Bertrand with RH entering into a safeguard procedure does this mean they have to honour all late payments to the "problematic" residences upto 24th March? I thought there were only 10 probelm residences not 12, which are the other 2?
Just on a synical note (or is it) 8 of the problem 10 are Ski resorts(they only have 19 in total), RH wait until the end of the skiing season to decaire themselves into a safeguard procedure, kill off those leases now, summer season looming what's to stop them pulling the same trick at the end of the summer season for 50% of the coastal residences (i.e. no rent due in July) then at the begining of October invent another 10 problematic resorts at the coast and refuse to pay them rent. These people need to be stopped ASAP and face up to their financial commitments before they disappear with all the takings and leaving alot of financial ruin behind them.
Betrand, thank you for your update however, it is somewhat concerning that there have always been 8 or 9 "problem" properties mentioned and here you mention 12. Are these 12 disclosed anywhere or do we all have to sit and wait for a letter? You seem better informed than everyone else. Best wishes
I agree Cath and from what I can gather we only have 30 days from 11 Jan in which to do so.
Does anybody know of the implications of us signing this document - I am concerned that some vital implications have got lost in my translation!! Has anybody else out there signed and returned this document?
Residhotel's suggested CVA provides for repayment of all admitted claims over a 10 years period. This, if approved by the Court, means that
claims will be eroded by inflation over 10 years (16% if we apply
inflation rates figures over the past 10 years...).
The Cannes Court will decide whether or not the CVA suggested by Rhode Tourisme (Resid'Hotel) is acceptable. Creditors' opinions are taken into consideration, but the final decision essentially lies with the Court.
Accepting or rejecting the CVA, by returning the acknowledgment slip to Mr Cardon, does not have direct legal consequences for individual creditors. It can impact on the overall situation however, as the more people accept the 10-years repayment CVA, the more likely it is the Court will validate it. So, signing the document does not directly affect individual claims, but may influence to golbal outcome.
At the end of the day, it is down to each property owner to consider whether or not Residhotel's attempt to be offered a 10 years interest-free loan on (unpaid) rents deserves, or not, a little push...
I am in a new Resid property in Carcassonne. The property was only completed in December 2008 and only rented for first time from January 2009. As we were only due to receive our first rent in April for the first quarter will we now too not receive the rent. How do we negotiate with the receiver for the balance of the three months.
Do we know the names of the properties that are in trouble.
I have received a bill from Societe Art for my apartment in Carcassonne - I am slightly confused by this as I was informed that maintenance would come under the management company (by my solicitor who read through the contracts). Has anyone else received a bill? I was also surprised at how much it is given that it's a new development. Is there any cap on the amount?
I too have received a bill. I have emailed them to try and establish the breakdown of it as it is well over €500 which seems excessive. Part of it also relates to the first quarter for which I have as yet received no rent and I am disputing having to pay this. To date I have received no response but that is no surprise. I would welcome any advice on this.
we own a leaseback in Saboia and are just getting our eyes opened about whats going on!. Is anyone else in Saboia and does anyone know if its one of the affected properties- wee didnt hear of any request for rent reduction but we also havent got any rent since last october!
Societe ART are a sister company of Residhotel, they ran our residence for a year, our association found them to be expensive and dare I say it corrupt as the monies owners were paying were not being spent on maintenance and under insuring the residence, hence, when there was a problem the insurance company were very relucant to pay out. When we got rid of them the question was asked where was the rest of the monies paid to them, the response it was spent on meetings and there were no accounts available. Like so many people administering leaseback developments they are all in it to make a quick buck at our expense.
I would think that it is in our best interest to accept this offer. Does anyone go on to the french sites to see what their view of it is. Also is there a liklihood that those who reject it will get their money up front and the rest of us will feel very stupid then if we accept.
we managed to get rid of them at the annual AGM, the association managed to find an alternative management company who quoted for the running of the place and were voted into position much to the annoyance of ART. Be warned though ART do try to get you to give them your proxy vote if you are not attending prior to the AGM to block any motions that may interfear with their nice little earner.
Re-sister companies you don't have to dig to deep to find the developer, builder, promoter, management company and leasee all pee into the same pot and are in someway connected. The scheme seems to be a con from start to finish.
