The right of retention is an effective but often neglected mechanism in security law. Although it is widely recognised for movable property, its application to immovable property remains more delicate, raising questions about the rights and obligations of the owner of a property subject to a charge on immovable property.
A controversial legal nature
The right of retention is the right of a creditor to retain an asset until his claim has been paid in full. Its legal status has long been the subject of debate.
The Court of Cassation refuses to classify the right of retention as a real security. In a judgment of 20 May 1997, it stated that "the right of retention is not a security interest and cannot be equated with a pledge". However, it does recognise that it is a right in rem, enforceable against all persons.
This paradoxical position has puzzled legal scholars. The right of retention confers neither a right to follow nor a preferential right, which are classic attributes of rights in rem. Nevertheless, in order to fully understand its particularity within the property security hierarchyIts practical effectiveness makes it a genuine safety device.
Application to buildings: a winding road
Prior to 2006, the application of the right of retention to immovable property was highly contested. Case law generally ruled it out, particularly in the case of insolvency proceedings. The lack of publicity made its enforceability problematic.
The situation has changed. In a ruling handed down on 6 October 2009, the French Supreme Court (Cour de cassation) accepted that a right of retention could be exercised over real estate, even specifying that it "extends to the fruits" of the property.
There are several recognised cases of application of the right of retention on immovable property:
- Pledge of real estate (former antichrèse)
- Expropriation in the public interest
- Building on someone else's land
Fearsome efficiency
The strength of the right of retention lies in its position outside the competition. Article L.643-8 of the Commercial Code expressly places it "outside the ranking" in collective proceedings, alongside the property-security.
This privileged position gives the retaining owner considerable blocking power. Other creditors, even those with first-ranking securities, cannot recover the property without paying the returor.
The right of retention is therefore a powerful negotiating tool. A creditor holding the immovable can paralyse its forced sale and force other creditors to deal with it.
Special status in collective proceedings
In the context of a collective procedurethe right of retention remains effective. The Order of 15 September 2021 confirmed this situation by maintaining its enforceability against the insolvency proceedings.
This rule derogates from the principle of equality of creditors. Retractors are not subject to the deadlines or postponements in the safeguard plan, nor are they required to participate in the competition with the other creditors.
This privileged status explains why some creditors seek to secure a right of retention. It offers far greater protection than traditional guarantees such as mortgages.
However, the right of retention in property matters remains limited in application. Dispossession of a building is often impractical. Nevertheless, it remains a legal tool that should not be overlooked in the panoply of property guarantees.
Sources
- Civil Code, article 2286
- French Commercial Code, article L.643-8
- Cass. com. 20 May 1997, no. 95-11.915
- Cass. com., 6 Oct. 2009, no. 08-19.548
- Order no. 2021-1193 of 15 September 2021 on insolvency proceedings
EN 
FR