1. Suspensive condition without a fixed term stipulated in the preliminary sales agreement
2. Procedures for appointing the condominium manager
3. Condominium manager's appeal against an administrative decision
4. Ownership of the basement
5. Rent indexation
6. Landlord's participation in subletting
7. Cumulation of real estate agent's remuneration
a fixed term stipulated in the preliminary sales agreement
3rd Civil Chamber, May 20, 2015 (No. 14-11.851) FS-PB:
By a private agreement dated November 1 , 2004, an owner sold a plot of land to a buyer subject to the suspensive condition of obtaining a zoning certificate. On May 21, 2010, the buyer sued the seller's heirs to obtain confirmation of the sale.
The Court of Cassation upheld the appeal court's decision rejecting this claim. The appeal court had noted, firstly, that the planning certificate had only been requested several years after the signing of the sales contract and after the commencement of proceedings. Secondly, it had considered that the stipulation of a suspensive condition without a fixed term could not, in itself, render the obligation perpetual. Thus, in the absence of price indexation and a revaluation coefficient, the court held that the parties had shared the common intention of setting a reasonable timeframe for the fulfillment of the suspensive condition and concluded that the preliminary sales agreement was null and void.
2. Procedures for appointing the condominium manager
3rd Civil Chamber. April 15, 2015 (No. 14-13.255) FS-PB:
The owners of a unit in a building subject to condominium ownership regulations sued the condominium association and the property manager to have several decisions adopted at a general meeting annulled, including the decision appointing the property manager. This claim having been dismissed by the Court of Appeal, the owners appealed to the Court of Cassation.
The Court upheld the lower court's decision, finding that the property management contract did not fall within the categories of contracts and agreements covered by Article 21 of the Law of July 10, 1965, as it read prior to the Law of March 24, 2014. According to the Court, the Court of Appeal, by failing to apply Article 19-2 of the Decree of March 17, 1967, as amended by the Decree of April 20, 2010, correctly concluded that, notwithstanding the lack of competitive bidding and consultation with the owners' association, the decision appointing the property manager was validly adopted.
It should be noted that since the entry into force of the Law of March 24, 2014, the appointment of a property manager must be preceded by a competitive bidding process. This decision therefore has limited scope, as it is intended to apply only to situations that arose before the entry into force of the ALUR Law.
3. Appeal by the condominium manager against an administrative decision
of State, May 6, 2015, No. 366713):
In this case, the President of the CNIL (French Data Protection Authority) had ordered a condominium association to remove the CCTV camera it had installed in the security guards' workstation, where the control screens for the cameras located throughout the rest of the building were also located. Noting that the association had not complied with the order, the CNIL's restricted panel, by resolution, ordered the data controller to cease the continuous processing of this data and imposed a fine of €1 on the association, along with the additional penalty of publication. The condominium association requested the annulment of this resolution.
However, the Council of State did not rule on the annulment of the resolution itself, but rather on the standing of the condominium manager, who had filed the appeal on behalf of the association. In this regard, the Council reiterates that, in cases where authorization is required, the property manager, acting on behalf of the condominium association, is required to have, under penalty of inadmissibility of their claim, formal authorization from the general meeting of co-owners to initiate legal proceedings on its behalf. This authorization must specify the object and purpose of the litigation. As
the property manager's action was not preceded by any prior formal authorization, the Council considers that they lacked standing to sue.
4. Ownership of the basement
3rd Civil Chamber, May 13, 2015 (No. 13-27.342) FS-PB:
, accessible at ground level only from the neighboring garden, which belonged to the defendants. Believing that the seller of the property belonging to the plaintiffs held only a right of use over the cellar, which had lapse upon the sale to the plaintiffs, the plaintiffs sued their neighbors and the seller to have the latter's right of use declared extinguished and to have the plaintiffs' occupation of the cellar recognized as unlawful.
The Court of Appeal held that the defendants were the owners of the cellar.
The Court of Cassation dismissed the appeal against this decision, ruling that " the presumption of ownership of the subsoil in favor of the landowners can only be rebutted by contrary evidence resulting from a title, regardless of its holder, or from acquisitive prescription ."
5. Rent Indexation
3rd Civil Chamber. May 20, 2015 (No. 13-27.367) FS-PBRI:
In this case, commercial premises were leased starting February 2, 2006. On April 20, 2010, the tenant requested a rent review, which, after application of the indexation clause, amounted to €3,815,439. The tenant proposed that the rent be set at €3,256,335 and brought the matter before the rent court.
This request was rejected by the Court of Appeal and subsequently by the Court of Cassation. According to the Court, in the absence of any change in local market conditions that would have resulted in a variation of more than 10% in the rental value, there was no basis for revising the rent under Article L. 145-38 of the French Commercial Code, which, by way of exception to the rule set forth in Article L. 145-33 of the same code, excludes the general principle of using rental value as a basis for rent adjustments.
6. Landlord's Participation in Subletting
3rd 15 , 2015 (No. 14-15.976) FS-PB:
In this case, a landlord had granted a commercial lease to a hotel management company. Nine years later, the landlord issued a notice of termination with refusal to renew, citing the conclusion of sublease agreements which, according to the landlord, were irregular due to his lack of involvement in the transactions. The Court of Appeal upheld this notice of termination.
The Court of Cassation, on the contrary, held that when the leased premises are intended for a hotel residence business, which consists of providing clients with accommodation as well as services such as the rental of furnished or equipped apartments, and subletting is the very purpose of the tenant's business, the landlord is not required to participate in the subletting agreements.
7. Cumulation of Real Estate Agent's Remuneration
1st 9 , 2015 (No. 14-13.501) FS-PB:
A real estate agent was entrusted with a search mandate for a property for which he already held a mandate to sell. On the same day, the seller and the buyer entered into a preliminary sales agreement with a commission of €20,000 payable to the agent. The sale ultimately became final through a new preliminary sales agreement, concluded following the seller's withdrawal. The real estate agent then sued the seller and the buyer for damages. The Court of Appeal dismissed this claim on the grounds that a real estate agent cannot receive remuneration from both the seller and the buyer.
With reference to Articles 6 of Law No. 70-9 of January 2, 1970, and 73 of Decree No. 72-678 of July 20, 1972, as applicable in this case, the Court of Cassation held that no provision of these texts prevents a real estate agent from holding a mandate from a seller and a mandate from a buyer for the same transaction. On the contrary, according to the Court, the right to a commission exists for each mandate, provided that the requirements prescribed by these articles are met.