Hi, I have received the same letter from Residhotel last week as per the post on the http://residhotel.over-blog.com/ - I take it this letter is for leaseback owners whose apartments are not on the Black list. Have the owners of apartments on the black list recieved a different letter or the same?
I got a letter from Rhode Tourism dated 30th Mar. I have no idea what it is about, can anyone enlighten me, my french is very poor. I have tried using the google translation site, but it is very unclear.
I just noticed that it is no longer possible to book Residence Athena via Resid'Hotel's website or by phone (the reservation desk said "it is closed and we no longer offer these apartments").
I thought, based upon the letter we received last week, that they will continue offering their resorts/apartments for rent. Also, by closing Athena does this suggest that this is now also a "problem resort" (in contradiction to the knowledge I had sofar)? Even stranger, resorts which were allegedly already problem resorts continue to be offered for rent.
Is there anyone with further information on this?
Thanks,
Emphyteusis (owner of an apartment in residence Athena)
Perhaps those of us who have apartments in Carcassonne should try and get together via email to determine if there is anything that we can do for next year.
At least send them an email advising that we will be seeking their replacement if we do not get satisfactory responses as to reasons for the level of costs.
Following the letter sent by RH dated 30/3, does anybody know the contact details for the "mandataire judiciaire" Maitre Cardon and what exactly we have to write to him to recuperate 6months rent? Knowing the French preference for standard letters, does anybody have a copy of the standard letter or should/must this be done via a solicitor?
Emphyteus ... I note you have an appt in Residence Athena .. do you currently have a group you are talking to? I would be interested if you can get in touch as there are a few of us that have formed a group. Our appts are not rented in the summer, do you think that perhaps the message was indicating this and not that we had been removed?!
Tony, can you tell us which company you are signing with? Are they taking over all the apartments on the same basis or did you negotiate with them individually?
Hi folks,<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Is anybody else having trouble getting 1Q12 rent paid by Resid Hotel? We’re waiting for rent for La Clos de la Cite, Carcassonne. This was due 21st April. We have tried unsuccessfully since then to contact Marie Malveau by email, direct line and then via Resid Hotel. We have been told that she is the only person who can transfer that rent to our bank account.
Please could one of you let me have a quick summary of the residhotel situation. Did you have problems a few years ago which were then resolved ? But might be having issues with rent again ? I am asking as we are with Resitel ( La Grange) which has recently gone into sauvegaurd measures and have been asked to sign an addendum offering less rent and increased charges. If get this resolved could it all go wrong again in a couple of years time ? Thx
ResidHotel were in administration for about a year from 2009 to 2010. They were obliged to pay the rent during this period, in order to avoid liquidation. On exiting administration, the court gave them 10 years to pay back their debts, including unpaid rents from before they entered administration. That was two years ago and, for my residence, it was only a year before they started paying the rent late again (by up to 3 months). This situation has continued for the past year. We did not agree a rent decrease with them, but they have refused to pay the contractual rent increases over the past couple of years.
Be aware that if you accept a rent decrease, you are effectively reducing the value of your property, as the selling price of a leaseback property is dependent on the rent (not that you would easily be able to sell a leaseback property these days).
Thank you for your summary. Sounds like Resitel are in the same situation as Residhotel were. We have been told if we don't sign the revised lease our lease will be cancelled. Did ResidHotel try to reduce your rent or increase your charges - or did you simply stay on the same conditions during the administration period?
We haven't signed the addendum and as yet no cancelled lease as threatened. I am beginning to think that having the lease cancelled might be a blessing in disguise in the long run. Although we would have to repay the TVA we would no longer be a lease back even though most apartments in our building will be. Plus, if they cancel lease we will not owe them compensation if we don't renew the lease in the future (apparently on a commercial lease they could claim compensation for lost business !) So in theorywe should be able to rent our apartment privately through a local agent although we don't know how that would work in practice if Resitel still run the building for the other 90%. Ours is a ski property so should be rentable in the ski season (I hope). It is interesting what you say about the property value of a leaseback reducing if the rent reduces. We would like the option to sell in the longer term and you are not the first person to tell me that selling a leaseback is very difficult these days.
On 24 March 2009 the Cannes Court placed Residhotel into Receivership. Letters are being sent by the Receiver to all leaseback owners confirming the same.
