English
FrançaisJust wanted to say hello. I own a leaseback purchased off plan from MGM in 2005 and managed by their management company CGH under an 11 year lease. I opted for rental up front as a discount on purchase price to avoid cash flow risks. So far I would say it has gone well, with the property well managed and after 5 years of use the apartment still looks like new. The management fees are quite steep but no more than I expected. I do have one big issue though - when I purchased the apartment I reserved a parking space in a separate parking building that was yet to be built. 5 years later the parking building is there but I still have no word on when I can buy my parking space. I write to MGM every 6 months and normally get a nicely written response assuring me it will be imminent, but nothing ever happens.
I'm also now quite worried about the end of the lease. I already new about the commercial lease compensation risk and asked for an exemption clause to be inserted at the outset but MGM/CGH refused to do this. They did however give me lots of assurances about how it would not be in their interests to charge owners who opted not to renew the lease since they have a certain reputation to uphold. I was never that happy with this but decided to take the risk. I definitely have a clause stating that the apartment will be returned to me in "as new" condition and no mention of me having to pay refurbishment. I will never agree to pay for refurbishment costs, although to be fair our place is being maintained to a super high standard by CGH.
Finally, I'm confused by some mention of MGM being part of P&V on this forum. I've never been aware of this and always deal with CGH and MGM.
That's exactly what we need. Up to now we have only heard things
through the grapevine and on many occasions the information is
contradictory. I received an e mail from my management company
yesterday but it was just vague reassurances that they would comply
with the rules. The thing that worries me is that they insist on not
discussing it until a few months before the leases expire.
I would be very interested to find out any information about CGH's actions towards/at the end of the lease. I own a leaseback apartment built by MGM, managed by CGH (their subsidiary). Recently the owners have been sent a request by CGH to fund the cost of new flat screen televisions for each of the apartments. The residences association has said "no" but we were quite astonished to have been asked in the first place as this is not our responsibility under the lease. CGH have also cut off the heating during the "white" periods so although one can use the apartment it is freezing cold and I am wondering what will happen with the heating once the lease ends if I do not renew.
That's interesting, TV were changed in my place last year. I wasn't
asked for money but there was a whole fuss about giving them
permission to do it. Maybe the people who receive rent got billed.
We were also just asked (Les Fermes de Sainte Foy) to pay for TVs and on the advice of my friend who is an owners representative I have just drafted my response, which is of course a "no". She just emailed me about the end of lease concerns, this is a copy paste of her email;
Owners in Vallandry will not renew their lease until 7 to 9 years but share the same concern than yours as we heard exactly the same rumours re PV renewal inacceptable conditions. We plan to discuss the topic during our next AGO in April and vote an accrual in order to seek legal advise submitting the texts of our various leases (Belgian owners for instance have different renewal terms) to the review of a Lawyer. I would think that if we all put pressure on CGH, they might lower their expectations, otherwise their risk is that they would need to convert their service residence in a communal swimming pool ;). I also think the lease is a scam and they are just a pain in the ..
PipPip40526.5908912037Regarding out of season use that was clearly a selling point originally,
however they always obstructed this, initially by trying to charge 20 or
30 euros a day. More recently they have flatly refused to permit such
use by saying we have no right to this. Even if they are forced into it
clearly they will do what they can to make it unpleasant by freezing
you out, literally.
There is a meeting of les carroz owners on 20 December. Someone is
attending on my behalf so I will let you know what happens. I expect
some vague third hand explanation from the management association
about what will happen but at least it is now being raised as an issue.
Never tried to use ours out of season and probably never will, so not an
immediate concern but I do remember that being a big part of the sales
pitch. Maybe it varies by residence? I'm going to try to find out who is
representing St Foy owners as I'm a bit in the dark about what lobbying of
CGH, if any, takes place for our residence.
I am also an owner of an apartment at Les Fermes de Sainte Foy and was recently very surprised and annoyed to receive the letter requesting 800 Euros to replace the TV for a TNT capable one. Not only did I think that we are liable to pay for the replacement under the terms of the agreement but I also thought it ridiculous that the notice was 2 weeks and the cost much too high. It smacks of profiteering and has made me uneasy about what else CGH may request funding for. Reading your interesting comments too about potential end of lease pay outs etc has reinforced my concerns. I will join you PipPip in attempting to determine what options might be open in terms of lobbying CGH for our residence. FYI .. I have so far rejected the request for the TV funds. As far as I can see, TNT cut over for the Alpes region is not until the 3rd quarter 2011. I believe it's also possible to install a decoder box (rather than replace the TV) which is probably about 30 Euros from Super U.
RobG40542.4437268519Regarding the end of lease issues you should be aware that if you do
not renew you must give one years notice. Pierre et Vacances are
currently trying to dodge this by refusing to discuss the renewal until
after this deadline. Just be aware of your lease expiry date and don't
let them palm you off with excuses until the last minute.
Apparently MGM sold off their leases at some point a few years ago. In my case they sold it to Pierre et Vacances but I suppose they could have sold some to other companies as well.
The big issue here is that it seems that whether or not you renew your lease there will be a substantial charge to pay. If you renew you will be forced to pay for repairs despite all the assurance about it being returned 'as new' (I was told exactly the same), I saw someone was quoted 27,000 for a 2 bedroom apartment. If you refuse to renew you will be liable to pay compensation equivalent to 2 years rent. I seriously doubt the lease company will waive this just to maintain their good name.
I think that pre 2005 they may have sold them but my property was
purchased off MGM and from the outset was to be managed by their
own management company CGH, who continue to manage the
property as they have since purchase. Seems to be all in house with
no change or sale.
I've been reading up a bit today and gather that the compensation for
the management company is payable if approved by a court. The
amount the management company asks for depends on the
percentage of owners who choose not to renew. It could be nil if
enough owners renew and non-renewals are in the minority. For a
company like MGM that has an in house management company like
CGH and is still actively selling properties, the reputation argument
does hold some water, but only time will tell.
A good friend of a colleague of mine (i work and live in Paris) is the
French owners representative for one these MGM/CGH properties and
I've asked her today for her thoughts. She fights a lot of battles with CGH and MGM for owners so I'm sure she will have a view. Will post
if I get any useful info.
Dave