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
Is it too late to get out? Leasback is the worst investment you could ever make barring perhaps a wooden shack on a tropical island that gets hit by hurricanes on a regular basis.
i'm looking for feedback too... Did you collect some ?
Also did you signed for it ? I'm close to (after reading all the warnings !) and plan to better protect myself through contractual clauses like "No eviction indemnity after 9 years " and more. Would love sharing experience and advices !
Once a leaseback is signed there is no come back the indemity is written in French law and alwaays has to be paid.
When we bought our house, it was written that we could walk away at the end of the nine year with no penatly.
That wasn't true the law is in favour of the management companies. We had French Notaire and also English solicitors to act for us but no one told us about the Bail Commercial.
Think very carefully before you sign anything and know that if you want out the indemity will have to be paid.
As Wineflair and others have said, there is no 'protecting yourself' by adding clauses to the lease contract. The right to eviction indemnity is in French law.
I simply can't understand why anyone would even consider an investment such as this at this juncture with all the information that is out there.
There are plenty of places to invest money (if you have it). French Leaseback property is not one. Do yourself a favour and walk away when you have the chance. There are many many thousands of French & non-French citizens who would love to turn back the clock on this debacle.
obviously there are still fools out there who believe all marketing crap on leasebacks - if anyone buys now then the saying - "a fool and his money are easy parted" comes to mind - for God's sake listen to reason
I didn't signed anything yet and still try to understand all pitfalls to anticipatively protect myself against them.
Indeed you're right saying the french law on "bail commercial" supercedes such "no eviction indemnity" addendum; I've got confirmation from french blog on lease-back (LMNP so-called). However I've found nothing that would prevent the 2 parties to agree on the amount of such an indemnity at time of signature, so a strategy could be to add a clause to the signed "bail commercial" and set the indemnity to a single (symbolic) euro... Would that mâle sense ?
As an addendum to previous post, you prob are in a dilema. ie if you dont sign new lease, operator will look for compensation now if you do not renew in same manner if you did not renew for 3rd term in 9 years. However it may well be worth exploring signing an alternative to a commercial-lease with operator as it could avoid compensation as it allows operator to continue renting your apartment. Get advice but think contracts should never exceed 2 years and ensure either party ie you or operator can cancel contract. Huge advantage is that at some stage you can decide to sell without a commercial-lease dragging down value as new buyer does not have to take over any commercial-lease on apartment.
Sorry, I misread thread and thought you were being asked to sign commercial-lease renewal after initial 9/11 year lease
If you are thinking of buying a new apartment and signing a comercial lease to cover 20 years to reclaim purchase TVA you need to ask yourself some serious questions.
1. When you wish to exit at end of 20 years will the 2-3 years turnover on your apartment which you will pay as compensation to operator wipe out or nullify most of the TVA claim amount? (turnover prob = rent x 2 x 3 years so large amount)
That compensation kicks in when you exit lease and refuse to renew lease after year 20. Lease clause related to compensation no use if that lease has expired.
2. If you ever wanted to sell before year 20 would you be able to find a buyer willing to purchase and take over your commercial-lease if that buyer even did minimal research on leaseback schemes? Buyer would likely look for a large discount to take on risk of taking over lease and lease would drag down price to a fraction of freehold market value.
3. If operator has problem generating rent and cannot pay you full amount, do you realise you are still locked into lease and can only exit after a few years if you and other owners force operator into administration? % of sales often used to offset problems for first few years but often problems with rent thereafter.
These forums are full of owners receiving small or zero rent and still locked into leases so cannot exit lease and cannot even sell at 70-80% discounts.
If you compare above to buying freehold and paying the purchase TVA, the big benefit is you can sell freehold at any time at market value of apartment. You could find smaller operator still able to generate rental on your apartment.
Q. Are there any owners from the thousands who bought in a leaseback scheme who would recommend scheme to others? No! Would those thousands of owners exit commercial lease if they could tomorrow even if they had to pay back purchase TVA? I reckon 90% would jump at the oppertunity.
In a nutshell - all the evidence points to waking away - if you buy a leaseback do not complain that you were not warned -DO NOT EVEN CONSIDER IT - BETTER STILL TELL ALL YOUR FRIENDS AS WELL!!!