An initial 6 months observation period has been set, during which the Receiver
will (hopefully) receive bids from other management companies. The company's Receiver may
suggest to the Court that the business be taken over by another leaseback
company, or could ask the Court to approve a company voluntary arrangements
know in English legal jargon as 'CVA'. In such a case payment of outstanding
rents could be spread by the Court over several years. The company could also
be liquidated of course.
During the observation period, The Receiver can break the leases of the weaker
residences and not allow owners of the other, more profitable resorts, to break
their leases.
Leaseback owners can attempt to cancel their leases pursuant to Article 37 of
the Insolvency Act 1985. There obvioulsy are tax (VAT) implications here.
Professional legal advice should always be sought before deciding on whether to
try to cancel the lease.
In any event, all leaseback owners whose rent remains unpaid, or who received
payment of their rent but not the bailiff's fees following service of a
'commandement de payer', should file their claim with the Mandataire in order to be admitted by the Cannes
Court as (non-preferential) Creditors in the Receivership.
This is called 'Declaration de creance '. The time-limit
for filing claims is two months from the date the Receivership
Order is published. Such time limit is extended to 4 months for overseas-based
creditors. Filing a 'Declaration de Creance' can be done direct, without having
to instruct a solicitor. Template documents (written in French) will probably
be circulated soon, for DIY use. Filing claims in French insolvency proceedings
is technical and I recommend doing this through a qualified French solicitor. These are called 'Avocats'.
Several owners have demanded Societe Art to disclose their list of co-owners, as required under French law. They also put the company on notice to provide a detailed breakdown of those costs which can be recouped against Residhotel, for inclusion in the above-mentioned 'Declaration de creance'.
ResidHotel haven't yet tried to modify the leases for my residence, but I believe that they are now in the process of trying to reduce rents in some residences. However, last year they did change the way we pay our charges - we initially paid just our bit and they paid their bit, but they have now got us to pay all the charges and are supposedly going to reimburse us annually for their part. So no, leaseback life doesn't necessarily turn out to be rosey, even if your company survives the administration period.
You seem to be well aware of the pitfalls of leaseback. Given the opportunity, I can appreciate how tempting it would be to exit the leaseback scheme. If your lease is cancelled, I believe you may be able to continue without repaying the VAT, provided that you keep your property within tourism and maintain the conditions of the LMNP scheme - I think you must provide 3 out of 4 (or 4 out of 5) basic services, such as laundry and breakfasts - but you would have to check the details.
Thanks Fabien. I actually meant can the company who cancels a lease chase for compensation if an owner refuses to accept poorer terms while while the company is in sauvegarde and they cancel the lease for that reason?
English
Français
Residhotel in Administration
Bertrand with RH entering into a safeguard procedure does this mean they have to honour all late payments to the "problematic" residences upto 24th March? I thought there were only 10 probelm residences not 12, which are the other 2?
Just on a synical note (or is it) 8 of the problem 10 are Ski resorts(they only have 19 in total), RH wait until the end of the skiing season to decaire themselves into a safeguard procedure, kill off those leases now, summer season looming what's to stop them pulling the same trick at the end of the summer season for 50% of the coastal residences (i.e. no rent due in July) then at the begining of October invent another 10 problematic resorts at the coast and refuse to pay them rent. These people need to be stopped ASAP and face up to their financial commitments before they disappear with all the takings and leaving alot of financial ruin behind them.
Annoyed39904.768125Residhotel in Administration
Betrand, thank you for your update however, it is somewhat concerning that there have always been 8 or 9 "problem" properties mentioned and here you mention 12. Are these 12 disclosed anywhere or do we all have to sit and wait for a letter? You seem better informed than everyone else. Best wishes
Residhotel in Administration
I agree Cath and from what I can gather we only have 30 days from 11 Jan in which to do so.
Does anybody know of the implications of us signing this document - I am concerned that some vital implications have got lost in my translation!! Has anybody else out there signed and returned this document?
Residhotel in Administration
Residhotel's suggested CVA provides for repayment of all admitted claims over a 10 years period. This, if approved by the Court, means that
claims will be eroded by inflation over 10 years (16% if we apply
inflation rates figures over the past 10 years...).
