for those whose leaseback term is ending

I am not sure how correct this advice is...had you sent CDPs to them for non-payment of rent? The only way to cancel the lease leggally (as far as I know) is to send CDPs and if they don't pay get a judge/liquidator/receiver to cancel the lease (this is what we did). If you accept a lesser contract from them then you agreed to it and you will have to pay them compensation...sending a registered letter 6 months in advance is of no benefit.

Hi Patricia,

I am not a French solicitor but I still maintain this is wrong advice. Do you have a contract that gives you a % of what they earn? If so, 6 months makes no difference once they have a contract signed by you. PM me if you need to discuss.

Is scenario mentioned by JuanAzur different? ie if you are still in a lease and lease not close to end-date then CDP may be only option to force exit. However original post mentioned scenario where lease was ending and need to send 6 months notice to operator before end date to stop automatic-renewal of lease and stop need to pay operator eviction-indemnity. Don't know much about this but have seen a few posts where a registered letter to opertor 6 to 12 months before lease ends stating that you do not want lease automatically renewed may stop renewal and need to pay eviction-indemnity. 

No, this is wrong, if it was this easy everyone would do it. If you are in a lease and your tenant is up to date with rent, no CDPs etc then they are automatically entitled to lease renewalm giving notice via a registered letter still requires you to pay compensation if you cancel the lease. If you do not send a registered letter then the lease automatically renews.

You may be right. PM not working for last while so just making point again as think they are different scenarios.

1. The original message had title "for those whose leaseback term is ending" so refers to owners who are at end of the 9 or 12 year term. The letter giving notice is just a way to stop a new lease being autorenewed for a new tern and need to issue an eviction-order and compensate operator. However others who have gone through this process would have much better info than I.

2. Owners who are a few years away from end of 9 or 12 year term can issue a CDP if rent owed as a way to force operator to pay or put operator into administration thereby cancelling leases. There are alternatives such as taking operator to court for "breach of contract". Know one owner who won such a case but just got rent paid. Unsure if you could use that later to issue an evication-order. Think at the end of the CDP process an eviction-order can be issued but again others who have gone though this may have more info.

Macdara,

The tenant has an automatic right to renew under French law. If you want to cancel your lease you must give notice and send the letter via a bailiff. If you do this the tenant can legally look for compensation (and most likely will). The registered letter via a bailiff will not prevent you from having to pay compensation. However if you send a letter via a bailiff saying you are cancelling the lease at the end of the 9 year term (citing a number of CDPs ) then a judge may look favourably on this if the tenant tries to take you to court for compensation. In this case you could righly challenge their request for compensation and threaten to take them to court if they push it as you have a stronger case in terms of consistent breaches of contract.

Our case was slighly different. We send CDPs and they were paid, but then the tenant got into financial difficulties and we sent another CDP. They offered a new contract for 50% reduction in rent, we all grouped together and said a resolute "NO". When we did this a received was appointed and he cancelled the leases as the company was liquidated. We were on the lookout for a new management company or self management when an investor offered to buy the entire building at market rates (91% of the price we paid 8 years earlier) so we all got out and licked our wounds. My vontact details are here and anyone can feel free to contact me. I am out of this nightmare but I want to help others who are suffering as I did...I know the pain this causes and am thankful that I am out. The moral of the story ...NEVER accept a rent reduction, if you do then you are playing into the hand of the scammers.

1. Has any owner on the forum issued an eviction-order just to get out of lease and taken hit re compensation to tenant (operator)? Is 3 years turnover usual compenastion paid?

2. Has any owner willingly offered an opertor compensation as a buy-out to cancel lease to increase sale value?

Wineflair has done this, contact him.

I am afraid to inform you all that Joan Azur is correct in everything that has been posted - even if you issue CDP or a Conge to terminate the lease Eurogroup will chase you for eviction compensation - if anyone else is offering advice to the contary they are talking rubbish. Sometimes I believe owners are accepting advice  that they want to hear! Eurogroup will issue you  a writ at some point (within 2 years after the conge has been served) - do not be fooled by their lack of communication the writ / summoms will arrive - I bit the bullet and got out - best thing I ever did - got my house back - and this debacle is no longer controlling my life - my advice if you are in the financial position to get out then gegotiate with them and move on. If you are in the ubfortunate position not to have the required finance then I am afraid these gangsters have a lease in perpetuity.

We have been informed by our Management Company that the lease is to terminate in Oct 31st. As yet we have not received the lease details but have been informed by our Syndicate that they are looking for a 30 to 50% reduction. We do not wish to renew our lease and have been advised that we don't have to as they are renewing our lease on different terms. Is this correct??? So far we have done nothing but are adament that we do not wish to go into another lease term and wish to use it just as a holiday home. Where do we go from here???

Our term is ending on 31/10/17 too. Grand Bleu have said they don't want to renew the lease and want us to meet them in October to hand over the keys. We would like to sell asap. Anyone recommend good estate agents? Hopefully they can act as our proxy too, to get the keys.

