Land made available to a company: a co-tenant who is not a member does not commit a prohibited assignment

Article L. 411-37 of the French Rural and Maritime Fishing Code allows a tenant who is a member of a company with a mainly agricultural purpose to make all or part of the leased property available to it. The tenant remains the sole leaseholder and, on pain of termination, must continue farming by participating effectively and permanently in work on site.

Article L. 411-31, II, of the same Code provides two distinct grounds for termination. Point 1 covers any breach of the prohibition on assigning the lease: the landlord need not prove harm. Point 3 covers breaches of the obligations governing company use of the land: termination then requires a breach capable of harming the landlord.

In 2023, the Court of Cassation held that tenants who cease participating in the work relinquish use of the property to the company and thus make a prohibited assignment. In 2024, it clarified that tenants who are not members but continue farming do not assign the lease: only point 3 then applies.

A long-term rural lease was granted in 1989 to a couple and a third co-tenant. The land was made available to an EARL of which the wife was not a member. The landlords sought termination for prohibited assignment. The tribunal and then the Court of Appeal ordered it, considering that, because the lease was indivisible, the mere fact that one co-tenant was not a company member constituted a prohibited assignment, without requiring proof of harm.

The Court of Cassation quashed the ruling. The mere fact that a female co-tenant was not a member of the EARL using the land did not suffice to establish an unlawful assignment. The breach fell under the obligations in Article L. 411-37, and termination could be ordered only if harm suffered by the landlord was established.

The decisive criterion for a prohibited assignment is relinquishing use of the land to a third party. As long as the tenants continue to participate effectively in the work, lack of company membership is merely a breach of the company-use rules. The landlord must demonstrate resulting harm, which the trial courts assess.

For tenants, the issue is to regularise their position within the company: the Court of Cassation accepts that this breach can be remedied before termination proceedings are brought. For landlords, the ruling highlights the need to select the correct legal basis and document the alleged harm, or show that the tenants no longer genuinely participate in farming.