The Cannes Court will decide whether or not the CVA suggested by Rhode Tourisme (Resid'Hotel) is acceptable. Creditors' opinions are taken into consideration, but the final decision essentially lies with the Court.
Accepting or rejecting the CVA, by returning the acknowledgment slip to Mr Cardon, does not have direct legal consequences for individual creditors. It can impact on the overall situation however, as the more people accept the 10-years repayment CVA, the more likely it is the Court will validate it. So, signing the document does not directly affect individual claims, but may influence to golbal outcome.
At the end of the day, it is down to each property owner to consider whether or not Residhotel's attempt to be offered a 10 years interest-free loan on (unpaid) rents deserves, or not, a little push...
Fabien
Residhotel in Administration
Bertrand,
I am in a new Resid property in Carcassonne. The property was only completed in December 2008 and only rented for first time from January 2009. As we were only due to receive our first rent in April for the first quarter will we now too not receive the rent. How do we negotiate with the receiver for the balance of the three months.
Do we know the names of the properties that are in trouble.
Do you have an website that I can access
Cath
Residhotel in Administration
I have received a bill from Societe Art for my apartment in Carcassonne - I am slightly confused by this as I was informed that maintenance would come under the management company (by my solicitor who read through the contracts). Has anyone else received a bill? I was also surprised at how much it is given that it's a new development. Is there any cap on the amount?
Thanks
Residhotel in Administration
The lawyer that is representing the resident's group that I am in has recommeded rejecting this offer.
Residhotel in Administration
I too have received a bill. I have emailed them to try and establish the breakdown of it as it is well over €500 which seems excessive. Part of it also relates to the first quarter for which I have as yet received no rent and I am disputing having to pay this. To date I have received no response but that is no surprise. I would welcome any advice on this.
Thanks
Residhotel in Administration
hi
we own a leaseback in Saboia and are just getting our eyes opened about whats going on!. Is anyone else in Saboia and does anyone know if its one of the affected properties- wee didnt hear of any request for rent reduction but we also havent got any rent since last october!
any info much appreciated
Residhotel in Administration
Cath/ worried
Societe ART are a sister company of Residhotel, they ran our residence for a year, our association found them to be expensive and dare I say it corrupt as the monies owners were paying were not being spent on maintenance and under insuring the residence, hence, when there was a problem the insurance company were very relucant to pay out. When we got rid of them the question was asked where was the rest of the monies paid to them, the response it was spent on meetings and there were no accounts available. Like so many people administering leaseback developments they are all in it to make a quick buck at our expense.
Residhotel in Administration
Are you taking actions on the SYNDIC?
If your Syndic (co-ownership or maintenance company) is SOCIETE ART please have a look at the topic of the same name.
Regards,
Ed
Residhotel in Administration
How did you get rid of them? It sounds a bit dodgy if they are a sister company!
Residhotel in Administration
I would think that it is in our best interest to accept this offer. Does anyone go on to the french sites to see what their view of it is. Also is there a liklihood that those who reject it will get their money up front and the rest of us will feel very stupid then if we accept.
Cath
Residhotel in Administration
Good afternoon 'andmelffion',
Your comments are offending.
As previously mentioned, people are free to reply to Mr Cardon as they see fit.
I contribute to this forum on a free, disinterested basis, to try and help overseas-based investors understand some French insolvency law issues.
Whether or not leaseback owners take legal action, or Residhotel's CVA is rejected, I do not draw any personal advantage from this.
Fabien Cordiez
Advocate, Solicitor
Residhotel in Administration
I would agree with Fabien. I have always found his contributions both useful and impartial.
Cath
Residhotel in Administration
we managed to get rid of them at the annual AGM, the association managed to find an alternative management company who quoted for the running of the place and were voted into position much to the annoyance of ART. Be warned though ART do try to get you to give them your proxy vote if you are not attending prior to the AGM to block any motions that may interfear with their nice little earner.
Re-sister companies you don't have to dig to deep to find the developer, builder, promoter, management company and leasee all pee into the same pot and are in someway connected. The scheme seems to be a con from start to finish.
Residhotel in Administration
Hi, I have received the same letter from Residhotel last week as per the post on the http://residhotel.over-blog.com/ - I take it this letter is for leaseback owners whose apartments are not on the Black list. Have the owners of apartments on the black list recieved a different letter or the same?
