Nervous First-Timers

Hi Tony,

Quite simply, don’t do it.

We have a leaseback which was for a time managed by MMV . When they decided the financials did not stack up they introduced a 3rd party to try and bully owners out of rent . Thankfully we have a strong owners group and now self manage the resort. But it has been painful. You have maintenance, council tax,insurance, accounting fees as well as the mortgage to pay. Just look at all the resales available to see the issues.

I do not know one owner that would do it again.

Hope this helps!

This article may help you make your decision - it is in French but an online translation will give you the gist.

 https://www.leblogpatrimoine.com/immobilier/residence-lmnp-une-baisse-de...

A key message from the article is this:

"Investment in LLM residence services (leaseback) is therefore a mixed investment between financial and real estate. It is indeed a real estate investment, since the underlying is a building, but its value is in no way related to the property value but very much to the quality of the operation by the operating company and the level of rents paid." (my emphasis)

If you are fiscally resident in France (i.e.a full-time tax-payer), there can be some advantages of leaseback for supplementary retirement income or a means of inheritance planning. 

If you are going to be relying on the rent to pay a mortgage be very aware that rents can be, and often are reduced, and you have little or no recourse to object. Consider the situation that the management company either goes bust or sells your lease on to another operator, and no rents are paid. You will still be liable for the mortgage.

As an owner you will have joint liability for any defects or problems with the building that are not covered by insurances. 

As the article states, this is really not a typical property investment, and at the end of the lease period (usually around 20 years) the property is likely to need so much refurbishment it will likely not have appreciated in value - it may even be worth less than you paid.

Caveat emptor

I have recently purchase a property in Les Menuires (run by MMV) and can give generally positive feedback.  

It's great to own a piece of the mountains, my family love it, I more.  I'll be doing my fourth visit next week after it was finished in December 2016.  

Of course there have been teething problems, but it's a brand new building!  You'd expect that with a new shed, never mind a hotel.  We've had a leak in the shower, a chipped tile, a wobbly toilet seat and a dripping tap.  The wifi hasn't been the best, and the ski lockers were a bit small but I understand that all of this has now been addressed.  At the end of the day, it is in the interests of the management company to make any repairs since "guests" will complain, it'll be posted on trip advisor and will be for all to see.  

They've made some frustrating changes to the weeks that they deem "low mid and high and very high", which hasn't worked for me greatly, so I would be careful what own use you sign up for.!  Just double check the weeks that you'll want and what they are this year. If you plan to go at Easter, check what level of week it is (high, very  high etc).

Apart from that, we're very happy.  I adore the place.  MMV are sometimes a little frustrating and slow to act, but they do eventually, and it's more likely that slow action is more a problem to them than me.  Contact me if you want to chat.  

Dear sir,

Concerning the "Le Chalet du Soleil" residence in Les 2 Alpes, this is a project developed and built by Terrésens group. The residence will be managed by its subsidiary: My Second Home by Terrésens.

There is a misunderstanding because MMV doesn’t intervene in the management of this residence.

Don’t hesitate to contact your seller or our Group to have more information about Terrésens and My Second Home

Best regards,

Dear sir,

Concerning the "Le Chalet du Soleil" residence in Les 2 Alpes, this is a project developed and built by Terrésens group. The residence will be managed by its subsidiary: My Second Home by Terrésens.

There is a misunderstanding because MMV doesn’t intervene in the management of this residence.

Don’t hesitate to contact your seller or our Group to have more information about Terrésens and My Second Home

Best regards,

Terrésens Group

Tony,

Don't do it, most people here are victims of the leaseback scam. Buy a standard property somehere in France where you can rent it out and use it as you wish. Leaseback is a total scam which keeps the pockets of developers, avocats, notaires, and management companies lined. These French crooks will screw you over and over again. You need to have your head examined if you invest having read the forum posts here.

Don’t buy!!!!

Do not take any advice from anyone who has recently bought an MMV or Terresens property, if they give positive feedback, it is because the problems are yet to come.

subsidiary company of Terresens will simply be a means of later saying that unfortunately due to your residence and subsidiary company not

performing well, we will take over the residence as long as you accept a reduction in rental income. 

From recent experience, an MMV subsidiary company MMV by Terresens (mmm companies not linked ???) recently played this trick on our residence. The bully tactics then begin, apply time pressure, rental income not paid until you accept a rent reduction, if you don’t accept a rent reduction you will end up in a legal limbo land where the company goes into receivership and is protectod from its debtors?

Scam, Scam, Scam 

Oh yes, also do not believe a word that a Terresens or MMV employee says to you, make sure you do your due diligence too!

I don’t know how the employees of these companies can sleep at night, knowing that they are just screwing the potential buyers of these leaseback properties! Their mothers will still be proud of them ? 

The set-up and management of these type of holiday properties can be very confusing. Typically a developer will set up a subsidiary to manage the residence. Then the developer may sell the subsidiary management company to another group, who may or may not run the property well. Individual management companies are often set up for a specific property so that if there are financial difficulties, the specific management company can be made bankrupt without affecting a parent company or directors. 

If you want to check the financials of Terresens or their management subsidiary (Terresens Vacances) you can look on the French Companies register (Infogreffe)

https://www.infogreffe.com/recherche-entreprise-dirigeants/resultats-ent...

It might be worthwhile to find out what role MMV will play in your property if they are not the management company.

There will, in addition to the holiday management company, an co-ownership management company (syndic) which you will have to pay for as part of your on-going fees. 

Stay well away from leaseback..its a total scam and will ultimately break you both financially and emotionally... Nobody wants to know when it all goes wrong(which it will...)...again from an owner who has spent the last ten years being disappointed with over three management companies who promised the sun moon and stars( one of then Irish) and then screwed us all royally...