Note on Cass. com., 10 June 2026, no. 25-14.312, F-B
The intricacies of the law of limitation are reputed to be unfathomable. From the “thicket”[1] to the “sea serpent”[2] by way of the “chaos”[3], from the “dual time-limit” to the long-stop period, complexities abound.
One of them — and not the least — concerns the starting point of the extinctive limitation period. While the reform of 17 June 2008 considerably simplified matters by abolishing most of the special limitation periods, it opted for a “floating” starting point[4], which is not without raising certain questions.
In matters of civil liability, the starting point of the limitation period has, since 2008, been not the day of the damage, but the day on which the victim “knew or ought to have known” the facts enabling them to act, as provided by Article 2224 of the Code.
The rule is simple. Its application is sometimes less so, particularly where the damage manifests itself progressively. A recent decision bears witness to this, handed down by the Commercial Chamber of the Cour de cassation on 10 June 2026 and destined for the honours of the Bulletin.
In the case at hand, investors acquired, on the advice of two investment and wealth-management firms, several residential rental properties giving rise to tax reductions.
As is often the case, the expected profitability failed to materialise[5]. The rents did not cover the charges, and the resale of one of the properties was made at a loss.
In August 2020, the investors brought liability proceedings against their advisers for breach of their duty to advise.
The Aix-en-Provence Court of Appeal declared the action inadmissible as time-barred. In the view of the Aix judges, the investors were in a position to ascertain, “by comparing the income generated by the lettings with the charges they bore”, the impossibility of achieving the promised profitability, from the very first year of letting.
Yet the action had been brought in 2020, whereas the properties had been let as early as 2011. Accordingly, in the view of the lower courts, the action was time-barred, regardless of the fact that the deficits had subsequently worsened. The lower courts likewise treated the resale of the property at a loss as irrelevant.
Before the Cour de cassation, the investors challenged the time-barring of their action, arguing that, at the end of the first year of letting, they were not in a position to know the facts enabling them to act.
The Commercial Chamber, presided over by Vincent Vigneau, quashed the lower courts’ decision on the basis of Articles 2222 and 2224 of the Civil Code and Article L. 110-4 of the Commercial Code.
In the view of the High Court, “the investors’ awareness of a probable loss-making profitability of the operation at the end of the first year of letting did not characterise the materialisation of the damage for which compensation was sought”.
The focal point of the decision appears to lie in a single word: “probable”.
Indeed, at the end of the first year of letting, the damage was not established, but merely probable, so that the claimants could not be reproached for having remained inactive.
Since three decisions of 26 October 2022, the Third Civil Chamber has held that “in the case of tax-incentivised rental property investment, the manifestation of the damage for the purchaser can only result from facts liable to reveal to them the impossibility of obtaining the profitability anticipated at the time the contract was concluded”[6].
To the same effect, the Third Civil Chamber held, on 1 February 2024, that “in a tax-incentivised rental property investment operation involving a loan whose capital repayment was deferred for ten years, the starting point of the liability action brought by the purchaser against professionals for breach of their respective duties of information, advice or warning is the day on which the risk materialised, namely the day on which the purchaser learned that they would be unable to resell the property at a price enabling them to repay the borrowed capital”[7].
The decision of 10 June 2026 falls within this line of case law, the Commercial Chamber in turn aligning itself with the position established by the Third Civil Chamber. The starting point of the limitation period is neither the day the contract was concluded, nor the day of letting, nor even the day of the first loss-making financial year. It is the day on which the investor becomes aware of the impossibility of obtaining what was promised to them.
The solution appears well-founded: profitability is an elusive datum, and what is not profitable in the short term may become so in the long term. The investment in dispute, aimed at tax relief over several years, is set within the long run. Accordingly, a deficit at the end of a first year of letting reflects no more than a hazard. It reveals neither an “impossibility” nor any certain loss. Only the test of time will make it possible to become aware of that impossibility — unless the contract sets annual profitability thresholds.
It will be observed that, prudently, the Cour de cassation — which rules only on the law and not on the facts — leaves the fixing of this starting point in suspense. It will fall to the lower courts to determine from what moment the investors were aware of the loss-making character of their investment.
There is, then, no use in running: one must still set out at the right point.
Takeaways
In matters of tax-incentivised rental property investment, the starting point of the limitation period for an action based on breach of the duty to advise is not set at the first loss-making year of letting: a merely “probable” deficit does not constitute a certain loss.
The decision confirms the case law on the “floating” starting point, but leaves that starting point undetermined — a matter for the court of remittal to fix.
[1]Senate information report no. 338.
[2]A. Bouscavert, note on Cass. com., 10 June 2026, no. 25-14.312, Dalloz actualité, 24 June 2026.
[3]A. Bénabent, “Le chaos du droit de la prescription extinctive”, Mélanges Louis Boyer, PU Toulouse, 1996, p. 123.
[4]Ph. Malaurie, La réforme de la prescription civile, Defrénois 30 Oct. 2008, p. 2029.
[5]Cf. L. Thibierge, “De la rentabilité économique”, Revue des contrats 2023, no. 1, p. 59; “Défiscalisation : du miroir aux alouettes”, Revue des contrats 2023, no. 3, p. 37; “Quand l’investissement locatif s’avère déceptif”, Revue des contrats 2026, no. 2.
[6]Cass. civ. 3e, 26 October 2022, no. 21-19.898; Cass. civ. 3e, 19 February 2026, no. 24-11.109.
[7]Cass. civ. 3e, 1er February 2024, no. 22-13.446.