If, like me, you have been seduced by glossy Terresens emails promising you your own piece of Alpine paradise, all wrapped around an “out-of-the-box, you can’t lose” rental management programme, then please read this review before you even consider engaging with them. My story started in December 2020, when I was contacted by Terresens about a new development in Peisey Vallandry called Le Quartz, which I liked. I signed a legal reservation agreement with Terresens in January 2021, paid the deposit and locked down the property (or so I thought). After spending thousands of Euros on variuos legal and other fees to finalise the purchase, Terresens contacted me days before the completion to inform me that they were increasing the price of my property from 685,000 Euros to 927,000 Euros. Clearly, I refused given that we had a legal reservation agreement in place, which specified the purchase price. Terresens then simply informed me they were unilaterally terminating our reservation agreement and putting my property back on the market. I found it unbelievable that a developer that describes itself as 'the leader in the concept of secondary homes in the mountains' would act in this way. But they did and, as a direct result of their actions, I am now thousands of Euros out of pocket and I've also missed out on other opportunities I was considering at the time. They certainly turned my Alpine dream into a nightmare.
In response to Mr TABORIN’s comments : We have received your comment, and would like to respond to the various points you raised:
1- Regarding the mortgage, it is correct that it has become more complicated to get Financed in France. However this is certainly not due to Terresens products, but due to the reactivity of French banks to the current economic situation. Indeed, we manage to make more than 300 sales per year, and often none of our customers have any problem obtaining a mortgage.
2- Regarding the unilateral termination of the reservation contract, the procedure may seem harsh, however, it has been done so applying current legislation. We regret this termination and we are sincerely sorry for it. We are disappointed that we were unable to reach an agreement, as this is not our usual practice.
3- The current economic situation (Russo-Ukrainian conflict, Covid, increase in construction costs...) has forced us to increase the selling prices of the apartments not yet finalised by deed.
We understand your disappointment at not being to become one of the many happy owners of a residence of our Group, leader in the concept of high standing secondary homes in the mountains with concierge services. As for the threat of legal proceedings, we will pass your file on to our legal department. In order to respect the legal procedure, we will not respond to any further communication from you beyond this. Furthermore, we reserve the right to sue you for your comments, and will publish the judgment.
English
Français
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
Is it too late to get out? Leasback is the worst investment you could ever make barring perhaps a wooden shack on a tropical island that gets hit by hurricanes on a regular basis.
Well said walk away if you can
Hi Tony,
i'm looking for feedback too... Did you collect some ?
Also did you signed for it ? I'm close to (after reading all the warnings !) and plan to better protect myself through contractual clauses like "No eviction indemnity after 9 years " and more. Would love sharing experience and advices !
Once a leaseback is signed there is no come back the indemity is written in French law and alwaays has to be paid.
When we bought our house, it was written that we could walk away at the end of the nine year with no penatly.
That wasn't true the law is in favour of the management companies. We had French Notaire and also English solicitors to act for us but no one told us about the Bail Commercial.
Think very carefully before you sign anything and know that if you want out the indemity will have to be paid.
Please listen to all the warnings on this forum - walk away or you will retgret it for the rest of your life
As Wineflair and others have said, there is no 'protecting yourself' by adding clauses to the lease contract. The right to eviction indemnity is in French law.
If the feedback on the forum here doesn't make you back out, take a look at the comments on https://www.change.org/p/eu-french-government-justice-for-hood-winked-ow... - and the 2,280 signatories.
Why would you invest in this ????
You have no protection...
+1 SineadM
I simply can't understand why anyone would even consider an investment such as this at this juncture with all the information that is out there.
There are plenty of places to invest money (if you have it). French Leaseback property is not one. Do yourself a favour and walk away when you have the chance. There are many many thousands of French & non-French citizens who would love to turn back the clock on this debacle.
obviously there are still fools out there who believe all marketing crap on leasebacks - if anyone buys now then the saying - "a fool and his money are easy parted" comes to mind - for God's sake listen to reason
Thank you all for your double & triple warnings !
I didn't signed anything yet and still try to understand all pitfalls to anticipatively protect myself against them.
Indeed you're right saying the french law on "bail commercial" supercedes such "no eviction indemnity" addendum; I've got confirmation from french blog on lease-back (LMNP so-called). However I've found nothing that would prevent the 2 parties to agree on the amount of such an indemnity at time of signature, so a strategy could be to add a clause to the signed "bail commercial" and set the indemnity to a single (symbolic) euro... Would that mâle sense ?
Ok, you want a contract to earn rental income on your appartment but you dont want to pay compensation at end of 9 year term.
You also want to keep you lmnp-leaseback tax status to avoid paying back purchase tva.
Does that contract need to be a commercial-lease (bail commercial)?
No or certainly not after initial 9/11 year term.
So why doesnt you operator not sign 9 x 1 year rental contacts containing 3 of the 4 required 'hotel services'?
Im not a legal expert but reason operators may want you to sign a commercial
lease is that all the clauses and agreements in that lease end at end of 9 year
term. When you refuse to renew for 3rd term in 9 years time your 1 euro compensation deal will expire with
old lease and compensation will kick in as you are closing down the operators business.
