Indecent housing: the rental guarantee can be denied to the owner

A landlord enters into a residential lease with a tenant. A little later, he takes a guarantee from Action Logement to cover the risk of unpaid rents. He does not obtain rent payments from his tenant for a certain period of time, so he implements the guarantee and collects the arrears. The tenant refused to pay because the dwelling was subject to an endangerment order. When the owner requests the implementation of the guarantee, he does not inform Action Logement of the condition of his dwelling. Considering that there was deception, the Court of Appeal annulled the guarantee contract and ordered that the owner reimburse the amounts received in bad faith to Action Logement.

The Court of Cassation quashes the judgment of the Court of Appeal. When the dwelling is indecent, the landlord is acting in bad faith if he claims the guarantee of the unpaid rents from the surety organization. However, the contract of guarantee remains between the landlord and this body even if the judge can disregard the clause guaranteeing unpaid rents.

The Cour de cassation recalled that, without however annulling the contract between the parties, the court may refuse to have effect on one of its terms implemented in bad faith.