Disclaimer: This article is for general information only and does not constitute legal, tax, or financial advice. Always consult a qualified French notaire, avocat, or chartered accountant before acting on anything you read here. The English Investor accepts no liability for decisions taken on the basis of this article.
Picture the worst sort of French rental: a tenant who has stopped paying, a lease the civil court has formally terminated, and a tenant who is still in the flat — running down the clock through the trêve hivernale, through the months of waiting for force publique, through every procedural delay the system permits. By the time the landlord finally has the keys back, the bill — unpaid rent, unpaid charges, the post-termination occupation indemnity — runs to thirty or forty thousand euros. The judgment is in hand. The huissier moves to enforce. And then it turns out there is nothing to enforce against. The tenant has stripped his bank accounts, transferred his car to a relative, “sold” his stake in the family company for a euro to a friend. The landlord, who has now spent two years on the eviction and a small fortune on legal costs, is staring at a worthless judgment. On 9 April 2026, the criminal chamber of the Cour de Cassation handed every French landlord — domestic or foreign — a tool against exactly this fact-pattern that they very largely don’t know they have.
The ruling (Crim. 9 avril 2026, n° 24-83.323, F-B, marked for publication at the Bulletin) confirms — for the first time in a clean criminal-chamber decision — that the indemnité d’occupation a tenant owes after their lease has been terminated is of quasi-delictual nature, not contractual nature. It therefore falls within the scope of article 314-7 of the Code pénal, which makes it a criminal offence — punishable by up to 3 years’ imprisonment and a €45,000 fine — for a debtor (or for the gérant of a debtor company) to organise their insolvency in order to escape paying. For any landlord whose French tenant is asset-shuffling out of reach — and the foreign-investor cohort holding French rental property is over-represented in this fact-pattern simply because cross-border enforcement is harder — the criminal route under article 314-7 is now a clearly-available recovery and negotiation tool, at least for the largest line on the bill, the post-termination occupation indemnity. One important caveat at the outset: the underlying case was a commercial lease between two companies, not a residential lease, and although the civil chambers of the Cour de Cassation have already characterised the post-termination occupation indemnity as quasi-delictual in residential contexts, the criminal chamber has not yet ruled on a clean residential fact-pattern — so the application of the 9 April 2026 ruling to residential leases is consistent with prior jurisprudence but is not, strictly, settled. For the wider eviction map, our eviction pillar covers the standard procedure end-to-end; our timeline article sets out the months and milestones; our winter-ban article covers the trêve hivernale; and our earlier piece on security-deposit and occupation-indemnity covers the civil-side mechanics of the indemnity itself.
What article 314-7 actually criminalises
Created by the Loi n° 83-608 du 8 juillet 1983, the offence at article 314-7 of the Code pénal — organisation frauduleuse de l’insolvabilité, or “fraudulent organisation of insolvency” — is the criminal-law sanction against a debtor who, having been ordered to pay (or anticipating that they will be), arranges their finances to make sure the order can never be executed against them. The list of forbidden manoeuvres is very broad: increasing one’s liabilities, diminishing one’s assets, hiding income, hiding belongings, transferring assets to a related party — anything done with the goal of dodging the creditor when enforcement comes. The penalty is up to 3 years’ imprisonment and a €45,000 fine. A second paragraph of article 314-7 extends liability to the dirigeant de droit ou de fait of a legal person — the gérant or director — who organises or aggravates the insolvency of their company to escape a judgment against the company.
The crucial limit on article 314-7 is what kinds of court order it covers. It applies to (i) any patrimonial-nature condemnation imposed by a criminal court, and (ii) condemnations imposed by a civil court only in délictuelle, quasi délictuelle, or alimentaire matters. It does not apply to contractual or quasi-contractual debts. This is a deliberate legislative choice — the rationale, as the Constitutional Council confirmed in 2022 (Crim. 9 février 2022, QPC n° 21-86.653), is that contractual creditors had the chance to protect themselves with sureties and guarantees when they signed the contract, while delictual victims (people who became creditors against their will) did not. Banks, suppliers, ordinary commercial counterparties — and, importantly, landlords for the unpaid-rent portion of their bill — therefore do not have access to the criminal pathway. The standard example: a creditor seeking repayment of a loan cannot prosecute their borrower under article 314-7 (Crim. 19 janvier 2000, n° 99-83.147).
