I'm in the same position as you Dundee. I have a studio apartment near Paris which is run by Suites & Park, formally Suites Inn, formally a dozen other names. I've had the apartment for 7 years and they have always paid the rent...albeit late but the 2010 first quarter, due in April, hasn't been paid. They don't reply to e-mail any more.
This is only the first payment they have missed so perhaps I'm panicking a little early but I just can't pay the mortgage without the rental income.
Anyone know what stages I should follow to get paid?
Your lease mentions nothing about having to pay compensation if you decide not to renew the lease after the 9 year period but this over-arching clause is still in existence. Are you surprised that the French Law on this is biased in favour of French management companies?
My leaseback company has just sent me an exclusion to the lease that the electricity has not been connected. So they issue me a signed lease and then when I have signed it decided to issue an exclusion that the power is not connected?? They then refuse to speak to me or reply to my correspondance. Scum of the earth.
I and 3 others are booked on a flight to France in October equipped with a crow bar, sledge hammer and a new set of locks. Failing that I may decide that I want to have an open fire in my property despite the fact I do not have a chimney. My property, my choice.
Do not tell me this does not work because I have done it before and it does!
I then intend to make everybodies life who is associated with this leaseback a total nightmare. Pictures and videos on a website, sales agents, notaires you name it. I will then inform the tourist board and all the major international agents of the scam on site and ask if they want to be associated with this. I will then send out flyers to local businesses and residences.
I have already been in touch with the organisers of the French Property Expo in London next week telling them I will be there next Friday with my leaflets and if they try to move me on there will be one hell of a show down.
They have messed with the wrong person this time I am afraid.
Thanks for that vital piece of information Liam. Perhaps if you have all of the answers you might want to visit www.golf-vievola-hotel.com and give me the wisdom of your experience and comment on my website to fight this campaign.
Well guys what can I say, my phone has not stopped ringing!
Over the last 2 days I have spoken to a French Minister from Paris, my sales agent who has agreed to meet me in October on site with the developer and last but not least somebody from London who promotes tourism in France. What a busy 2 days!
The net result is that I can now consider this as a job done for now so the site is being reduced to a holding page for the time being.
Good luck with your Command De Pays or whatever they are.
Well done. I hope you get things sorted to your satisfaction. I admire your resolve and determination. When you are in a fight there is no point fighting clean when the other guy is fighting dirty with the collusion of the referee. No doubt your actions will help in no small way to get this whole leaseback situation improved. At the end of the day we are all ordinary people with mortgages who just want to be treated fairly with our leases honoured and have the French legal system enforce this.
I had it today from a French official, that the tourist industry in France is taking a right hammering at the moment, mostly because of the Euro. Hotel prices this summer were lower than ever before. As a result leaseback properties are also on the slide there is no doubt.
However, these people are not doing themselves any favours by not talking to owners. Today I proposed to her that companies start using a reference index for a temporary rate drop as the economies recover.
Most people are seeing this as an opportunity to enforce a mandatory reduction of rents at a market low. I deal in stocks and equities and know that you do not sell out when the market is at a low. You hold and wait for the market to recover and try to break even. Leasebacks should hold the same warning as shares being that your investment can go down as well as up.
Those people that sign or accept lower yields will pay for it for the next 20 years. Most who have to sign and have no choice have my sympathy.
I still stand by my thoughts that if you are not getting paid, get together en mass and drill the locks. When they come after you for compo (it will not go that far) ask them to take it out of the rents they owe you.
Joannes post at the top of the page hits the hammer on the head, lease or no lease they would be fools to take you to court with that clause written in.
The people who use this board need to start to smell the beans a bit more and treat people how they are getting treated themselves instead of being a bunch of push overs. I however am the first to admit that I do not necessarily represent the best example of being a true brit at all.
My grandad along with many thousands of others landed on their beaches 60 years ago and kicked arse. I am sure he would be proud of me for standing my ground and taking another fight to French soil and using the rights he and so many others lost there lives for all those years ago.
I wouldn’t trust P&S/Suite Inn to do the right thing by owners.
