Residhotel (Rhode Tourisme)

28 October 2008

I have an apartment is a residence Belles Roches in Notredame de Bellecombe. It has been leased to them for three quarters so far with the first delayed by a month, the second ok and the third due on October 15th not paid. After much pressure they reverted to say economic circumstances were very difficult and were looking for a 40% reduction in rental although I have nothing in writing from them yet. I am aware of a similar situation in their development 'Splendid' where they are also looking for 40% reduction which all seems to convienent to me.

Is anyone else having similar experiences with them and is there a sense that they are seeking to profit from the current economic conditions and demand a 40% reduction from everyone?

I would be interested in making contact with other owners from Belles Roches.

 

Submitted by Brian L on

John - I understand that it is only the tenant that can withdraw from the contract after 3 years not us the landlord.


Mutley - if I were you I would not sign any contract unless you can include a contract to null this 3 years business.


Noel - what happened with your situation?


Seamus - you sell these leasebacks - do you ever warn anyone about this 3 year termination possibility?


Brian L


Submitted by mutley on

Brian


I have and will continue to refuse to sign. Thing is my leaseback is in a national park and I think one of the planning restrictions was that all properties had to be used for Residence De Tourism and not private use.


The sales agent is well known for misleading clients . I got given a set of projections for income etc that was non contractural but what my sale was based on. It has proven to be useless.


I then got issued with an English copy of the lease that said rents were to be paid a year in advance. However when I had the French version of the lease I was to sign translated, it said a year in arrears.


I had a letter from the TVA people the other day telling me I have taken delivery when I have told the developer I refuse to take delivery until the lease is in order and I have officially signed for the property.


I am now putting this all in the hands of a French lawyer but cannot see how the developer and sales agent have a leg to stand on.


If I were you I would refuse to sign and take action in the form of command de payer and then put the management company into administration. There are a few clever people on this site so keep your eyes peeled on a daily basis for advice.


I am very slowly getting the impression that the French government are getting concerned about all of this and will use a few bench mark cases to lay down a marker as to how sales agents, developers and management companies will be dealt with in the future.


Mutley

Submitted by jaward on

Seamus,


You say "that a management company cannot change a lease unless you sign agreement to the change".So does that mean they cant impose the 3 year break unless you sign and agree it.Or does it mean they have an automatic 3 year break clause weather you agree and sign it or not?



John

Submitted by Brian L on

It looks to me that leasebacks are not a secure investment unless you can get an agreement from the management company not to withdraw after the 3 year periods. This is on the assumption that you know about this potential problem and perhaps this is where a good lawyer comes in - I wish we had used a good one. I am not sure from memory if the notaire was involved with our Bail.


Brian L

Submitted by jaward on

I have been involved with leasebacks for over 6 years and this is the first time i have heard of the 3 year break clause.This would have a major impact on your leaseback if implemented!


Luckily it hasn't happened to me yet!.but i would of thought you would have good grounds for sueing a Solicitor,Notaire or indeed the agent.


With hindsight i wouldn't expect an agent to point it out,much the same as the co-op fees!.But i would expect a solicitor to!



John


Submitted by srunner on

Happy New Year to all of you.


Just a quicky. I am not a lawyer but I have been following the evolution of the Residences de Tourisme in France for now 3 years. I own a leaseback property in the Alps and got several problems with the managment company. We are now "free" as our managment company has been liquidated and is off. We have refused all proposals of other management companies as they do not match at all our initial conditions (the ones we had when we bought the property and the ones we were supposed to get).


The notaire should have explained you what a leaseback is... It is supposed to be part of his job.


However several French owners are now sure that the notaires used in those transactions are part of the system and would not say a word about leaseback and the commercial law. If they would have, they might have lost the sale!


The tenant can break the leaseback (it is a commercial rule called the 3 - 6 -9, which correspond to the years when the lease can be broken). They don't need to send us (the owners) a paper or a legal notice... and believe me a lot of them just sell your lease to another company once you have accepted the rent deduction or anything else!


The tenants can also stop paying our rents whenever they want!


We CANNOT usually terminate the contract.


However if the tenant does not meet one of the terms or conditions written in our lease, we can sue them and the judge can break the lease.