If the management company is threatening toterminate the lease unless you accept a rent reduction andyou want out anyway then do not accept the new lease - when you recieve the new lease proposal reply to them via  a solicitor sayin yu are accepting their forced termination - if this works out for you count yourself as one of the lucky ones. After you inform them that you are not accepting the new terms of the lesse they may howevr just carry on under the original terms - if this is the case then they will automatically renew and the lease will go on in perpetuity and you will have compensation to pay to get out. Gert a solicitor involved ASAP

We have received our new lease looking for a reduction of 45 % which we had no intention of accepting. We sent them a registered letter confirming we were not accepting their new lease as it stands and will collect our keys on the 31st Oct end of lease date.
We received an email from them saying we can contact the manager of our complex to collect our keys on that date.
So happy days we will be doing that. Not sure yet as to how we work the utility bills yet or syndicate that looks after the complex but looking forward to being back in control of our own property.

As a co-owner you will pay fees as you have always done to the syndicate for management of common parts. But you will need to have a separate electricity meter installed. If you continue to rent it out (offering 3 of the leaseback services to avoid paying back the TVA) then you will still have the same legal (LMNP) activity.

Hi Everyone,

Our lease with Mas des Oliviers is set for renewal in 2018, and I'm looking into all of my options.  Can anyone recommend a lawyer experienced with leasebacks who can draft the letter to halt automatic renewal?

Also, given that Eurogroup has not even paid our renegotiated rent, has anyone on this forum been successful in negotiating the operator eviction indemnity amount?

Thank you,

Stephanie (from San Francisco)

Why on earth would you discuss an eviction amount when they haven't paid your rent as agreed in your lease? Send them a commandement de payer and if they don't pay in full have the lease cancelled by a judge for non-payment.

Thanks -- as you can tell, I'm new to this process and trying to piece the info together (so please be gentle!). It still seems like I'd need a lawyer to draft a commandement de payer, right? Or is there a standard template (since so many of us are in the same predicament). To be clear, my main question is a recommendation for a lawyer who can help us work though these issues and provide guidance. Thanks! 

Yes I will send you a pm with a lawyer's name

You do not need a lawyer to draft a CDP. If you use a lawyer they will charge you a large amount. The only legal requirement is that you must use a bailiff who serves your postcode. You can use the process which is provided on this website for a tiny fraction of the cost of a french lawyer!

Thanks Seamus and JuanAzur.  I'll do my homework and review what's posted here.

Best,

~S

Seamus thanks for the advice on what to do now that we are free of our leaseback. What does LMNP activity mean???

LMNP is "loueur en meublé non professionnel" - a tax status which you likely have - it is the leaseback tax status. A small number of owners will be BIC hotelier and those with several properties may be LMP. They are all leaseback. It will be indicated on your 2031.

What will be the situation if we decide not to rent it out at all and just use it as a holiday home. I do know we will probably have to pay the tax back.

Yes you will have to pay back the pro-rate VAT amount back.

Compensation. Everyone talks about the eviction fee that the management companies ask for is the average of three years Annual turnover. However no one tells you it is times by a coeffient number this can be anything between 1 -5 times so it makes it a very large amount. The managment company we are with have changed it to 4 it was 2.75. Also it is on the turnover that both the managment company take and what they give us back.  It is interesting that it is not on what they would lose for renting the house, they also take an average of our rental that we get. Any thoughts or info on this please would be good. Also why do they times the amount?

Have they always paid rent on time? Did you take a rent decrease?

Response to Joannes q re using as a holiday home:
You can still sign a contract with someone to provide 3 of the hotel services but still use mainly as a holiday home in years up to year 20 and avoid tva payback. You could pay fee to that person to mind apartment and provide security in eventuality that apartment was rarely rented.

We have just exited our leaseback in July and had to pay compensation relating to 1 quarters rent paid to us. However make sure you serve the notices correctly 1 year before exiting or whatever is in your lease agreement.

I think we have been lucky with our leaseback company after having read many posts on this subject - maybe as only a handful of us came out at the first break point 12 years out of 20 in our case.

Hi, 

Based on experience, if you negotiate with Eurogroup they will often for you to get out of the lease for nothing. Of course you will still have to repay a portion of the VAT back. 

Regards, 

Eddy

You will pay no VAT back if you get an agent to provide keys linen and cleaning for guests.

We managed to get out of our contract without paying compensation though I think that's largely down to Eurogroups incompetence and having a good Solicitor. 

We've been told that we have to pay back the VAT even though we will probably still let the property on an infrequent basis so I was interested in the comment about appointing an agent as I've not come across anyone willing to do this without entering a contract similar to the one we've just escaped from.

It is very straightforward to avoid paying back the TVA. You only have to offer at least 3 of the leaseback services (e.g. key holding, laundry, cleaning) and you must use a company whose main business is property management and which has a SIRET number. Then the easiest thing to do is just advertise your property on the main portals and let the local company do the rest. There is no lease to sign. Your tax return remains in exactly the same format except you must now charge TVA with the rent.