I own a leaseback studio in <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Strasbourg which was managed by City Park Affaires. CPA appointed P&S as subcontractor to run day to day operations in the residence. When CPA stopped paying our rents we formed an association and took them to the local tribunal to cancel the lease, recover unpaid rents and appoint a new company.
P&S was one of the candidates, they “offered” to take over the leases minus 20% of current rents. The association declined their very generous offer based on their close relationship with CPA and the past mismanagement of the residence (an inspection revealed the residence was unclean, staff absent on week-ends and the occupancy rate was well below what it should have been).
We have since kicked CPA and P&S out of the residence and appointed a new company. Although we have a court order in our favour CPA claims that the rent money was collected by P&S and P&S claim CPA owe them money.
Be careful when you deal with these people, they set up numerous companies under various names as smokescreens and they are currently embarking on a program to take over several leaseback residences in financial trouble. They do not care about owners and behave in an unethical fashion. To be avoided…
Since I found out about Quietude going into administration, I have not paid my mortgage, the request for property tax nor do I intend paying for a tax return to be filed as I simply cannot afford to do so. I have had a couple of letters from the bank but paid the morgage all year without getting any rent in to cover this. Does anyone have any experience with this as I I happy (maybe too strong a word) to let the bank take this and hopefully forget about the whole disastrous experience. I am not sure how they will persue this and if they can come after assets I have in the UK. I would like to speak to a solicitor about it and would be grateful for any suggestions or to see if anyone else is in this boat. I did receive the paltry sum of 737 euros rent last week but do not expect to get much more, especially as we are in the winter months.
I have just returned from my latest mission to France (see above posts) that went very well. I was going back to get my keys after not having any rent for almost 2 years.
As discussed I took excessive baggage with me being a hammer drill and two sets of batteries, a jemmy bar and a sledge hammer. I also hired a car with extra insurance as a last resort to drive through reception. I also starved myself for 24 hours before I left the UK with no food or fluid so if Idid get arrested and thrown into clink, within 24 hours I would be in a bad way. I told my family to leave me where I was and contact the press. I was also prepared to go on a fluid and solids strike and not use the toilet. I am sure you get the picture.
So how dissapointed was I when I turned up and found the door open and two lovely ladies hanging me a new set of curtains and replenishing my cupboards with new crockery! Inspection over and a discussion about the weather, keys were handed back and hey presto there I was alone in my property with half of B and Q beside me.
Long and short was I went and had a a few pints came back and done a thorough clean before going to bed a bit shell shocked.
Handing keys back to the bank simply is impossible in France. It would not be a good idea anyway. You cannot personally go Bankrupt in France unless you are a French citizen, or a
foreigner whose main place of residence is France. If one decides not to continue paying the mortgage and return the keys to the lender, the latter will initiate foreclosure
proceedings and the property will eventually be sold at auction, which
could result in the owner remaining liable for any shortfall, including mortgage penalties and
auction charges that may not be covered by the auction proceeds. I am unaware whether it is, or not, lenders' policy to enforce
payment of loans/mortgages (the shortfall) against borrowers situated
overseas. A Judgment would have to be obtained in France first and the
process for enforcing such Judgment in the UK or Ireland, is called
'Exequatur'. The procedure for this between EU Countries is simplified
nowadays. I have
little doubt that foreign Courts would accept such requests from a French entity.
A UK Judge for example, could not re-assess the case, unless the French Court Order
contravenes essential legal principles of UK law, which is extremely
rare in financial & tax matters.
Pursuant to the French Consumer Protection
Code, borrowers can apply for a 'repayment holiday' (deferred payment)
of up to 24 months if
they are suffering financial hardship. Where the mortgage in arrears is
less than
3,800 Euro, a simple Application, rather than a Summons, can be filed
with the
local Court.
This, if applicable, must be done prior to lenders formally issuing a
notice of foreclosure, i.e. that the borrower is defaulting on his/her
loan repayment
I'm wondering whether Mr Cordiez, or someone else, can explain the role of Credit Logement if we can't make our mortgage payments. When I purchased my apartment, I paid a significant amount (one-off payment) to subscribe to Credit Logement, but it's very difficult to find out exactly what they do.