Thanks Nick
owner of an apartment at Isola2000
Residhotel in Administration
I got a letter from Rhode Tourism dated 30th Mar. I have no idea what it is about, can anyone enlighten me, my french is very poor. I have tried using the google translation site, but it is very unclear.
Residhotel in Administration
'if you are offering free legal advice M Cordez perhaps you should offer
it to everybody - your comments on here are helpful but no more than
that.'
-----------------------------------------------
Dear Sir or Madam,
I disagree with your expert opinion, but you are of course free to express your views, provided you do this in a courteous manner.
In the light of your rude comments, I find it unappropriate to continue with any further contribution to this forum.
Yours faithfully,
Fabien Cordiez
Avocat à la Cour, Solicitor
_____________________________
19
rue de Montigny, 13100 Aix-en-Provence, France
UK Tel: 0207-148-5563 IRL: (01)-431-1301 FR: + 33(0)486-688-968
fabien.cordiez@solicitor.fr www.solicitor.fr
Member
of the Law Society of England & Wales - n° 331485 - practising law as Avocat member of the French Bar Association
Residhotel in Administration
Hello
What are your thoughts about the new amendments on creating a company (SARL, SAS) by owners ?
Is it possible to have 2 companies in the same residence?
Rgds,
Residhotel in Administration
On 5 February 2013 Rhode Tourisme was wound up by the
Cannes Commercial Court. The Court also ruled that Rhode
Tourisme would keep running the business for another 3
months. The Court-appointed Receiver, Mr Huertas,
envisages cancelling some leases earlier, at the end of
this month.
No legal obligation exists for leaseback owners to
execute a new lease or a management agreement with
another leaseback company such as Zenitude for example.
This means that owners should be able to exit the
leaseback scheme without being liable to paying any early
cancellation indemnity. Beware!: Under a tax viewpoint,
some of the initial VAT rebate may be due, although a
grace period applies since cancellation originates from
Rhode Tourisme's liquidation.cordiez41316.4526967593
Residhotel in Administration
I just noticed that it is no longer possible to book Residence Athena via Resid'Hotel's website or by phone (the reservation desk said "it is closed and we no longer offer these apartments").
I thought, based upon the letter we received last week, that they will continue offering their resorts/apartments for rent. Also, by closing Athena does this suggest that this is now also a "problem resort" (in contradiction to the knowledge I had sofar)? Even stranger, resorts which were allegedly already problem resorts continue to be offered for rent.
Is there anyone with further information on this?
Thanks,
Emphyteusis (owner of an apartment in residence Athena)
Residhotel in Administration
Perhaps those of us who have apartments in Carcassonne should try and get together via email to determine if there is anything that we can do for next year.
At least send them an email advising that we will be seeking their replacement if we do not get satisfactory responses as to reasons for the level of costs.
Residhotel in Administration
Following the letter sent by RH dated 30/3, does anybody know the contact details for the "mandataire judiciaire" Maitre Cardon and what exactly we have to write to him to recuperate 6months rent? Knowing the French preference for standard letters, does anybody have a copy of the standard letter or should/must this be done via a solicitor?
Alison (La Saboia)
Residhotel in Administration
I thought that we got rid of them for the apartments at Isola2000 Les Chataigniers but I am still receiving bills from them.
Residhotel in Administration
Further to my posting yesterday, Residhotel's Trustee
informed me today that all leases will be cancelled on 18
March 2013. Some leases may actually be cancellead earlier.
Fabien Cordiez
cordiez41317.6466666667
Residhotel in Administration
Emphyteus ... I note you have an appt in Residence Athena .. do you currently have a group you are talking to? I would be interested if you can get in touch as there are a few of us that have formed a group. Our appts are not rented in the summer, do you think that perhaps the message was indicating this and not that we had been removed?!
Residhotel in Administration
Tony, can you tell us which company you are signing with? Are they taking over all the apartments on the same basis or did you negotiate with them individually?
Residhotel in Administration
Ranger (otherwise known as K8?) - I'm actually in your group (but obviously under a different name).
I naively believed our apartments are also rented during the summer as the residhotel website has both winter and summer pictures with our residence?