What the 9 April 2026 ruling clarified
The case-specific facts are a small commercial-tenancy story between two companies — not, it bears repeating, a residential let, though the underlying procedural pattern is one any French landlord can recognise. A property-owning company let a commercial unit to a tenant company. The tenant company stopped paying. On 14 September 2010, the Tribunal de grande instance de Montpellier (the predecessor of today’s tribunal judiciaire, since the 1 January 2020 court reform) terminated the lease and ordered the tenant to pay (i) the unpaid rent and charges, and (ii) an indemnité d’occupation for the post-termination period the tenant had stayed put. The tenant company appealed. Before the appeal hearing, the gérant of the tenant company moved fast. He transferred the company’s siège social to Paris, moved the merchandise stock from the Montpellier premises to a different company he managed, and then sold all the shares of the tenant company for a symbolic €1 to a third company, with transmission universelle de patrimoine. By the time anything could be enforced, the tenant company had been scrubbed clean.
The landlord-company filed a criminal complaint. The first-instance criminal court in 2017, the Cour d’appel de Montpellier in 2024, and finally the Cour de Cassation on 9 April 2026 all agreed: the gérant was guilty of organisation frauduleuse de l’insolvabilité. The substantive question that the cassation appeal turned on was a single technical point — whether the unpaid indemnité d’occupation was contractual (in which case article 314-7 wouldn’t apply) or quasi-delictual (in which case it would). The Cour de Cassation’s answer, and the operative new law going forward, is that the indemnity is quasi-delictual: it is awarded “sur le fondement de l’article 1240 du code civil” (the general delictual-liability article) and has a “double nature compensatoire et indemnitaire“. It “sanctions an occupation of the premises without right or title — a civil fault under article 1240 of the Code civil — and it does not have its cause in the lease”. Which means article 314-7 applies, and the gérant who organised the insolvency to dodge it is criminally liable.
The line between “contractual” and “quasi-delictual” — what’s in, what’s out
The 9 April 2026 ruling crystallises a distinction that the third civil chamber had been signalling for some time (Civ. 3e, 1er avril 2009, n° 08-13.508; Civ. 3e, 15 février 2018, n° 16-13.216), but that the criminal chamber had not previously settled in a clean fact-pattern. The test, as the Cour de Cassation now states it, is whether the debt finds its cause — its legal reason for existing — in the contract that was originally signed, or whether it finds its cause elsewhere. Pre-termination unpaid rent and charges find their cause in the lease (the tenant agreed, in the lease, to pay the rent), so they are contractual. Post-termination occupation indemnity finds its cause not in the lease but in the unauthorised occupation of the premises after the lease ended, which is a delictual fault, so it is quasi-delictual. The same test was applied in 2023 (Crim. 5 avril 2023, n° 21-80.478) to hold that workplace-harassment damages awarded by a conseil de prud’hommes are contractual, because the employer’s prevention obligation is one of the “suites que la loi donne au contrat de travail” — a follow-on of the employment contract. Apply that lens to a typical landlord-tenant fact-pattern and the result is the table below.
| Type of landlord claim | Nature | Within art. 314-7 scope? |
|---|---|---|
| Unpaid rent (pre-termination) | Contractual — cause is the lease | No — landlord cannot prosecute on this line alone |
| Unpaid charges (pre-termination) | Contractual — cause is the lease | No |
| Indemnité d’occupation (post-termination) | Quasi-delictual — cause is the unauthorised occupation, not the lease (Crim. 9 avril 2026) | YES — criminally protected |
| Damages from criminal acts (vandalism, theft of fittings, deliberate damage to the property) | Quasi-delictual | Yes |
| Restitution of damaged property (ordinary wear-and-tear / leasehold dilapidations) | Contractual (lease obligations) | No |
What the table makes visible is the practical landscape for any landlord pursuing a defaulting French tenant — domestic or foreign. The unpaid-rent line, which is often the smaller of the two, stays civilly recoverable but criminally untouchable. The post-termination occupation-indemnity line — which, in a long eviction, is typically much larger because it accrues at full market-rate value for every month the tenant overstays — now sits squarely within article 314-7 (subject to the residential-vs-commercial caveat noted above). For a landlord with a ten-month overstay on a €1,500-a-month flat, that is €15,000 of criminally-protected debt. For a commercial unit with a €4,000-a-month rent and a two-year overstay, it is approaching €100,000.
How a landlord can use this in practice
The criminal pathway is not a substitute for the civil-eviction process — you still have to do the standard sequence, from commandement de payer through to force publique, and you still need a final civil judgment establishing the indemnity owed. (For the full eviction sequence, see our eviction pillar and the commandement de quitter les lieux article.) But the criminal pathway is a complement to the civil one. It opens up where the standard civil enforcement is being defeated by visible asset-shuffling — the tenant transferring belongings, dissolving companies, moving money between bank accounts, putting assets in relatives’ names — anything that fits the pattern of “organising or aggravating insolvency to escape the judgment”.
