What happens to the commercial lease when the tenant is in collective proceedings?

Verified 17 July 2026 - Entreprendre Service Public / (Prime Minister)

Where collective proceedings are opened against the tenant of a commercial premises, theinsolvency administrator or the judicial liquidator examine the fate of the commercial lease agreement. It may decide to continue the lease, terminate it or assign it. In some cases, the lessor has the option to terminate the commercial lease agreement himself.

In principle, the opening of collective procedure does not affect the commercial lease. This continues even if the tenant in difficulty has not paid the rents before the opening of the collective procedure.

However, the opening of a collective procedure entails the cessation of proceedings of creditors prior to the opening judgment. We are talking about the principle of stay of proceedings. This means that the landlord may not individually sue the tenant for the payment of rents prior to the judgment initiating the collective proceedings.

To recover unpaid rent, the landlord must make a declaration of claims with the judicial representative within 2 months of the publication of the opening judgment in Bodacc.

Please note

It is not possible to provide in the commercial lease agreement that the opening of collective proceedings automatically leads to the termination of the lease.

In what cases can the commercial lease be continued?

The commercial lease may continue if the following conditions are met:

  • The lease must be ‘in progress’ at the time of the opening of the collective proceedings. So the lease has to have already been entered into and not yet terminated. The lease is no longer « in progress » if it was amicably terminated before the opening of the collective proceedings or if it is terminated following a final judicial decision.
  • The tenant must have the funds and cash required to pay rents.

Who decides on the continuation of the lease?

The decision to continue the commercial lease may be taken by different parties in accordance with the open procedure:

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Judicial recovery and safeguard

When initiating proceedings for backup or judicial reorganization, the court shall appoint a insolvency administrator who alone decides on the continuation of the lease.

If the court does not appoint a court administrator, it is tenant who decides to continue the lease after agreement of the judicial representative. In case of disagreement between the tenant and the judicial representative, the commissioner judge may be seized by any interested person (in particular landlord).

FYI  

The appointment of the insolvency administrator is mandatory beyond the following thresholds: a turnover before tax greater than €3 million and at least 20 employees.

Judicial liquidation

In case of bankruptcy, it's the judicial liquidator appointed by the commercial court (or the tribunal for economic activities) which decides on the continuation of the commercial lease.

Where the company has more than 20 employees and has a turnover excluding tax of more than or equal to €3 million, the court shall appoint, in addition to the liquidator, a judicial administrator. In this case, the latter decides on the continuation of the lease.

The professional civil liability of the insolvency administrator may be incurred if he decided to continue the lease when the company did not have the necessary funds to pay the rents.

THEinsolvency administrator or the liquidator has no obligation to notify the lessor of the continuation of the lease.

For its part, the lessor can send a formal notice to the tenant, the receiver or the liquidator to determine the commercial lease. However, the absence of a response to this formal notice does not lead to the termination of the lease.

What are the consequences of continuing the lease?

The lease is continued under the contractual conditions provided for by the lessor and the tenant before the judgment opening the collective procedure. The tenant (or the receiver or liquidator) must therefore pay the rent and comply with the terms of the lease agreement (for example, the destination of the premises).

In any case, the lessor can't opposer to the continuation even if the tenant has arrears of rent at the date of opening of the collective procedure.

The commercial lease may be terminated at the request of theinsolvency administrator, of judicial liquidator , the lessor or the lessee depending on the collective procedure initiated (safeguard, judicial reorganization or judicial liquidation).

Termination by the judicial administrator or liquidator

The decision to terminate the commercial lease may be taken by different parties in accordance with the open procedure:

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Judicial recovery and safeguard

THEinsolvency administrator may decide, at any timeterminate the lease of the premises used for the activity of the tenant company. He does not have to justify his decision. He has the possibility to terminate the commercial lease even if the rents can be paid.

However, the insolvency administrator has the obligation to terminate the commercial lease when the tenant company does not have the necessary funds to pay the rents.

The commercial lease is terminated on the day the lessor is informed of the administrator's decision not to continue the commercial lease.

