Real Property Law
More specifically, following water damage, a temporary occupant sued the owner of the premises made available to him, and his insurer, for compensation for his loss. The Court of Appeal upheld his claim, ordering the defendants to pay damages on the basis of Article 1147 of the Civil Code, as it read prior to the Order no. 2016-1331 of 10 February 2016.
In the Court of Appeal's view, the fact that the premises were leaking showed that the landlord had failed in his obligation to deliver, as provided for in article 1719 of the Civil Code. By virtue of article 1147 of the Civil Code, in the version applicable to the case, the debtor of an obligation must be ordered to pay damages in the event of non-performance or delay in performance, unless there is an extraneous cause.
This reasoning is censured by the High Court which, reiterating a previous decision (Cass. 3rd civ., 19 Nov. 2014, no. 13-20.089), points out that a precarious occupation agreement is not a lease. Consequently, the legal provisions relating to leases do not apply to it; it was then up to the occupier who wished to obtain compensation to establish a contractual breach by his co-contractor, as the precarious occupation agreement is governed only by the contractual provisions of the parties.
For the record, the precarious occupancy agreement, which originated in case law, has been defined, since Law no. 2014-626 of 18 June 2014 (known as the "Pinel Law"), by article L. 145-5-1 of the French Commercial Code as an agreement under the terms of which an occupier is authorised to occupy the premises until such time as an event occurs that is beyond the sole control of the parties, thus substantially repeating the definition previously used by the French Supreme Court (Cass. 3ème civ., 19 Nov. 2003, no. 02-15.887).
This often means that the parties are not bound by a lease where the occupation, motivated by exceptional circumstances, is likely to end at any time at the owner's initiative. These agreements are excluded from the scope of the commercial lease statute because of their duration.
The Court of Cassation is particularly careful to ensure that trial judges verify the existence of a legitimate and real reason for the precarious nature of the agreement on the day it is entered into (Cass. 3ème civ., 14 Apr. 2015, no. 14-10.128).
While it was thus accepted that the precarious occupancy agreement did not fall within the scope of the commercial lease statute, the High Court took the reasoning a step further, by more radically excluding the classification of the agreement as a lease.
This solution has been criticised, insofar as any lease implies enjoyment of the thing leased, which translates into an obligation to deliver and an obligation to maintain that thing ("Nature sui generis de la convention d'occupation précaire", L. Molina, L'Essentiel Droit des contrats no. 2, p. 6, 7 Feb. 2024).
Some authors have questioned whether the precarious occupier should have recourse to the ordinary law of obligations, and in particular articles 1106, 1163 and 1166 of the Civil Code, which define synallagmatic contracts and relate to the concept of performance as the object of the obligation.
While it might have been possible to rely on these provisions to penalise an owner who had not provided the premises covered by the agreement from the outset, it seems more difficult to invoke them to justify an obligation to maintain the premises throughout the period of occupation, given the precarious nature of the latter ("Régime de la convention d'occupation précaire", J.-D. Barbier and S. Valade, D. actualité, 26 Jan. 2024).
For other authors, article 1188 of the Civil Code, paragraph 2, would allow the precarious occupation agreement to be interpreted in the way that a reasonable person would interpret it, so as to include an obligation to deliver (L. Molina, infra).
As things stand, and in order to protect the parties from any potential difficulties, they are strongly advised, at the stage of concluding the agreement, to take care in drafting their respective obligations.