If we can't make the monthly mortgage payments to the bank, does Credit Logement make the payments for us (as a kind of insurance), or does Credit Logement buy our complete debt from the bank and then we make arrangements with Credit Logement to pay off the debt?
Crédit Logement is an unlisted financial company held mainly by BNP Paribas, Crédit
Agricole, Crédit Lyonnais and Société Générale (each with 16,50%).
Credit logement offers guarantees to all major French lenders, to cover the credit risk attached to residential loans and avoid mortgage registration. Unlike standard mortgage charges, about 75% of the guarantee's costs is refundable on loan termination/repayment.
Crédit Logement provides guarantees in the form of collateral security. The guarantee is based on risk-pooling in the form of a
contribution by each borrower to the mutual guarantee fund. It could therefore be compared to a kind of co-operative form of insurance, but Credit Logement does not cover YOU against the risk of being in default through illness or loss of income or redundancy for example. It protects LENDERS against borrowers' insolvency beyond what is usually covered by 'disability & loss of employment' insurance policies.
So, Credit Logement does not make the payment of your behalf like a kind of insurance. Instead, Credit Logement discharges the lender and then makes arrangements with you to try & recoup its loss.
Thanks Fabien for the rapid response. So, if a property were to be repossessed and sold at auction, would this be done by Credit Logement rather than by the bank?
In all honesty, I must confess that I do not know!
I would need to search the issue (and inspect your contract with CL), but once the bank's mortgage is cleared by CL, these are subrogated and could most probably repossess the property, although I understand that, in practice, CL clearly favour a voluntary sale instead.
eventually the bank will take possession and sell the property (if they get any buyers) and more than likely a loss will be realised. The bank will make a decision to pursue based on:
the amount of the debt
what assets you have
and whether there is a likelyhood to recover something.
In the end it's up to the bank to write off the debt and cut the losses or try to recover the amount owing.
Credit Logement do not automatically acquire a lien or pledge on defaulting borrower's French property, unless a specific Court Application is lodged in that respect.
Credit Logement's official policy consists in 'assisting' borrower with the (private) sale of their property. I have no doubt the company takes more forceful steps where borrowers fail to co-operate with them however.
I just wanted to check has anyone actually handed their keys back to their bank and if so, what has been the response. I can only think that this will become more prevelant as rents stop being paid, especially as we come into the winter months with little/no letting going on.
In my opinion this is the last resort. No doubt like many of us you have invested a lot of your savings in this. Handing back the keys is allowing these unscrupulous people to win. What really irritates me is when I read forums on the legal issues pertaining to this, i.e. the law always favours the tenant, e.g. automatic right to renewal, compensation etc. Natural justice would dictate that the law should favour the party who keeps their side of the bargain and honours the legal document, i.e. the owner (he/she is the one who takes out a 20-25 year mortgage and invests life savings and is not a SARL (French PLC) who can decide to shut up shop at any time. If you read posts by people like mutley in this forum you will see how French law protects this disgraceful bahaviour. What surprises me is that a BBC watchdog-type programme has not gone to France to uncover this whole French leaseback issue where hundreds if not thousands of people are in this position.
The last post expresses my own concerns very well. In fact, I have written to the French Embassy in London and the British Embassy in Paris to complain about the difficulty French law puts us in regarding the VAT bill and compensation for which we become liable if we dare escape the unscrupulous management companies. I have had replies from neither. Perhaps this approach would be more effective if others were to do the same (there is an e-mail address for the British Embassy).
I have also thought of writing to the BBC Watchdog programme and/or the ITV Tonight programme (although, personally, I don't want to appear on TV). I think one way of getting co-operation from the French government would be to very publicly embarrass them into action through high-profile TV coverage. I would be interested to hear what others think of this idea - hopefully, some of you wouldn't be so camera-shy and would be prepared to participate. Please provide feedback.
Hi guys, as my name has been mentioned I thought I would join in. I have to be very careful as to what I say on here as you will be very suprised as to who reads posts!!!