In our experience, foreign investors with French rental property are particularly unlikely to know that this criminal route exists — partly because the standard cross-border legal advice they receive is civil-side only, partly because the thought of criminal prosecution from abroad seems daunting. Fewer still realise that the 9 April 2026 ruling has just confirmed the route covers the largest line on their bill. The procedural mechanics are familiar to French criminal practitioners but worth flagging for any landlord — domestic or foreign — who has not yet had to use them. The complaint is filed with the parquet (public prosecutor) of the location of the offence, typically where the assets were shuffled or the company was dissolved. The landlord can be a partie civile in the criminal proceedings, which gives them direct civil-recovery rights inside the criminal case rather than having to run a parallel civil action. The threat of personal criminal prosecution against the gérant of a corporate tenant — three years’ imprisonment, a permanent criminal record — is, in our experience, often a more effective negotiating lever than another civil enforcement order would have been.
The limits — and why the criminal pathway is not a magic bullet
Three honest caveats before this is mistaken for a blank cheque. First, the offence requires proof of intent to dodge the judgment — visible asset-shuffling, organised company-restructuring, deliberate hiding of income — and not just plain insolvency. A tenant who is broke because they are broke is not a criminal; a tenant who is broke because they shuffled their assets after the eviction order is. Second, the route works best where the assets being shuffled are visible and traceable — corporate share transfers, real-estate moves, vehicle titles, declared income. Where the asset-shuffling is small-scale individual cash hiding, the prosecutor may decline to take the case. Third, even with a successful criminal conviction, the underlying debt only gets paid if there are still seizable assets at the end — the criminal sanction (prison and fine) is paid to the State, not to the landlord. The partie civile portion of the case still has to find an asset to attach.
Frequently asked questions
What is “organisation frauduleuse de l’insolvabilité” in French law?
It is the offence at article 314-7 of the Code pénal: a debtor (or the gérant of a debtor company) who organises or aggravates their insolvency in order to escape executing a court order against them is liable to 3 years’ imprisonment and a €45,000 fine. The offence was created by the Loi n° 83-608 du 8 juillet 1983 to give criminal protection to creditors who are not in a contractual relationship with the debtor — chiefly tort victims, alimentary creditors, and (per the 9 April 2026 ruling) landlords on the post-termination occupation-indemnity portion of their bill.
Does this apply to residential as well as commercial tenancies?
The case at the 9 April 2026 ruling is a commercial lease between two companies, not a residential let — and on a strict reading the criminal chamber has only ruled in that commercial context. The underlying legal principle — that post-termination occupation indemnity is quasi-delictual under article 1240 of the Code civil — has been confirmed by the third civil chamber in residential cases (Civ. 3e, 1er avril 2009, n° 08-13.508; Civ. 3e, 15 février 2018, n° 16-13.216), so the most likely outcome is that the same characterisation carries over to residential leases governed by the loi du 6 juillet 1989 régime. There is no obvious reason why the residential analysis would differ. But a landlord who wants to be cautious should treat the residential application as highly likely but not yet judicially settled by the criminal chamber on a clean fact-pattern.
Can I file a criminal complaint as a non-resident foreign landlord?
Yes. Filing a criminal complaint (plainte) is open to any victim of an offence committed in France, regardless of the victim’s nationality or residence. The complaint is filed with the procureur de la République of the relevant tribunal, and is best handled through a French avocat — the procedural and evidentiary expectations are unlike those of common-law systems, and a non-resident filing without French representation is unlikely to be taken seriously by a busy parquet.
What’s the difference between unpaid rent and the occupation indemnity?
Unpaid rent and charges that accrued before the lease was terminated are still owed under the lease itself — they are contractual. The occupation indemnity is what the tenant owes for the period after the lease has been terminated, when they are staying in the property without legal title. The indemnity is typically set at the level of the previous rent (sometimes higher), it is computed by the civil court when it terminates the lease, and — under the 9 April 2026 ruling — it is quasi-delictual rather than contractual. Only the post-termination indemnity falls within article 314-7’s criminal scope.
What evidence do I need to prove “organisation frauduleuse”?
The prosecutor needs to be persuaded both that the tenant (or gérant) was a debtor under a covered judgment and that they took identifiable steps to make that judgment unenforceable — share transfers for symbolic prices, asset moves to related parties, sudden dissolutions, hidden income, etc. The classic evidence is the same kind of paper trail that any civil enforcement officer would already be developing: extraits K-bis showing share transfers, bank statements showing sudden withdrawals, registry filings showing asset moves. A French avocat can build the file alongside the civil enforcement.
Can the criminal route accelerate civil recovery?
It can, in two ways. First, by being a partie civile in the criminal proceeding, the landlord’s civil claim is heard inside the criminal case rather than as a parallel action — which often means a faster path to a civil-side judgment. Second, the prosecutor’s investigative powers (perquisitions, mandatory document production from banks and registries) can surface assets that civil enforcement officers couldn’t reach. Neither is automatic — the parquet has to take the case — but where the case is taken seriously, the criminal pathway can move faster than the civil one.