So If they stop paying (the payment is one of the conditions of our lease), please write them a letter asking them to pay you, then contact a Huissier (if you have not received the rent) and send a Commandement de payer. Once done, contact the judge and Tribunal de Commerce and get your lease broken. Or if you are several on board, get together and ask the judge to decide if the company can continue or if it can be liquidated.


At the end of the leaseback contract if we want our flat back and do not renew the lease, we have to pay them "une indemnite d'eviction" - an indemnity equal to at least a year of the rent they have earned ... No-one (notaire, agent or someone else) has ever told me that before... we (French owners) are getting to discover that!


VAT: you have to refund it: if 1/ you sell your property, or if 2/ stop letting it


Submitted by jaward on

Noel


If you were on the wrong end of this 3 year break clause,i would have thought it was more than worth doing.


If you were sitting there with no rent after 3 years and the solicitor or agent(or both) hadn't pointed out this clause(mine didn't) you would be pretty miffed and inclined to sue.


It would be easier if your agent or solicitor was U.K based.As i said you would have good grounds as this a major clause!


Regards


john

Submitted by jaward on

If your spending between 70,000-200,00 and more on a leaseback it is not unreasonable to be told of major clauses like this.


I know it is a French law but it seems unfair that the Tenant(Them) is only committed to 3 years and the Landlord(us) is committed to 9 years!


It would seem from the posts on this forum,not many,if any,people knew of this clause!


Most probably used a solicitor and all used an agent,it shows the quality of legal advice that was given!


Regards



John


Submitted by srunner on

Noel,


I agree ... however in practise, everything is different.


First a lot of mgmt companies do not pay the rent, it is rather difficult to sue them if you are alone. However alone you might get your lease back easier, but then you might have to pay some "charges" to the mgmt company which will not let you alone...


I was not at all aware of this 3 - 6 - 9 when I signed the lease & bought the flat.


It is common practise to avoid sending a legal document... bailiffs are expensive in France, some mgmt companies do not pay the rent nor the taxes so why shall they pay a bailiff?


"my lease says that the tenant agrees not to seek an indemnity payment at the end of the contract " good, but we have seen that at least in one residence such thing was mentionned but the mgmt cpy took the owners to the court and she won! The owners had to compensate for the lost of activity...


According to some lawyers even if an amount is written, it can be changed (increase) at the time of the termination of the contract.

Submitted by mutley on

John


Watch this space.


I am flying to France on Friday to instruct a lawyer to fight for me over the fact that I was not told about the 3 year rule and neither was it mentioned in any sales projections I was given.


Net result is that it was not mentioned to me until 85% of the purchase money was paid and I was handed a lease with no rises in rent, rents a year in arrears and a 3 year break clause. My argument is that it is not the produt that was sold to me by the sales agent who only showed a 9 year lease teerm with monthly income, index linked rents etc.


Mutley





Submitted by wayne on

My lease clearly states that should the management company miss one months rental then the I can evict without the need to go to court!!!!!


In reality this is total crap as Ive had to go to court and wait and wait and wait to get an eviction and my keys back....Now I have an appeal on my hands and am owed over 25k..someone with sense or even half a brain would tell the management company to to GFT and give you your keys but its not England but France!


So the lease isnt worth the paper its written on and French law or their justice system is flawed to say the least


Many agents and developers have made much money on these schemes..or was it scams..and legally in France they have done nothing wrong,in my eyes its nothing but fraud and embezzlement.


If it wasnt so serious it would be funny seeing them all go to the wall with the absence of the pound in years to come,trust me the British pound will speak volumes when they desert the French developers,agents and management companies in years to come.Bring it on lets see them all lose their incomes and investments like many Brits have had to.


Too many good people with the right attitude towards low risk investment have invested in this area only to be ruined by inappropriate advice and management companies who manipulate the law to their advantage without a care in the world for peoples livelyhoods.


Its sad to say but genuine people will be ruined by greedy unregulated filth that are involved in this whole scam.


I think its time the forums got together and organised a French and competent lawyer to take this whole issue up on a national level with both governments and to ruin these scam artists and all assosiated with it.Lets face it 1,000 peoples money would obtain a top lawyer with some clout to fight the overall case at whatever level was needed.