Knowing what I know now, if I was to have my time again I would quite simply fly over to France en mass drill the locks and stick two fingers up to them all. Do not messs around with lawyers and CDP. This is what they expect you to do. Get your property back and let them take you to court. By the time it goes to court the business will be insolvent, you will have your property back and be able to tee up a new management company if you want.
I have another lease back with rent due in March 2010 and I intend to make this a very very painful experience for the management company if they do not pay. Before I signed the lease I gave them every opportunity to back out. I quoted the gloomy world credit crunch, the terrible Euro exchange rate etc etc The residence is set in a golf course in a very small district in France.
Firstly I will buy a domain name that represents the management company and property and then set up a website. I will visit site and video what is going on and post it on the site. I will then contact all of the booking agents who use the residence and give them the domain name and ask for their comments so they can be posted on the site.
Believe it or not this is all perfectly legal IF you do it right.
If your best friend works for a massive tour operator such as "Ex....." then you can also push from that direction too.
Contact the local Police in writing and let them know exactly what you are doing and why. Do a leaflet drop to the local businesses and residences with the website address and keep them informed of what is going on and who is doing it. Make your position clear, do not make it personal but let them know how you are suffering.
Tourism and the tourism business is a very very fragile industry and can be damaged immensely. No major operator wants to be associated with crime, fraud and even worse put their clients in a position of disrepute. This is a major concern. Imagine an owner confronting a guest who is staying in their property and they are not getting paid. A tour operators nightmare.
Do not suffer quietly, suffer publicly and let everybody else suffer with you. If nobody visits the residence, nobody eats out, nobody rents a car, nobody visits the local points of interest, nobody puts money into the local economy.....I am sure you get the picture.
Changing the locks yourself would not be a good idea I am afraid.
Only a bailiff can arrange this, provided Judgment has first been entered in your favour, allowing you to do this and confirming that the lease is broken. Such a Judgment cannot be issued whilst the leaseback company is in Receivership or in Liquidation.
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
Member of the Law Society of England & Wales – n° 331485 - practising law as Avocat member of the French Bar Association
Thanks for the clarification. It just illustrates my point that the French legal system is structured to protect the party in the lease (i.e. the management company) who fails to meet the requirements of the lease and leaves the party who meets their requirements (i.e. the owner) in a situation where they can wait years to have any rent paid or repossess the property. This is not justice.
You are absolutely right: French law (the Decree of 30 September 1953) mostly protects tenants (the Management Company). With regards to leasebacks, the French Governement is considering changing the law to ensure that, in the future:
- Property developers become jointly and severally liable, with leaseback companies, for payment of the rent over a given period e.g. the first 3 years;
- Leaseback companies cannot break the lease every three years, as is often the case now (unless otherwise stated in the lease agreement);
I doubt the above suggested changes will actually suffice to protect leaseback investors though!
This is further evidence to support Mutley's idea to inform potential investors of the actual facts pertaining to leasebacks. It is crazy that a country that prides itself on its legal system will actually treat mortgage holders who fulfill all of their requirements of their lease agreement in this way. You can be damn sure that if the French banks go before the legal system for a repossession for non-payment of mortgage payments (caused by non-payment of rent by French management companies) the judge will find in their favour. As the real truth starts to emerge this will damage the whole leaseback system for the French as would-be investors avoid leaseback like the plague. What could have been a win-win situation is now being slowly turned into a lose-lose situation.
English
Français
I'm in the same position as you Dundee. I have a studio apartment near Paris which is run by Suites & Park, formally Suites Inn, formally a dozen other names. I've had the apartment for 7 years and they have always paid the rent...albeit late but the 2010 first quarter, due in April, hasn't been paid. They don't reply to e-mail any more.
This is only the first payment they have missed so perhaps I'm panicking a little early but I just can't pay the mortgage without the rental income.
Anyone know what stages I should follow to get paid?
Hi r.
Sorry to hear that your management company are late with this years first quarter rent payment.
Can you tell me the name of the residence that your appartment is in.
Rasher.
