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Leaseback Properties Contract written with wilful misrepresentation

The judges cancel the lease. The operator of the French leaseback property (tourist residence) is not entitled to an eviction indemnity (damages called in French : indemnitu00e9 du2019u00e9viction).

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Leaseback Properties Contract written with wilful misrepresentation

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  1. French Leaseback

  2. BUYING / SELLING or RENTING a real estate in France can be tricky You want to buy or sale aFrench Leasebackor a property. Many issues arise when you buy and sell or rent real estate in France :

  3. Breakdown of appliances before settlement • Rent review in France • Buying real estate in France: Preliminary agreements • Deposit after signing a preliminary agreement ? • What contract should my French lawyer review ? • Selling Real Estate in France

  4. Choosing a Real Estate Agent in France • What kind of contract should I sign with the real estate agent in France ? • Eviction of a Tenant in France (unpaid rent) • Buying property in France that needs refurbishing • Real estate Latent Defects (hidden defects) • Can I terminate the lease ?

  5. LEASEBACKINVESTMENTS IN FRANCE ARE COMPLICATED There are specific considerations for French lease back investments :

  6. Termination of a Commercial Lease due to unpaid rents • Termination of a Commercial Lease in France • Charges and Commercial Lease in France • Obligations of the managing/operating company • Responsibilities for lease hold repairs. • Selling a Commercial Lease in France

  7. Legal solutions and Litigation in France • The notice period under the French Law • What should I do if my tenant in France is not paying rent ? • 4 pitfalls to avoid when investing in a student residence • Trap: serviced residence rents which are too high • Service premises in a co-ownership

  8. French leasebackproblems

  9. 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.

  10. 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).

  11. 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.

  12. 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. The leaseback 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 aleaseback scheme.

  13. 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 real estate agent and the notary doesn’t explain it the buyer. For instance, if the lessee wants to renew the lease, the owner cannot refuse without paying damages (indemnite d eviction). The only way to avoid paying damages is to prove a major breach of contract by the tenant (operator).

  14. THANK YOU FOR WATCHING

  15. THEEND https://frenchrealestatelaw-traesch.fr

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