Do I really need a Management Company?

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Do I really need a Management Company?

For the sake of argument, let's say I have no joy getting my rent from the current management company and the lease is broken. Other than selling, the options are to run the property myself or find another management company. Do I need a management company and a lease to retain the property's leaseback status? Or, do I just need to demonstrate that the property is being rented to keep my VAT refund?

OK, a commercial lease is needed. Has anyone looked into setting up a French management company for their own property, or a group of properties?


Let's say for example several owners were not getting paid and evicted their current management company. Shock, horror! They then have 1 year (I believe) to find an alternate company before they have to start repaying the VAT. You see where I'm going with this...


I've setup companies in England and the USA. It's a very simple process. Why not in France? Then sign a commercial lease between my company and myself. Are there laws around conflict of interest?


It seems to me what everyone on this forum needs is a management company run BY owners, FOR owners.

Ok your idea is logical execpt that if you want to be subject to VAT and I suppose you wish, you CANNOT BE INVOLVED DIRECTLY OR UNDIRECTLY in the business and result. If you set up your own management company you wil not be subject to VAT anymore and you will have to repay part of the VAT refund you got originally.

That is the reason why you need a management company between where you are not interested to the profit or loss of the development.

It is pure tax issue.

Just looking into possibilities for post leaseback scenario.

This is a very old thread, but relevant to the situation i find myself in.

From Bertrands post it sounds like he thinks i would not be able to set up a limited company operating as a leaseback company to run my apartment?

i don’t really understand why this would not be possible as i the owner would lease my apartment back to a limited company and for tax reasons we would both be seperate entities.

Furthermore, i assume that the limited company could be registered at the apartment itself. As the leaseback company would be leasing the apartment. Or does the chicken and the egg scenario come up here. I.e. That you would be using your apartment to register the company before it would be possible to have a lease contract. 

Bottom line:

Is it possible to set up your own limited company to manage your own apartment via a leaseback contract and have the registered adress of that company at the apartment itself?

No

OK I understand, are there businesses that offer to be a basic manager on your behalf? this is effectively the case in other types of property rental, your agent will undertake to find tenants, and undertake some bsimple management tasks. I would have thought some enterprising local agents in ski resorts would see this as a gap in the market?

This is a very interesting discussion. I would also like to know more about other possibilities ...

 

Dear All,

In principle, furnished rentals are exempt from VAT.

However, VAT applies (except for non-profit associations) in the following cases:

1.   The classified tourist hotels;

2. classified or approved holiday villages;

3. classified tourist residences when the lease with the operator lasts at least 9 years and the operator has made a commitment to promote tourism abroad. The owner can also fall into this category if he has made a commitment to promote tourism abroad;

4.  The provision of a furnished room provided that the operator (or an agent) offers, under conditions similar to those offered by professional hotel establishments, at least three of the following services:

- breakfast,

- regular cleaning of the premises,

- the supply of household linen and the reception, even non-personalized, of customers.

5. bare or furnished leases granted to an operator of an establishment that falls within one of the four categories listed above.

Consequently, if an individual who rents furnished accommodation without offering the above-mentioned similar services, then he is not subject to VAT unless the rental is in a classified tourist residence.

Kind regards,

David Sabatier

Important : We revert to you in the framework of our partnership between our firm and the the owner of the website frencheleaseback.net. However, this answer does not constitute a lawyer / client relationship and the firm or the author cannot be held liable for the recommendations made.