Hello Rasher,
It's in residence Compte d'Artoise, Maison Laffitte.
So Fabien, what you are actually saying is, it is
pointless bringing them to court to take back your
property even though they have not paid any rent. I am
sure this must be against European law, this is not what
is said on the Lease. Article 10 Avoidance Clause quoted
on my lease:
"The parties hereby agree that all of the clauses of this
lease are essential and that accordingly, in the event of
non-payment of a single instalment on its exact due date
or in th event of non performance of any one of the
clauses contained in this lease, one month after a formal
order is given to so pay or perform and such order is not
complied with, this lease will be automatically
terminated if the lessor so wishes, without any
requirement to undertake any formal legal action, without
prejudice to Lessors right to take any legal action."
This to me means I am entitled to claim back my property,
there is nowhere on my lease as far as I am aware that
says by French law that the tenant has the right to stay
in the property without paying rent.
Neither was I informed when buying this property that
that was the case. We as Leaseback owners have got to
have some rights, what if all leaseback owners just
refused to pay their mortgages in protest, I really think
drastic action is going to have to be taken here, as the
matter is only getting worse.
Joanne
Your lease mentions nothing about having to pay compensation if you decide not to renew the lease after the 9 year period but this over-arching clause is still in existence. Are you surprised that the French Law on this is biased in favour of French management companies?
JuanAzur,
No it doesn't mention that either, another matter we were
never informed about. I just cannot understand how these
Property Agencies are getting away with this false
advertising either, these conditions should be specifically
mentioned to oversea clients, how are they expected to know
the laws of France, and they should also be in the lease as
at the end of the day this is the agreement you enter into,
not the "hidden details".
Fabien
Thanks for your advice but I will decline it.
My leaseback company has just sent me an exclusion to the lease that the electricity has not been connected. So they issue me a signed lease and then when I have signed it decided to issue an exclusion that the power is not connected?? They then refuse to speak to me or reply to my correspondance. Scum of the earth.
I and 3 others are booked on a flight to France in October equipped with a crow bar, sledge hammer and a new set of locks. Failing that I may decide that I want to have an open fire in my property despite the fact I do not have a chimney. My property, my choice.
Do not tell me this does not work because I have done it before and it does!
I then intend to make everybodies life who is associated with this leaseback a total nightmare. Pictures and videos on a website, sales agents, notaires you name it. I will then inform the tourist board and all the major international agents of the scam on site and ask if they want to be associated with this. I will then send out flyers to local businesses and residences.
I have already been in touch with the organisers of the French Property Expo in London next week telling them I will be there next Friday with my leaflets and if they try to move me on there will be one hell of a show down.
They have messed with the wrong person this time I am afraid.
Mutley
Thanks for that vital piece of information Liam. Perhaps if you have all of the answers you might want to visit www.golf-vievola-hotel.com and give me the wisdom of your experience and comment on my website to fight this campaign.
Well guys what can I say, my phone has not stopped ringing!
Over the last 2 days I have spoken to a French Minister from Paris, my sales agent who has agreed to meet me in October on site with the developer and last but not least somebody from London who promotes tourism in France. What a busy 2 days!
The net result is that I can now consider this as a job done for now so the site is being reduced to a holding page for the time being.
Good luck with your Command De Pays or whatever they are.
Mutley
Mutley
Well done. I hope you get things sorted to your satisfaction. I admire your resolve and determination. When you are in a fight there is no point fighting clean when the other guy is fighting dirty with the collusion of the referee. No doubt your actions will help in no small way to get this whole leaseback situation improved. At the end of the day we are all ordinary people with mortgages who just want to be treated fairly with our leases honoured and have the French legal system enforce this.
Thanks Juan.
I had it today from a French official, that the tourist industry in France is taking a right hammering at the moment, mostly because of the Euro. Hotel prices this summer were lower than ever before. As a result leaseback properties are also on the slide there is no doubt.
However, these people are not doing themselves any favours by not talking to owners. Today I proposed to her that companies start using a reference index for a temporary rate drop as the economies recover.