As an addendum to previous post, you prob are in a dilema. ie if you dont sign new lease, operator will look for compensation now if you do not renew in same manner if you did not renew for 3rd term in 9 years. However it may well be worth exploring signing an alternative to a commercial-lease with operator as it could avoid compensation as it allows operator to continue renting your apartment. Get advice but think contracts should never exceed 2 years and ensure either party ie you or operator can cancel contract. Huge advantage is that at some stage you can decide to sell without a commercial-lease dragging down value as new buyer does not have to take over any commercial-lease on apartment.
Sorry, I misread thread and thought you were being asked to sign commercial-lease renewal after initial 9/11 year lease
If you are thinking of buying a new apartment and signing a comercial lease to cover 20 years to reclaim purchase TVA you need to ask yourself some serious questions.
1. When you wish to exit at end of 20 years will the 2-3 years turnover on your apartment which you will pay as compensation to operator wipe out or nullify most of the TVA claim amount? (turnover prob = rent x 2 x 3 years so large amount)
That compensation kicks in when you exit lease and refuse to renew lease after year 20. Lease clause related to compensation no use if that lease has expired.
2. If you ever wanted to sell before year 20 would you be able to find a buyer willing to purchase and take over your commercial-lease if that buyer even did minimal research on leaseback schemes? Buyer would likely look for a large discount to take on risk of taking over lease and lease would drag down price to a fraction of freehold market value.
3. If operator has problem generating rent and cannot pay you full amount, do you realise you are still locked into lease and can only exit after a few years if you and other owners force operator into administration? % of sales often used to offset problems for first few years but often problems with rent thereafter.
These forums are full of owners receiving small or zero rent and still locked into leases so cannot exit lease and cannot even sell at 70-80% discounts.
If you compare above to buying freehold and paying the purchase TVA, the big benefit is you can sell freehold at any time at market value of apartment. You could find smaller operator still able to generate rental on your apartment.
Q. Are there any owners from the thousands who bought in a leaseback scheme who would recommend scheme to others? No! Would those thousands of owners exit commercial lease if they could tomorrow even if they had to pay back purchase TVA? I reckon 90% would jump at the oppertunity.
In a nutshell - all the evidence points to waking away - if you buy a leaseback do not complain that you were not warned -DO NOT EVEN CONSIDER IT - BETTER STILL TELL ALL YOUR FRIENDS AS WELL!!!
M
If, like me, you have been seduced by glossy Terresens emails promising you your own piece of Alpine paradise, all wrapped around an “out-of-the-box, you can’t lose” rental management programme, then please read this review before you even consider engaging with them. My story started in December 2020, when I was contacted by Terresens about a new development in Peisey Vallandry called Le Quartz, which I liked. I signed a legal reservation agreement with Terresens in January 2021, paid the deposit and locked down the property (or so I thought). After spending thousands of Euros on variuos legal and other fees to finalise the purchase, Terresens contacted me days before the completion to inform me that they were increasing the price of my property from 685,000 Euros to 927,000 Euros. Clearly, I refused given that we had a legal reservation agreement in place, which specified the purchase price. Terresens then simply informed me they were unilaterally terminating our reservation agreement and putting my property back on the market. I found it unbelievable that a developer that describes itself as 'the leader in the concept of secondary homes in the mountains' would act in this way. But they did and, as a direct result of their actions, I am now thousands of Euros out of pocket and I've also missed out on other opportunities I was considering at the time. They certainly turned my Alpine dream into a nightmare.
In response to Mr TABORIN’s comments :
We have received your comment, and would like to respond to the various points you raised:
1- Regarding the mortgage, it is correct that it has become more complicated to get Financed in France. However this is certainly not due to Terresens products, but due to the reactivity of French banks to the current economic situation. Indeed, we manage to make more than 300 sales per year, and often none of our customers have any problem obtaining a mortgage.
2- Regarding the unilateral termination of the reservation contract, the procedure may seem harsh, however, it has been done so applying current legislation. We regret this termination and we are sincerely sorry for it. We are disappointed that we were unable to reach an agreement, as this is not our usual practice.
3- The current economic situation (Russo-Ukrainian conflict, Covid, increase in construction costs...) has forced us to increase the selling prices of the apartments not yet finalised by deed.
We understand your disappointment at not being to become one of the many happy owners of a residence of our Group, leader in the concept of high standing secondary homes in the mountains with concierge services.
As for the threat of legal proceedings, we will pass your file on to our legal department. In order to respect the legal procedure, we will not respond to any further communication from you beyond this.
Furthermore, we reserve the right to sue you for your comments, and will publish the judgment.