Harsh reply yes but its dog eat dog and the trailor park trash ripping us off belongs in the sewer with all the rest of the crap .





Submitted by srunner on

You are right: it is fraud and embezzlement.


Several really good & highly competent lawyers are working on the case in France. A lot of lawyers have been under high pressures as it is a national and international problem.


Several associations wrote to the government, some answers have been obtained but they are not sufficiant enought.


The press speaks about the Residence de Tourisme and the troubles, in UK and Irland you should contact them and send some info to them.


Sign the petition if you have not yet done it. http://www.petitiononline.com/131007/

Submitted by mutley on

Great thread guys keep it going.


Noel - my projections also say non contractural. However this was the only set of information given to me prior to signing a contractural reservation and paying a deposit. This who episode needs to be compared to the miss selling of endowments. Now do we all see the likeness?


I bought a new car at the weekend and was passed a brochure by the garage detailing the spec, heated seats, leather, 6 cd multichanger. This information was provided to me to make my decission on.


If I get my car and it does not have a 6 CD multichanger in, unless I have opted out of it and been told I will be very upset if it does not have one.


The sales figures issued should have had a declaration reading that figures may be different from development to development. Saying that the figures are non contractural will in no way alleviate the sales agents of their responsibility to inform me at the point of sale (point of sale being the payment of the deposit) if the information issued is incorrect and bears no relation to the product sold - and thats in the words of the person who sold me mine who has since been made redundant!


Paul


Dear all,


I have been in similar situation and I may tell you that every terms and conditions of business are included within the lease, t might hidden under some legal French but if something is not on the lease it cannot be enforced by either sides.
I have been assisted by a new company specialised in assisting French property invetors with their difficulties and I will suggest to contact them they may help you too. They are currently working on their website and email (as brand new) but you could contact them on nerc.concierge@live.ie


Chloe

Submitted by Brian L on

Noel


I think you missed this question previously - What was incorrect about the termination process of your management company and who is the management company?


Residhotel seem to be making a mess of their termination process at Golf Garden as some owners have received the bailiffs letter and some havn't and it may now be too late for the six month notice period.


Brian L

Hi,

Leaseback companies have
a staturoy right to claim damages from property owners in the event these decide not to renew the
lease beyond the initial 9 years period and subsequent renewed rental
periods. This is a statutory matter and leaseback companies cannot give it up in advance. Breaking a lease during the first 20 years
would not, in any event, be a good idea. It exposes you to likely tax penalties
i.e. partial repayment of the VAT rebate you benefited from. You may also have
to pay French CGT if you sell within 15 years.

So, if a leaseback company offers you a rent reduction against their undertaking not to seek compensation if you were to opt out of the scheme at the end of the initial rental period, don't be fooled: the answer simply is 'no'.

Angus

Submitted by Sheridan on

Capital gain? What capital gain??


How can anyone ever make a capital gain from this system which was supposed to be an asset but is in fact a huge liability. I have owned my leaseback for 5 years - property prices in the area have increased by 30% but because there is a cap of 2% in the lease, coupled with the fact that the true value of the property is always related to the yield, there is no chance of making a gain.


This year the management company offered me a truly derisory amount to market my property - very much below the price we paid 6 years ago and with extortionate commission to boot.

Submitted by jaward on

Seamus


I have just been going through my french paperwork for the purchase of a leaseback in 2003!.


I bought through Assetz(formerly French Property sales) and in there Question and Answer format it states the following:


Main Terms of the Lease


Duration of lease; Usually 9-11 years


My comments:No mention of any compensation payments to management company and no mention of the 3,6,9 year break clause that we know exists!


Question:What happens at the end of the 9-11year lease?


My comments:Again no mention of exit penalty!


Answer: As the freehold owner you can choose to sell,use or rent out your property whenever you wish.Alternativley you can renew the lease with the management company.


Question:Who pays the bills during the 9-11 years:


Answer:The management company pays for the upkeep and maintenance of your appartment along with all the utility bills you would still have to pay the local "Tax Fonciere".


My comments:Again complete rubbish!On one of my leasebacks the co-op fees were over 1300 euros in 2008.Quite substantial!