Most people are seeing this as an opportunity to enforce a mandatory reduction of rents at a market low. I deal in stocks and equities and know that you do not sell out when the market is at a low. You hold and wait for the market to recover and try to break even. Leasebacks should hold the same warning as shares being that your investment can go down as well as up.
Those people that sign or accept lower yields will pay for it for the next 20 years. Most who have to sign and have no choice have my sympathy.
I still stand by my thoughts that if you are not getting paid, get together en mass and drill the locks. When they come after you for compo (it will not go that far) ask them to take it out of the rents they owe you.
Joannes post at the top of the page hits the hammer on the head, lease or no lease they would be fools to take you to court with that clause written in.
The people who use this board need to start to smell the beans a bit more and treat people how they are getting treated themselves instead of being a bunch of push overs. I however am the first to admit that I do not necessarily represent the best example of being a true brit at all.
My grandad along with many thousands of others landed on their beaches 60 years ago and kicked arse. I am sure he would be proud of me for standing my ground and taking another fight to French soil and using the rights he and so many others lost there lives for all those years ago.
Mutley
Hi r,
Any word on your rent which was overdue from P&S?
Hope it worked out.
P 4
I wouldn’t trust P&S/Suite Inn to do the right thing by owners.
I own a leaseback studio in <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Strasbourg which was managed by City Park Affaires. CPA appointed P&S as subcontractor to run day to day operations in the residence. When CPA stopped paying our rents we formed an association and took them to the local tribunal to cancel the lease, recover unpaid rents and appoint a new company.
P&S was one of the candidates, they “offered” to take over the leases minus 20% of current rents. The association declined their very generous offer based on their close relationship with CPA and the past mismanagement of the residence (an inspection revealed the residence was unclean, staff absent on week-ends and the occupancy rate was well below what it should have been).
We have since kicked CPA and P&S out of the residence and appointed a new company. Although we have a court order in our favour CPA claims that the rent money was collected by P&S and P&S claim CPA owe them money.
Be careful when you deal with these people, they set up numerous companies under various names as smokescreens and they are currently embarking on a program to take over several leaseback residences in financial trouble. They do not care about owners and behave in an unethical fashion. To be avoided…
Since I found out about Quietude going into administration, I have not paid my mortgage, the request for property tax nor do I intend paying for a tax return to be filed as I simply cannot afford to do so. I have had a couple of letters from the bank but paid the morgage all year without getting any rent in to cover this. Does anyone have any experience with this as I I happy (maybe too strong a word) to let the bank take this and hopefully forget about the whole disastrous experience. I am not sure how they will persue this and if they can come after assets I have in the UK. I would like to speak to a solicitor about it and would be grateful for any suggestions or to see if anyone else is in this boat. I did receive the paltry sum of 737 euros rent last week but do not expect to get much more, especially as we are in the winter months.
Duffmary,
If I may ask, what property and/or management company is this regarding to?
Rgds, Emphyteusis
I have just returned from my latest mission to France (see above posts) that went very well. I was going back to get my keys after not having any rent for almost 2 years.
As discussed I took excessive baggage with me being a hammer drill and two sets of batteries, a jemmy bar and a sledge hammer. I also hired a car with extra insurance as a last resort to drive through reception. I also starved myself for 24 hours before I left the UK with no food or fluid so if Idid get arrested and thrown into clink, within 24 hours I would be in a bad way. I told my family to leave me where I was and contact the press. I was also prepared to go on a fluid and solids strike and not use the toilet. I am sure you get the picture.
So how dissapointed was I when I turned up and found the door open and two lovely ladies hanging me a new set of curtains and replenishing my cupboards with new crockery! Inspection over and a discussion about the weather, keys were handed back and hey presto there I was alone in my property with half of B and Q beside me.
Long and short was I went and had a a few pints came back and done a thorough clean before going to bed a bit shell shocked.
One down one to go.
