French Real Estate and French Leaseback

1. Welcome To French Leaseback

3. The (tenant) lessee, is a company specialized in the management of leaseback properties. However, the operator writes the lease with bad faith. Because he pretends to waive in advance his right to damages, if the the lessor end the contract. (eviction indemnity/(damages called in French : indemnitéd’éviction). According to the French law, the tenant (lessee) cannot waive in advance and in the lease his right to an eviction indemnity in case of non-renewal of the commercial lease.

5. He can waive this right to damages AFTER signing the commercial lease.But in this case, the operator is a pro of this industry. He waives his right knowing well that this clause has without legal ground. Even if, it was for the lessor a substantial condition of the contract, ie one main reason why the buyer agreed to the leaseback.

7. The tenant (operator) acted with the intention to willfully misrepresented the content of the lease contract. The operator of the leaseback property falsely reassured the buyer/lessor in the legitimate belief that his renunciation constituted a real commitment. This behavior is analyzed as a “wilful misrepresentation” (dol in French), meaning a fraud when writing the contract.

9. The buyer of the French leaseback property signed a leaseback contract with a operating company. However only the tenant wrote the lease contract. The waiver to an eviction indemnity could only appear as a decisive element of the deal. Most importantly, the buyer of the French leaseback would (or might) not have signed the contract. If their attention had not been attracted by this financial interest, they might not have contracted.

11. Otherwise, the tenant is claiming a statute of limitation of 2 years to cancel the lease. However, the statute of limitation of 2 years begin to run, when the victim is informed. In this case, it is the date of the registered mail addressed to the owners by the operating company. That’s why the wilful misrepresentation (fraud) leads the judges to cancel the commercial lease.

13. Furthermore, the court decides the paid rents were due for operating the leaseback property without a lease contract. The cancellation of the lease means it is like it had never existed.

15. Since the 80’s and the 90’s, several thousand of owners bought leaseback property in France. The operating company states the return profit would be 4 % to 5 % per year. Sometimes the builder sells himself the real estate.During the 2000s, the operators marketed the French Leaseback overseas and especially in the UK and Italy. It was marketed as a risk-free and high return investment.

16. The leaseback schemes were aimed to put enough renting properties on the touristic areas of France. The government and the big leaseback companies present it as a win-win solutions for operator, investor and the economy. The leaseback companies lobbied the MP’s int the French Parliament.A lot of buyers thought they will be able to have a holiday home in France after 9 years (or at least 20 years).

18. The purchaser benefits of a VAT refund, because his deal is funding a new build in France. The operating companies and/or the construction company doesn’t has to finance with costly bank loans.

21. For More Information Please Visit The Below Link https://frenchrealestatelaw-traesch.fr/leaseback-indemnite-eviction/ https://frenchrealestatelaw-traesch.fr

22. Thank You

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