Question:What happens during the times when the residence is closed(in between seasons):


Answer:At these times you can use your property in addition to your allocated but a small admin charge is applicable.


My comments:Again rubbish!You cannot use the appartment out of season and recently Odalys have reduced the early season weeks to 1 week from 4 weeks!So to holiday for 2 weeks in low season you have use 1 of your high season weeks!


These are major untruths or omissions,which would have had a major impact on my decision to buy!


A clear case of misselling!Don't you agree?



Regards


John









Submitted by srunner on

John,


I asked the same questions in 2004 to my vendor and got the same answers as you... same comments.


Yes, it is a missleading case for sure. Contact a lawyer.


PS: you shouldn't have accepted the changes of contracts (week reduction).

Submitted by Sheridan on

As far as I can see, all these things are covered in Council Directive 93/13/EEC of 5 April 199 3 on unfair terms in consumer contracts:


"Whereas, generally speaking, consumers do not know the rules of law which, in Member States other than their own, govern contracts for the sale of goods or services; whereas this lack of awareness may deter them from diect transactions for the purchase of goods or services in another Member State."


"Whereas, the consumer must receive equal protection under contracts concluded by word of mouth and written contracts regardless, in the latter case, of whether the terms of the contract are contained in one or more documents."


Article 3


1. A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imabalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer."


Terms which may be regarded as unfair:


(j) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract.


(k) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract."


It would be interesting to get an opinion from a solicitor on this.

Submitted by jaward on

Srunner,


I havn't accepted any changes!It came in this years booking form.


In previous years there had been 4 weeks in low season,now that is down to 1 week.Which means you cant have 2 weeks together without using 1 of your high season weeks.


As stated on my previous post,Assetz paperwork states that owners can use there appartment at "anytime".


Sheridan


You mentioned before that it was illegal for them(seller) not to present you with contracts in english.Mine was in French and suspect everybody else's is!


Would it also be illegal for them to continue communicating in French with ongoing contract matters?



Regards



John




Submitted by srunner on

Thanks John for your quick reply.


However it looks like a change of the contract's terms and conditions So they should have let you know well in advance those information & changes by registered letter

Submitted by Sheridan on

John,


The reference to contracts being in the purchaser's language came from the Timeshare Directive so I'm not sure whether it is possible to apply it in our situation.


Regards


Sheridan

Submitted by jaward on

Noel,


The number of weeks hasn't changed,the period which you can take them has!


They have shrunk the season by four weeks,no doubt to save on costs!.Even though they have a permanent manager living on site!


As for the original claim,that owners could use appartments all year round,has proved to be untrue!This was in the selling agents promotional material but probably not in the lease!


Regards


John



Submitted by wayne on

I think its time to wake up and smell the coffee,the contracts which have been signed are not worth the paper they are written on,indeed the only people they favour are the management compnay who can do what they like



The only way forward is legal action,swift and ruthless and get to the core of the problem,howere,lets face it the French legal system is as flawed as the contracts to dont hold your breath.


If you are lucky enough to win then again dsont hold your breath for any money,I have command de payer,attachment to bank accounts etc and eviction alllegally binding...have I seen any money yet..not a chance.


As for leaseback I can tell you its going to get much worse before it gets better,my advice is to evict and form a co op whilst managing all bank accounts yourself.


Not too long and I should have three companies bankrupt,jobs business and personal assets.....oh and hopefully a criminal investigation


One day I will wake up feeling good about all this I promise



Submitted by Eddy on

Dear all,


My partner and I have recently founded a company to assist property investors. NERC Concierge Ltd was set up to assist British and Irish investors in the management of their French property portfolios. We formed the company having identified the need within the investors market to help them understand, manage and control their own personal investments. We understand that buying property is not only a substantial financial commitment but also a long term temporal one. It was with this in mind that they decided to create a company that is dedicated to providing professional, independent guidance and advice to Irish investors who have bought French property.

Regards,


Eddy Regnier
(no general marketing allowed - although you may reply directly to a post on a directly related topic)

mccos39851.4272800926

Submitted by jaward on

There seems to be loads of these "assist companies" that are coming out of the woodwork to rescue us downtrodden leaseback owners with problems!


Pity they wern't around with " words of wisdom" before we bought!



John

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