Mutley
Mary,
Handing keys back to the bank simply is impossible in France. It would not be a good idea anyway. You cannot personally go Bankrupt in France unless you are a French citizen, or a
foreigner whose main place of residence is France. If one decides not to continue paying the mortgage and return the keys to the lender, the latter will initiate foreclosure
proceedings and the property will eventually be sold at auction, which
could result in the owner remaining liable for any shortfall, including mortgage penalties and
auction charges that may not be covered by the auction proceeds. I am unaware whether it is, or not, lenders' policy to enforce
payment of loans/mortgages (the shortfall) against borrowers situated
overseas. A Judgment would have to be obtained in France first and the
process for enforcing such Judgment in the UK or Ireland, is called
'Exequatur'. The procedure for this between EU Countries is simplified
nowadays. I have
little doubt that foreign Courts would accept such requests from a French entity.
A UK Judge for example, could not re-assess the case, unless the French Court Order
contravenes essential legal principles of UK law, which is extremely
rare in financial & tax matters.
Pursuant to the French Consumer Protection
Code, borrowers can apply for a 'repayment holiday' (deferred payment)
of up to 24 months if
they are suffering financial hardship. Where the mortgage in arrears is
less than
3,800 Euro, a simple Application, rather than a Summons, can be filed
with the
local Court.
This, if applicable, must be done prior to lenders formally issuing a
notice of foreclosure, i.e. that the borrower is defaulting on his/her
loan repayment
I'm wondering whether Mr Cordiez, or someone else, can explain the role of Credit Logement if we can't make our mortgage payments. When I purchased my apartment, I paid a significant amount (one-off payment) to subscribe to Credit Logement, but it's very difficult to find out exactly what they do.
If we can't make the monthly mortgage payments to the bank, does Credit Logement make the payments for us (as a kind of insurance), or does Credit Logement buy our complete debt from the bank and then we make arrangements with Credit Logement to pay off the debt?
Hi Clive,
Crédit Logement is an unlisted financial company held mainly by BNP Paribas, Crédit
Agricole, Crédit Lyonnais and Société Générale (each with 16,50%).
Credit logement offers guarantees to all major French lenders, to cover the credit risk attached to residential loans and avoid mortgage registration. Unlike standard mortgage charges, about 75% of the guarantee's costs is refundable on loan termination/repayment.
Crédit Logement provides guarantees in the form of collateral security. The guarantee is based on risk-pooling in the form of a
contribution by each borrower to the mutual guarantee fund. It could therefore be compared to a kind of co-operative form of insurance, but Credit Logement does not cover YOU against the risk of being in default through illness or loss of income or redundancy for example. It protects LENDERS against borrowers' insolvency beyond what is usually covered by 'disability & loss of employment' insurance policies.
So, Credit Logement does not make the payment of your behalf like a kind of insurance. Instead, Credit Logement discharges the lender and then makes arrangements with you to try & recoup its loss.
I hope the above makes sense!
Best regards,
Fabien
http://www.solicitor.fr
Thanks Fabien for the rapid response. So, if a property were to be repossessed and sold at auction, would this be done by Credit Logement rather than by the bank?
In all honesty, I must confess that I do not know!
I would need to search the issue (and inspect your contract with CL), but once the bank's mortgage is cleared by CL, these are subrogated and could most probably repossess the property, although I understand that, in practice, CL clearly favour a voluntary sale instead.
Dundee
eventually the bank will take possession and sell the property (if they get any buyers) and more than likely a loss will be realised. The bank will make a decision to pursue based on:
the amount of the debt
what assets you have
and whether there is a likelyhood to recover something.
In the end it's up to the bank to write off the debt and cut the losses or try to recover the amount owing.
Credit Logement do not automatically acquire a lien or pledge on defaulting borrower's French property, unless a specific Court Application is lodged in that respect.
Credit Logement's official policy consists in 'assisting' borrower with the (private) sale of their property. I have no doubt the company takes more forceful steps where borrowers fail to co-operate with them however.
Mary,
did you get any answer to your question - what happens if you just hand back the keys to the bank?
SClarke
Hi Stella,
Yes I did (see comments posted by my solicitor Fabian Cordiez on 8 May above).
