This article is general information for foreign owners of French property, not legal advice. Limitation periods turn on your exact dates, so speak to a French avocat about your own situation before acting. The English Investor accepts no liability for decisions taken on the basis of this article.
Last Updated: June 2026
If you bought into a French property scheme on the promise of a tax break and a tidy yield, and the yield never showed up, you have probably had a dark thought at some point: could I sue the people who sold me this? And then a second, more deflating one: surely it is too late by now. For a long time the courts of appeal agreed with that second thought, and they agreed with it ruthlessly. Bought a defiscalisation flat that bled money from year one? Then year one is when your clock started, and five years later your right to complain quietly expired while you were still hoping things would turn around. On 10 June 2026 the Cour de cassation looked at exactly that reasoning and threw it out. The decision matters to anyone, foreign or French, who was steered into a French rental scheme that underdelivered, because it pushes the starting line for suing your adviser meaningfully later, and gives a lot of apparently dead claims a pulse.
The set-up: a tax-break scheme that quietly lost money
The facts are wearily familiar to anyone who lived through the defiscalisation boom. Between 2006 and 2008, an investor (a Monsieur G and his societe en commandite simple, a form of limited partnership in which he was the manager and majority partner) bought several properties that came with income-tax reductions, meant to be let out, and bankrolled by bank loans. He did not pick them off a shelf: two advisory and investment firms, a conseil en gestion de patrimoine outfit and an investment company, told him this was the move. The promise, written into the contract, was a defined profitability threshold. The reality was rent that came in under the running costs.
Years later, in August 2020, the investor sued both firms for manquement a l’obligation de conseil (breach of the duty to advise), pointing to two things: rental profitability that fell short of the forecasts, and an over-valuation of the properties that became undeniable when one of them was resold at a loss on 11 February 2016. He wanted his losses back. The advisers had a simpler answer: you are too late.
What the law actually says about “too late”
French law gives you, broadly, five years to bring this kind of claim. For dealings between a business and a non-business the source is article L. 110-4 of the Code de commerce; the general civil rule sits in article 2224 of the Code civil. The interesting part is not the length of the period but when it starts. Since the 17 June 2008 reform of civil limitation, France uses what lawyers call a point de depart glissant (a sliding start date): the clock begins on the day you knew, or ought to have known, the facts that let you bring your claim. Not the day you signed, not the day the adviser slipped up, but the day you could reasonably have seen the problem.
For a liability claim specifically, the Cour de cassation spells out the full checklist. The clock runs from the day the person claiming to be a victim knew or should have known four things together: the damage, the event that caused it (the fait generateur), who was responsible, and the causal link between the two. Miss any one of those and the clock has not started. Hold that thought, because the whole case turns on the first item: the damage.
The Court of Appeal’s mistake: treating a bad year as the damage
The Cour d’appel d’Aix-en-Provence took the brisk view. It said that the moment the investor actually put the properties on the rental market – 2011 for Monsieur G personally, 2014 for the partnership – he could see, simply by setting the rent he collected against the costs he paid, that the first number was smaller than the second. At that point, the court reasoned, he was perfectly able to question whether the investment was really going to work, by comparing the rental potential against the original financial simulation. So that, said Aix, is when he “knew.” The fact that the losses got worse in later years was beside the point, because he already knew. And the resale at a loss in 2016 added nothing new; it just confirmed what was already obvious. Claim filed in 2020, clock started in 2011 or 2014, five years long: dead on arrival.
It is a tidy argument. It is also, the Cour de cassation held, wrong.
The ruling: a “probable” loss is not a realised loss
The chamber’s answer was short and pointed. Knowing, at the end of the first year of letting, that the operation was probably going to run at a loss did not amount to the realisation of the damage being claimed. In the Court’s words, the investors’ knowledge of a “probable loss-making profitability of the operation at the end of the first year of letting did not characterise the realisation of the damage.” Because the appeal court had started the clock on a damage that had not yet definitively happened, it had broken the very texts it was applying – articles 2222 and 2224 of the Code civil and L. 110-4 of the Code de commerce. The decision was quashed and sent back to a freshly composed Aix-en-Provence court, with the two firms ordered to pay costs and €3,000.
This is the bit that rescues claims. Profitability is a long game by nature. Something that loses money in year one can come good by year five, and something that looks fine early can rot later. The Court accepted that logic. A few months of disappointing rent, even a doubt forming in the investor’s mind, is not the damage; it is at most a worry that the damage might arrive. Only once the operation has revealed itself, over a longer run, as genuinely less profitable than the contract promised does the loss become real, and only then does your five years begin.
So when, exactly, does the clock start? The Court won’t say
Here is the frustrating part, and the honest one. Having ruled out the first loss-making year, the Cour de cassation declined to say what date does start the clock. It simply sent the case back to Aix-en-Provence to work that out. All we are told is that enough time letting the properties had to pass before anyone could say, without real doubt, that the scheme had ended up less profitable than the contract had promised.
