Overview: Three Situations Where Retraction Arises
Retraction (rétractation) is the landlord’s power to withdraw an offer previously made in a commercial lease context. It operates in three situations: retraction of a renewal offer contained in a congé with renewal offer; retraction of an eviction indemnity offer contained in a congé with refusal and indemnity offer; and retraction of a tacit or express acceptance of the principle of renewal following the tenant’s renewal request. In all three cases, the same two grounds apply: denial of the right to the statute, and serious and legitimate reasons.
How Retraction Differs from the Right of Option and Right of Repentance
| Mechanism | Who can use it | Grounds required? | Result |
|---|---|---|---|
| Retraction (rétractation) | Landlord only | Yes — denial of statute conditions or serious/legitimate reason | Refusal of renewal without eviction indemnity |
| Right of option (droit d’option) | Landlord or tenant | No — entirely unmotivated | Landlord: refusal with indemnity; Tenant: renounces renewal |
| Right of repentance (droit de repentir) | Landlord only | No — entirely unmotivated | Withdrawal of refusal; renewal offered; indemnity avoided |
A landlord who wants to withdraw a prior offer without paying an eviction indemnity and without offering renewal must use retraction — and must have a valid ground. Without a valid ground, the attempted retraction is void (Cass. 3e civ., 12 September 2019, n° 18-18.590). The right of option, by contrast, requires no ground but will trigger an indemnity if exercised by the landlord.
The Two Grounds for Retraction
Ground 1: Denial of the Right to the Statute or Renewal
The landlord may retract if the tenant does not or no longer satisfies the conditions for the commercial lease statute under Art. L. 145-1 (registration at RCS or RNE, genuine commercial use, exploitation of a fonds de commerce) or the conditions for the renewal right under Art. L. 145-8 (three years of personal exploitation before lease expiry). In practice, the most common ground is a registration lapse or registration at the wrong address or for the wrong activity.
This ground is the stronger of the two: retraction can be made even if the landlord knew of the ground at the time of the original notice (Cass. 3e civ., 23 February 1994). It can be raised throughout the proceedings until a final judgment fixes the eviction indemnity (Cass. 3e civ., 7 September 2017; Cass. 3e civ., 20 April 2023). The action on this ground is not subject to the two-year prescription of Art. L. 145-60.
An important exception applies during the holdover period: where the landlord has already served a refusal notice with an eviction indemnity offer, deregistration occurring after the lease expiry date can no longer be used as a retraction ground (Cass. 3e civ., 29 September 2004). This reversed earlier case law that had allowed retraction on post-expiry deregistration.
Ground 2: Serious and Legitimate Reason
The landlord may also retract where a serious and legitimate reason has arisen or been revealed after the notice was served. A pre-existing breach that was known at the time of the notice cannot support retraction on this ground (Cass. 3e civ., 7 July 2004). This is the reverse of the denial ground, which allows retraction even on known pre-existing facts.
For retraction on serious and legitimate grounds (whether from a renewal offer or an eviction indemnity offer): the landlord must first serve a formal notice under Art. L. 145-17-1 requiring the tenant to remedy the breach within one month. Only after the breach persists can the retraction be made. This ground is subject to the two-year prescription of Art. L. 145-60, running from the date the landlord became aware of the breach (Cass. 3e civ., 9 November 2017).
Denial ground: no prescription; known pre-existing facts allowed; no prior formal notice required; raised at any point until the final indemnity judgment. Serious and legitimate ground: two-year prescription from knowledge; must be post-notice or newly discovered; prior Art. L. 145-17-1 one-month formal notice is a mandatory prerequisite. Mixing up these two regimes is a common drafting error — always identify which ground is being invoked and apply the correct procedure.
Form and Timing
Retraction is not subject to the formal requirements of Art. L. 145-9 (bailiff service, six-month notice, etc.). No statutory-form notice is required. It can be made by any means that clearly communicates the landlord’s intention — though bailiff service is strongly recommended for evidence. In pending proceedings, retraction can be expressed through procedural filings.
- Retraction of a renewal offer: at any time before the lease is definitively renewed — which occurs at the latest one month after service of the final rent-fixing judgment if neither party has exercised the right of option by then. It can be made before, during, or after rent-fixing proceedings, and even at the appeal stage.
- Retraction of an eviction indemnity offer: at any time while the right to the indemnity has not been definitively established. The outer limit is the expiry of the fifteen-day right of repentance window following the final judgment — after which the landlord is committed to paying the indemnity.
Retraction Following the Tenant’s Renewal Request
Where the landlord accepted (expressly or by silence) the principle of renewal in response to the tenant’s renewal request, they can later retract that acceptance on exactly the same grounds: denial of statute conditions or serious and legitimate reason. The rules are identical. The Court of Cassation confirmed in 2015 that a landlord who was aware of the tenant’s lack of RCS registration throughout the proceedings was not treated as having waived the right of retraction by failing to invoke it earlier (Cass. 3e civ., 19 November 2015, n° 14-22.000).
A landlord who attempts to retract without being able to establish a valid ground — either a denial condition or a serious and legitimate reason — will have that retraction declared null. The consequences depend on the type of notice: a void retraction from a renewal offer restores the renewal offer; a void retraction from an eviction indemnity offer means the indemnity obligation remains. The ground must be real, documented, and provable before any retraction is attempted (Cass. 3e civ., 12 September 2019, n° 18-18.590).
Whether you are a landlord assessing whether you have valid grounds to retract an earlier offer, or a tenant whose renewal offer or eviction indemnity offer has been retracted without adequate grounds, we advise on the legal basis, the procedure, and the consequences.
Book a ConsultationLegal Notice. This article is for general information and educational purposes only. It does not constitute legal advice. Laws and regulations may have changed since publication. Always seek qualified French legal advice on retraction in a French commercial lease.
Key Legal References
Serious and legitimate grounds for refusal of renewal without eviction indemnity
Mandatory one-month formal notice procedure before retraction on serious and legitimate grounds: prerequisite for both renewal offer retraction and eviction indemnity offer retraction
Two-year prescription for actions relating to commercial lease rights, including retraction on serious and legitimate grounds (running from date of knowledge)
Retraction without a valid ground is void; the underlying renewal offer or eviction indemnity offer is restored
Denial ground: retraction valid even where landlord knew of the ground at the time of the original notice; known pre-existing facts do not bar retraction on denial grounds
Denial ground: no prescription; can be raised throughout proceedings until a final judgment fixes the eviction indemnity
Confirmation that denial ground can be raised until the final indemnity judgment; no prescription applies
Post-expiry deregistration cannot be used as retraction ground against a tenant in the holdover period following a refusal notice with indemnity offer; reversal of prior case law
Serious/legitimate ground: must be post-notice or newly discovered; pre-existing breach known at time of notice cannot support retraction on this ground
Serious/legitimate ground: subject to two-year prescription of Art. L. 145-60, running from the date the landlord became aware of the breach
Art. L. 145-17-1 formal notice procedure applies to retraction from eviction indemnity offer on serious and legitimate grounds during holdover period
Landlord’s knowledge of registration defect throughout proceedings does not constitute waiver of the right of retraction; failure to invoke it earlier is not an estoppel
No estoppel bars retraction on statute qualification grounds even where landlord was aware throughout
