You run a petrol station, a garage, a dry cleaner’s or any other business likely to pollute the soil, and your landlord refuses to renew your lease. Who bears the cost of restoring the site? Can it be added to the indemnité d’éviction (statutory eviction compensation under a French commercial lease)? The Third Civil Chamber of the Cour de cassation (French supreme court for civil and commercial matters) answered on 22 June 2022 (appeals no. 20-20.844 and 21-11.168): these costs fall on the last operator, even if the operator did not bring the business to an end. This article presents the decision and what it means for the valuation.
The case
The dispute concerned the eviction compensation due to the operator of a petrol station after a notice to quit refusing renewal. Three questions arose:
- was the claim for compensation time-barred?
- how should reinstallation costs be assessed?
- could the costs of decontaminating the site be included in the compensation?
Limitation of the claim
Claims based on the statutory regime of commercial leases are time-barred after two years (French Commercial Code, article L. 145-60). The notice took effect on 31 December 2009 and the case was only registered with the court in January 2012. The Court confirmed that service of the writ of summons interrupts the period, in line with the principle that a claim brought before a court interrupts limitation (Civil Code, article 2241), even where registration with the court takes place after the two years have expired. The claim was therefore not time-barred.
Decontamination costs: borne by the last operator
This is the central point. The Court of Appeal had included decontamination costs in the eviction compensation. The Cour de cassation quashed on this point. It recalled that the obligation to restore the site falls on the last operator of the classified installation (installation classée, a facility regulated under French environmental law), under the Environmental Code (article L. 512-12-1), independently of the lease and of the way it ends.
In other words, decontamination is not a loss caused by the refusal to renew. It would be due in any event when the activity stops, whether as a result of a notice to quit, a sale of the business or a decision of the operator. It therefore cannot form part of the eviction compensation, which repairs only the loss caused by the failure to renew (Commercial Code, article L. 145-14).
Reinstallation costs: who must prove what
The Court then found a reversal of the burden of proof. The Court of Appeal had asked the tenant to show that it was impossible to take over an existing petrol station before granting full reinstallation costs. The Cour de cassation recalled, on the basis of article 1353 of the Civil Code, that the party claiming to be released from an obligation must prove it: if the landlord contends that the loss is smaller, it is for the landlord to demonstrate it, not for the tenant to prove the contrary.
What this means for the valuation
The Charte de l’expertise en évaluation immobilière (French property valuation charter, 6th edition, November 2025, Title III, §1.19) sets out a non-exhaustive list of ancillary compensation items: reinvestment allowance, removal costs, reinstallation costs, trading disruption, loss on stock, unamortised works and fittings, redundancy costs, sundry costs, double rent in the event of a transfer. Decontamination costs are not on the list, and the decision of 22 June 2022 confirms that they do not belong there.
Four practical lessons follow for the expert.
Separate the heads of loss. For a business likely to pollute, what results from the notice (reinstallation, trading disruption, loss on stock) must be separated from what results from the closure of the classified installation (restoration of the site). Only the former enter the compensation.
Justify reinstallation costs. The figures must reflect the local market and the business concerned: are equivalent premises available? At what cost? With what fittings? The more precise the report, the less room the other party has to argue that the loss is smaller.
Treat lump sums with care. The case mentioned costs for a “change of image”. This kind of item, assessed as a lump sum, must be clearly distinguished from actual reinstallation costs and supported by quotes or references.
Flag contamination without pricing it. The Charte (Title II, chapter 10) and the European Valuation Standards 2025 (EVS 5, §4.2.5) require the expert to flag any potential contamination on or near the property. Soil pollution surveys, however, are outside the scope of a property valuation and call for qualified and insured specialists. The expert mentions the risk, refers to the environmental audit, and does not include decontamination in the compensation.
For the tenant and the landlord
For the tenant, the decision means that restoration of the site remains at its expense and is worth anticipating, in particular by preparing the administrative file for cessation of activity. For the landlord, it prevents the eviction compensation from being inflated by an item unrelated to the notice. For both, it recalls the importance of a precise figure for each item, with its evidence: the Cour de cassation censured the Court of Appeal as much on a question of burden of proof as on a question of principle.
Further reading
The method for calculating the principal compensation and the ancillary items is presented on the Eviction compensation page. Two articles complete this one: eviction compensation for a photo shop in a shopping centre and valuing an old shop’s inventory, for the “loss on stock” item.
What next
Do you need to calculate or challenge an eviction compensation?
Value of the business or of the leasehold right, ancillary losses item by item, occupation indemnity: a report that can be checked line by line, for the landlord as for the tenant.
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