Residhotel in Administration
Your comments are inappropriate, bearing in mind that I
contribute to this forum on a goodwill basis.
Anyway, people are free to face such situations on their
own or seek professional advice. Knowledge is not 'throwing
good money after bad'!
Residhotel in Administration
Hi,
Here is the postal address for "mandataire judiciaire":
Residhotel in Administration
Hi folks,<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Is anybody else having trouble getting 1Q12 rent paid by Resid Hotel? We’re waiting for rent for La Clos de la Cite, Carcassonne. This was due 21st April. We have tried unsuccessfully since then to contact Marie Malveau by email, direct line and then via Resid Hotel. We have been told that she is the only person who can transfer that rent to our bank account.
Regards,
Tuulia
Residhotel in Administration
HI,
Here is the address for the "mandataire" maitre Cardon:
15 impasse de l'horloge; 06110 Le Cannet, France.
TEL: 0033 (0)4 92 18 33 10
You need to declare all your lost; rent, taxes, co-ownership charges + interests.
PS: BE CAREFUL AS SOME SOLICITORS ARE VERY QUICK TO TAKE ACTIONS WHICH ARE NOT GOING ANYWHERE AND YOU END UP WITH BIG FEES.
Residhotel in Administration
Hi, Has anyone received their rent from Residhotel for the last quarter yet?
Residhotel in Administration
I am in the same boat - still haven't been paid for q3 2011 and q1 2012.
Residhotel in Administration
As anyone done anything regarding the Syndic "Societe ART".
See other topic on this Website.
Regards
Ed
Residhotel in Administration
Yes, arrived last week
Residhotel in Administration
Hi Residhotel owners
Please could one of you let me have a quick summary of the residhotel situation.
Did you have problems a few years ago which were then resolved ? But might be having issues with rent again ?
I am asking as we are with Resitel ( La Grange) which has recently gone into sauvegaurd measures and have been asked to sign an addendum offering less rent and increased charges.
If get this resolved could it all go wrong again in a couple of years time ?
Thx
Residhotel in Administration
I just wondered if those of you who have had leases cancelled have had to pay any compensation (I woudl assume not) - just the VAT?
Residhotel in Administration
Several customers of mine recently got paid the rent due in respect of the second quarter of this year.
Fabien
mccos40002.5138425926
Residhotel in Administration
ResidHotel were in administration for about a year from 2009 to 2010. They were obliged to pay the rent during this period, in order to avoid liquidation. On exiting administration, the court gave them 10 years to pay back their debts, including unpaid rents from before they entered administration. That was two years ago and, for my residence, it was only a year before they started paying the rent late again (by up to 3 months). This situation has continued for the past year. We did not agree a rent decrease with them, but they have refused to pay the contractual rent increases over the past couple of years.
Be aware that if you accept a rent decrease, you are effectively reducing the value of your property, as the selling price of a leaseback property is dependent on the rent (not that you would easily be able to sell a leaseback property these days).
Hope that helps.
Residhotel in Administration
Dear Cath,
No compensation is due to the leaseback company where
cancellation originates from the leaseback company's own
failure e.g. insolvency.
With regards to the VAT which owners were exempted from
at the time of purchase, this should be due, albeit on a
pro-rated basis.
Where a leaseback scheme stops as a result of liquidation
however, French tax authorities give investors a 12
months grace period before claiming the VAT back. In
other words, leaseback owners have a maximum of 1 year to
find another management company. Such management company
shall need to provide those services defined by the Frech
tax code in order for the property to retain its
leaseback VAT-exmption status.
I hope this helps.
Residhotel in Administration
Hi Clive
Thank you for your summary. Sounds like Resitel are in the same situation as Residhotel were. We have been told if we don't sign the revised lease our lease will be cancelled.
Did ResidHotel try to reduce your rent or increase your charges - or did you simply stay on the same conditions during the administration period?
We haven't signed the addendum and as yet no cancelled lease as threatened. I am beginning to think that having the lease cancelled might be a blessing in disguise in the long run. Although we would have to repay the TVA we would no longer be a lease back even though most apartments in our building will be. Plus, if they cancel lease we will not owe them compensation if we don't renew the lease in the future (apparently on a commercial lease they could claim compensation for lost business !)