What fills that gap is the Court’s own recent case law on near-identical schemes, which points at a workable answer. In a defiscalisation investment built around a loan whose capital was only repayable after ten years, the Court held that the clock starts the day the buyer learns the real bad news – that they will not be able to resell the property for enough to clear the borrowed capital (Civ. 3e, 1 February 2024, no. 22-13.446). In another scheme assembled purely to capture a tax advantage, it framed the trigger as the moment the “risk” the structure was meant to dodge actually lands (Com. 21 June 2023, no. 21-19.853). And the general rule it keeps repeating is that contractual-liability time only runs from the realisation of the damage, or from the day it is revealed to the victim if she can show she did not know earlier (Com. 5 March 2025, no. 23-23.918).
| Ruling | The scheme | When the five-year clock starts |
|---|---|---|
| Com. 10 June 2026, no. 25-14.312 | Tax-break rental properties, profitability below the contract forecast | Not the first loss-making year. Only once the shortfall is definitively realised over a longer run (exact date left to the lower court) |
| Civ. 3e, 1 February 2024, no. 22-13.446 | Defiscalisation with a loan whose capital was deferred ten years | The day the buyer learns they cannot resell for enough to repay the borrowed capital |
| Com. 21 June 2023, no. 21-19.853 | Financial operation set up to capture a tax advantage | When the “risk” the structure was meant to avoid actually materialises |
Read together, the message is consistent: the trigger is an objective, datable moment when the scheme is shown to have failed on its own terms, not the first flicker of disappointment in the investor’s stomach. The most useful place to look for that date is usually the paperwork that sold you the scheme. These contracts almost always carried dated projections – a year by which the thing was supposed to break even or deliver. Miss that target by a clear margin, and you have your moment of realised damage, and your clock.
What this means if your French scheme underdelivered
A great many foreign investors were sold French tax-shelter property over the last two decades – leaseback tourism residences, managed-residence formats, and the various dispositifs that promised income-tax reductions in exchange for letting under conditions. A fair number of those underdelivered, and plenty of owners assumed, reasonably, that the window to complain about the advice had long since closed. This ruling says: not so fast.
The practical takeaways are these. First, do not assume your claim is dead just because the early years were poor; under this decision a merely probable loss never started your clock, and the promoter’s lawyers know it. Second, the realistic anchor for your five years is the dated profitability promise in your own contract, not the first weak rent statement, so dig that paperwork out. Third, and this cuts the other way, the clock is not infinite: once the scheme has clearly and definitively missed its contractual target, your time is running, so this is not a reason to keep waiting and hoping. The whole point of the regime many of these schemes used, the furnished-rental tax status that powered so much defiscalisation, was long-run depreciation and yield; when the long run arrives and the numbers are still red, that is your signal, not your cue to wait longer. And if you are weighing a fresh scheme today, the current crop of incentives like the amortisation-based Jeanbrun relief that replaced the lapsed Pinel deserve the same hard, dated-projection scrutiny the courts now expect of the advisers who sell them.
One honest caveat. This was a commercial-chamber decision involving a partnership and its manager, so it sits in the world of business-to-business limitation under article L. 110-4. An individual consumer would more often rely on article 2224 of the Code civil alone. But the principle the Court applied, that a probable loss is not a realised one, is general, and there is no reason it would treat a private buyer more harshly than a businessman.
FAQ: suing over an underperforming French property scheme
How long do I have to sue the adviser who sold me a French property scheme?
Broadly five years, under article 2224 of the Code civil (or article L. 110-4 of the Code de commerce for business-to-business dealings). The hard question is not the length but the start date.
When does the five-year clock start?
On the day you knew or should have known the damage, what caused it, who was responsible, and the link between them. After the 10 June 2026 ruling, the “damage” in a profitability claim is not your first loss-making year; it is the point at which the scheme is definitively shown to be less profitable than the contract promised.
My scheme lost money from the very first year. Is my claim automatically out of time?
No. That is precisely the reasoning the Cour de cassation rejected. A loss that was only “probable” at the end of year one did not start your clock.
So what date should I treat as the trigger?
Usually the dated profitability projection in your own contract. Once the operation has clearly missed that target by a real margin, the damage is realised and your time starts. A French avocat should pin the exact date to your facts.
Does it matter that I live abroad?
No. The limitation rules attach to the claim and the contract, not to where you are tax-resident. A non-resident investor sued in France is on the same clock as a resident.
Is the case finished?
No. The Cour de cassation overturned the “time-barred” finding and sent the case back to a differently composed Cour d’appel d’Aix-en-Provence, which now has to fix the actual start date.
