English
FrançaisHi,
I am very interested in the leaseback scheme and generally everything I've
read about it seems positive. I understand that many people buy into this
purely as an investment, with plans to re-sell at some stage after lease is up.
I'm just unsure about how it works if you want to buy, lease for one term or
more, with a view to eventually residing in your property full-time. Is this
possible with most leaseback residences or are they purely for holiday use?
Does the property ever truly belong to the purchaser, or are there
restrictions? Could someone actually plan to live out their golden years in
one of these properties even if it's in a holiday village? Would appreciate any
advice on this.
I am not claiming to be an expert to answer this question....far from it in fact!!!!. I am simply a joint leaseback property owner.....
As i'm sure you are aware the min. leaseback is for 9 years. Providing you give adequate notice you can then pull out of the leaseback. The property is then 100% yours and any mortgage repayments etc etc.... are yours too. I believe after 9 years if you do not notify your intention to withdraw your property from the lease it automatically extends for 3 years.....so on and so on each 3rd year after.
My friend and myself are basically sitting on our leaseback near Beziers for at least 9 years possibly 15!!!
My biggest advice is if you are taking out a mortgage ensure the income outweighs the repayments to cover other costs such as Land Tax, Copropriate charges etc etc..
If my comments are incorrect please feel free to put me right because it will help me out now and in the future.
sbds
I have not heard of this 3 year renewal period.I understood that you can cancel after the first period(minimum 9 years)but would have to give 6 months to one year notice.They are then entitled to claim compensation(why would they not),and the legal advice i was given at time of purchase was that they could "claim up to one years loss of rent".
I have heard it said,"that they don't tend to progress the claim".I am not relying on this,these are commercial businneses not charities.
Where did you get your 3 year period from?Was it in your lease?
Regards
John
eses not charities.
Some leasebacks are destined to be hotel letting units in perpetuity in which case selling them outside a lease is impossible. Look at MGM, Pierre et Vacances etc
Some leasebacks are sold in zones where regulations stop those properties from becoming principal homes and total annual occupation might be limited to 3 months, 6 mo,ths,11 months depending on the exact regulations.
On all leasebacks the tenant, management company, has the right to claim full commercial compensation for non renewal of the lease, first time, second time, ad infinitum.
On a light leaseback, as is the case with most owners at Columbiers, near Beziers, the lease has no real value so the management firm is unlikely to go for commercial compensation, or if they do they will not be awarded much.
By French law there is no monetary or other limit to the compensation that can be claimed or 'won'. The 6 months/1 year stuff is guesswork.
It is a fact, although we do not attempt to sell properties on the back of it, that some of the management firms will quietly release owners from their lease obligations up to a certain % after which, they have told me, they will be forced to seek commercial compensation. So a quiet approach to the management firm, together with all the official 'notices' etc filled out and sent in the legal delays might work wonders.
There are only two cases that I know of where owners are likely to be free of claims for compensaétion.
1. As in the Jasses de Camargue, where the developers/commercialisateurs guaranteed to pay any compensation claimed by the management firm. As long as the 'commercialisation' firm is still in existance owners are free of worries.
2. Where the management firm sign a document seperate from the 'bail' in which they state that they will not seek any compensation in the case of a non renewal of lease. We ,the French Property Company Ltd., have this as legal advice from one of our French barristers, but.... caution as with all legal advice he hedges. Our translation is as follows. Whilst nothing can negate the hidden and inherent right of a leaseholder to claim commercial compensation for non renewal of that commercial lease by the landlord, a legally signed attestation stating the lleaseholder's intention not to seek any compensation in the case of a non renewal, would show a certain volonté on the part of the tenant that would make it very unlikely that they would or could win any action seeking commercial compensation in a French court.
Best regards,
Rob Thorne
robt.
What do you mean by "light leaseback" and the lease has no value ?.
john
Light leasebacks are those were a minimum amount of weeks is given to the management firm to obtain the TVA clawback, hrnce annual rents are low and hence the lease has a value that is small and would not justify the management firm seeking vast amounts of compensation.