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The buyer would ideally been informed by a French lawyer in the process of french investment and acquiring properties for sale in France.<br>When buying an investment property in France, you donu2019t think the tenant could not pay rent. It happens sometimes with rental properties in France (French Alps, riviera, Paris u2026).<br>The rental income of this French property funds the payment of your mortgage. You have to move quick and efficient. Only a specialized lawyer in France can provide you with this results on the long term.
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Welcome To French Leaseback
FRENCH LEASEBACK : TERMINATION OF THE LEASE WITHOUT DAMAGES (INDEMNITÉ D’ÉVICTION) 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. 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.
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. Indeed, the cost of more than € 13,000 claimed as compensation for eviction weakened the profitability of the operation for the owners. The legitimate belief in a waiver of the lessee continued throughout the lease. They served a notice without eviction compensation. It was served in accordance with paragraph 6 of the lease.
French leaseback problems 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. 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).
Tax cuts, vat refund and rental income 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. The french tax agency does not collect VAT on these sales. This tax cut comes from the french law voted by the Parliament. The French government wants to boost the real estate industry. Construction and tourism are creating a lot of jobs in France. The idea is to put on the market enough holiday homes and flats to rent for few days or a week. Theleaseback scheme works around an operator, who rents to tourists or students. The operating company has to paid guaranteed rent. It means the yearly rent is the same, even if the flat isn’t rented during the low-season. The leaseback owners are supposed to be paid every year without having to care about the daily business of the tenant. Tax cuts, vat refund and rental income are the main reasons for buying a leaseback scheme.
Why is there a problem with French Leasebacks? Why are so many owners are trying to sale by publishing on real estate websites specialized in french leaseback resales ? Many buyers have been misled by the leaseback companies. The purchasers and future owners think themselves as consumer. But under the French law, they are more merchant and professional, regarding the lease (and not the buying of the real estate). So, the owner is a commercial lessor and the lessee (tenant) is supposed to be the weak party, like a consumer ! Yes, it is outrageous ! But why? The buyer of a French leaseback property signs a commercial lease, when buying the real estate. The year lease is a commercial lease. It means that a complicated set of rules applies to this contract.
The common expenses and fees of the managing company are increasing After 9 years (or 18 years), the management company raises the fees and the common expenses of the real estate increase. The guaranteed yearly return is decreasing too.
The operator is looking for a rent drop A second issues concerns the rent. After the first lease of 9 years usually, the tenant can fill a case in court to ask for a new calculation of the rent. The court will appoint a judicial/court expert in order to decide on the proper rent according to the market of accommodations. The rent will often decrease. If the yield decrease, the value of the property sinks. Some owners regroups. Other try to ask to the European Union to intervene.
For More Information Please Visite The Below Link https://frenchrealestatelaw-traesch.fr/leaseback-indemnite-eviction/ https://frenchrealestatelaw-traesch.fr