So in theorywe should be able to rent our apartment privately through a local agent although we don't know how that would work in practice if Resitel still run the building for the other 90%.
Ours is a ski property so should be rentable in the ski season (I hope).
It is interesting what you say about the property value of a leaseback reducing if the rent reduces. We would like the option to sell in the longer term and you are not the first person to tell me that selling a leaseback is very difficult these days.
Residhotel in Administration
Thanks Fabien. Does that also apply (ie no compensation) if you have had a lease cancelled after refusing to agree to unfavourable new terms?
Residhotel in Administration
I am not a French tax solicitor but can advise that, to
my knowledge, French tax authorities only apply a one
year exemption where a lease is cancelled following
liquidation, not where leaseback owners have had their
lease cancelled for having refused new terms.
On the other hand, a leaseback company cannot, in normal
circumstances, unilaterally cancel one's lease. Such
cancellation usually happens where the company is in
Safeguard or Receivership and the Trustee
('Administrateur') try and impose new rental terms on
leaseback property owners. In the end, cancellation
arises as a result of the management company's insolvency
and I doubt in such a case the local taxman would
immediately try and reclaim part of the intial VAT
rebate.
Residhotel in Administration
On 24 March 2009 the Cannes Court placed Residhotel into Receivership. Letters are being sent by the Receiver to all leaseback owners confirming the same.
An initial 6 months observation period has been set, during which the Receiver
will (hopefully) receive bids from other management companies. The company's Receiver may
suggest to the Court that the business be taken over by another leaseback
company, or could ask the Court to approve a company voluntary arrangements
know in English legal jargon as 'CVA'. In such a case payment of outstanding
rents could be spread by the Court over several years. The company could also
be liquidated of course.
During the observation period, The Receiver can break the leases of the weaker
residences and not allow owners of the other, more profitable resorts, to break
their leases.
Leaseback owners can attempt to cancel their leases pursuant to Article 37 of
the Insolvency Act 1985. There obvioulsy are tax (VAT) implications here.
Professional legal advice should always be sought before deciding on whether to
try to cancel the lease.
In any event, all leaseback owners whose rent remains unpaid, or who received
payment of their rent but not the bailiff's fees following service of a
'commandement de payer', should file their claim with the Mandataire in order to be admitted by the Cannes
Court as (non-preferential) Creditors in the Receivership.
This is called 'Declaration de creance '. The time-limit
for filing claims is two months from the date the Receivership
Order is published. Such time limit is extended to 4 months for overseas-based
creditors. Filing a 'Declaration de Creance' can be done direct, without having
to instruct a solicitor. Template documents (written in French) will probably
be circulated soon, for DIY use. Filing claims in French insolvency proceedings
is technical and I recommend doing this through a qualified French solicitor. These are called 'Avocats'.
Several owners have demanded Societe Art to disclose their list of co-owners, as required under French law. They also put the company on notice to provide a detailed breakdown of those costs which can be recouped against Residhotel, for inclusion in the above-mentioned 'Declaration de creance'.
Fabien Cordiez http://www.solicitor.fr/leasebacks.html
Residhotel in Administration
Once user andmelffion 's account is removed from frenchleaseback.net, I will consider resuming my contributions to this forum.
Fabien Cordiez
Residhotel in Administration
ResidHotel haven't yet tried to modify the leases for my residence, but I believe that they are now in the process of trying to reduce rents in some residences. However, last year they did change the way we pay our charges - we initially paid just our bit and they paid their bit, but they have now got us to pay all the charges and are supposedly going to reimburse us annually for their part. So no, leaseback life doesn't necessarily turn out to be rosey, even if your company survives the administration period.
You seem to be well aware of the pitfalls of leaseback. Given the opportunity, I can appreciate how tempting it would be to exit the leaseback scheme. If your lease is cancelled, I believe you may be able to continue without repaying the VAT, provided that you keep your property within tourism and maintain the conditions of the LMNP scheme - I think you must provide 3 out of 4 (or 4 out of 5) basic services, such as laundry and breakfasts - but you would have to check the details.
Residhotel in Administration
Thanks Fabien. I actually meant can the company who cancels a lease chase for compensation if an owner refuses to accept poorer terms while while the company is in sauvegarde and they cancel the lease for that reason?
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