Please note

If the court does not appoint a receiver, the tenant decides to terminate the lease after agreement from judicial representative. If a disagreement arises between the tenant and the judicial representative, the commissioner judge is seized by any interested person (including the owner).

The professional civil liability of the administrator may be incurred if he decided to continue the lease when the company did not have the necessary funds to pay the rents. The same liability may be incurred when the administrator has delayed terminating the lease due to the difficulties of the company.

Judicial liquidation

After the opening of the bankruptcy procedure, the judicial liquidator may decide to terminate the commercial lease without having to justify it and at any time.

He can terminate the lease he initially sued even if the company is able to pay the rents. On the other hand, where the company does not have the necessary funds to pay the rents, the judicial liquidator must terminate the lease.

The lease is then terminated on the day the lessor is informed of the liquidator's decision not to continue the commercial lease.

Please note

The liquidator's professional civil liability may be incurred if he requested the continuation of the lease or delayed in terminating it when the company did not have the necessary funds to pay the rents

Termination by the lessor

The landlord may require the termination of the commercial lease where the tenant has not paid the rents and charges 3 months after the judgment initiating the collective proceedings. The lessor then seizes the commissioner judge who notices the termination of the lease but cannot grant payment terms for the payment of unpaid rent. If the payment of the rent occurs during this period of 3 months, termination is not possible.

The lessor may also apply to court the termination of the lease, for reasons given before the opening judgment the procedure other than payment of rent. This is, for example, a lack of maintenance of the rented premises. He must take legal action within 3 months of the publication of the judgment opening the bankruptcy at the Bodacc: titleContent.

FYI  

To obtain the settlement of unpaid rents before the opening of the collective procedure, the lessor must carry out a declaration of claims in a 2 months delay from the publication of the opening judgment in Bodacc.fr.

Termination by the tenant

In principle, it is theinsolvency administrator who decides to terminate or continue the lease. When the company does not have a receiver, it is the tenant in difficulty who decides to terminate the lease after agreement from judicial representative.

If a disagreement arises between the tenant and the judicial representative, the commissioner judge is seized by any interested person (including the lessor).

During the judicial reorganization or bankruptcy, the lessee may assign his commercial lease either as part of an assignment plan or in isolation:

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Assignment of the lease in a plan of assignment

In the context of a judicial reorganization or liquidation, the commercial court (or the tribunal for economic activities) may decide on the total or partial transfer of the tenant company. It shall then set a time limit within which takeover bids must reach theinsolvency administrator or at judicial liquidator. After examining the takeover bids, the court will select the one that ensures the most sustainable employment and payment of the creditors. The buyer's offer must include a list of the contracts included in the offer.

The court arrests a divestiture plan which specifies the contracts necessary to maintain the activity. In principle, the commercial lease is included in the divestiture plan. It is thus transferred to the buyer of the company and must be executed under the conditions in force on the day of the opening of the procedure. The terms of the commercial lease that are usually entered into that may preclude the possibility of assigning the lease are not applicable in the context of an assignment plan. These are the provisions on the written agreement of the landlord in the event of assignment of the lease, on the joint and several guarantee of payment rents, and on the right of pre-emption of municipalities.

Assignment of the lease outside a plan of assignment

This transfer shall take place in the event of bankruptcy from the tenant. It is done with the authorization of the commissioner judge. The latter shall order the assignment of the lease by public auction, or authorize, on such terms as it may determine, the over-the-counter selling assets not included in the disposal plan.

The liquidator (or the insolvency administrator if one has been appointed) decides to assign the commercial lease but respecting all the clauses of the lease contract provided for in the assignment :

  • The clause that provides for the approval (i.e. agreement) of the landlord in case of assignment of the lease must be respected.
  • The right of pre-emption of the municipality must also be followed. Before selling a business or assigning a commercial lease located in a backup perimeter of trade, the seller must make a declaration to the municipality concerned. The latter then has the possibility of buying the business or taking over the commercial lease in priority to resell it to a trader or a craftsman.
  • The joint and several guarantee clause provided for in the commercial lease does not apply when the lease is assigned.

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