. It repeals several provisions relating to departmental observatories for commercial development, namely, Articles A. 751-1 to A. 751-12 of the Commercial Code and the decree of November 13, 2009, issued for the application of Articles R. 751-13 and R. 751-17 of the Commercial Code.
JURISPRUDENCE
The trustee cannot enforce banking secrecy against the condominium association
Com. March 24, 2015 (n°13-22.597) F-PB:
In this case, a property manager had opened an account at a bank, which then transmitted information concerning the operation of this account to the president of the owners' association. The property manager subsequently sued the bank, seeking to establish its civil liability on the grounds that, according to him, it had violated banking secrecy. The Court of Appeal held that banking secrecy did not prevent the bank from informing the owners' association of the error made by its property manager, who had deposited funds related to the management of the condominium not into an individual account, as stipulated by Article 18 of the Law of July 10, 1965, but into a sub-account belonging to the property manager and of which he was the sole holder.
The Court of Cassation dismissed the property manager's appeal. In support of its decision, the Court specifies that the disputed account, whose title made it possible to identify the co-ownership concerned, was not a separate account within the meaning of Article 18 of the Law of 10 July 1965, recorded exclusively the management operations of the co-ownership of the residence, from which it followed that banking secrecy did not preclude the communication, to the syndicate, of information on the operation of this account.
1 Decree No. 2015-306 of 17 March 2015 specifying the scope of third-party financing services for carrying out energy renovation work in housing
Terms of sharing jointly owned property
3rd Civ. April 1, 2015 (n°14-14.349) FS-PB:
Following the divorce of a couple who had opted for a separation of property regime, difficulties arose regarding the liquidation and division of a property held jointly by them. The husband appealed the lower court's ruling that there was no claim in his favor for the financing of the jointly owned property, the remaining proceeds of the sale of which should be divided between the spouses according to each spouse's share as determined by the deed of acquisition.
In this case, the Court of Cassation upheld the Court of Appeal's decision. The lower court had first noted that the spouses had agreed, through a clause in their marriage contract, that each would be deemed to have paid their share of the marital expenses on a daily basis. It concluded that it was clear from the spouses' intent that this presumption precluded proving that either spouse had failed to fulfill their obligation. The court then determined that the jointly owned property constituted the marital home, and that the payments made by the husband relating to its acquisition were therefore part of his obligation to contribute to the expenses of the marriage. Consequently, he could not claim reimbursement for the financing of the property's acquisition.
Expiration of the payment order
2nd Civil Chamber, March 19, 2015 (No. 14-10.239) F-PB:
In this case, a bank had a payment order serving as a notice of seizure of real property served on February 16, 2010. By a preliminary ruling dated October 25, 2011, the enforcement judge of the regional court found the loan agreement to be absolutely null and void and declared the payment order serving as a notice of seizure of real property null and void, ordering its release. While the bank appealed the judgment, the enforcement judge rejected a request for an extension of the effects of the payment order.
The Court of Cassation quashed the appellate court's decision, in which the lower court had found the loan agreement to be valid. According to the Court of Cassation, due to the delay of more than two years since its issuance on February 16, 2010, the order to pay serving as a seizure had expired and had automatically ceased to have effect since February 16, 2012, so that it could not, after having annulled the orientation judgment, consider the dispute, relating to the merits of the law, concerning the validity of the enforceable title on which the proceedings are based.