I just wanted to check has anyone actually handed their keys back to their bank and if so, what has been the response. I can only think that this will become more prevelant as rents stop being paid, especially as we come into the winter months with little/no letting going on.
Dundee
In my opinion this is the last resort. No doubt like many of us you have invested a lot of your savings in this. Handing back the keys is allowing these unscrupulous people to win. What really irritates me is when I read forums on the legal issues pertaining to this, i.e. the law always favours the tenant, e.g. automatic right to renewal, compensation etc. Natural justice would dictate that the law should favour the party who keeps their side of the bargain and honours the legal document, i.e. the owner (he/she is the one who takes out a 20-25 year mortgage and invests life savings and is not a SARL (French PLC) who can decide to shut up shop at any time. If you read posts by people like mutley in this forum you will see how French law protects this disgraceful bahaviour. What surprises me is that a BBC watchdog-type programme has not gone to France to uncover this whole French leaseback issue where hundreds if not thousands of people are in this position.
The last post expresses my own concerns very well. In fact, I have written to the French Embassy in London and the British Embassy in Paris to complain about the difficulty French law puts us in regarding the VAT bill and compensation for which we become liable if we dare escape the unscrupulous management companies. I have had replies from neither. Perhaps this approach would be more effective if others were to do the same (there is an e-mail address for the British Embassy).
I have also thought of writing to the BBC Watchdog programme and/or the ITV Tonight programme (although, personally, I don't want to appear on TV). I think one way of getting co-operation from the French government would be to very publicly embarrass them into action through high-profile TV coverage. I would be interested to hear what others think of this idea - hopefully, some of you wouldn't be so camera-shy and would be prepared to participate. Please provide feedback.
In answer to the last post, I suggest we go one further and
set up a petition and send it to a European Union Body that
might be able to help with this situation.
It can't be right that these Management Companies can just
sell/pass on these Leasebacks without paying any money over
to the owners.
Hi guys, as my name has been mentioned I thought I would join in. I have to be very careful as to what I say on here as you will be very suprised as to who reads posts!!!
Knowing what I know now, if I was to have my time again I would quite simply fly over to France en mass drill the locks and stick two fingers up to them all. Do not messs around with lawyers and CDP. This is what they expect you to do. Get your property back and let them take you to court. By the time it goes to court the business will be insolvent, you will have your property back and be able to tee up a new management company if you want.
I have another lease back with rent due in March 2010 and I intend to make this a very very painful experience for the management company if they do not pay. Before I signed the lease I gave them every opportunity to back out. I quoted the gloomy world credit crunch, the terrible Euro exchange rate etc etc The residence is set in a golf course in a very small district in France.
Firstly I will buy a domain name that represents the management company and property and then set up a website. I will visit site and video what is going on and post it on the site. I will then contact all of the booking agents who use the residence and give them the domain name and ask for their comments so they can be posted on the site.
Believe it or not this is all perfectly legal IF you do it right.
If your best friend works for a massive tour operator such as "Ex....." then you can also push from that direction too.
Contact the local Police in writing and let them know exactly what you are doing and why. Do a leaflet drop to the local businesses and residences with the website address and keep them informed of what is going on and who is doing it. Make your position clear, do not make it personal but let them know how you are suffering.
Tourism and the tourism business is a very very fragile industry and can be damaged immensely. No major operator wants to be associated with crime, fraud and even worse put their clients in a position of disrepute. This is a major concern. Imagine an owner confronting a guest who is staying in their property and they are not getting paid. A tour operators nightmare.
Do not suffer quietly, suffer publicly and let everybody else suffer with you. If nobody visits the residence, nobody eats out, nobody rents a car, nobody visits the local points of interest, nobody puts money into the local economy.....I am sure you get the picture.
Keep it simple, keep it legal and keep it public.
Mutley
Changing the locks yourself would not be a good idea I am afraid.
Only a bailiff can arrange this, provided Judgment has first been entered in your favour, allowing you to do this and confirming that the lease is broken. Such a Judgment cannot be issued whilst the leaseback company is in Receivership or in Liquidation.
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
Member of the Law Society of England & Wales – n° 331485 - practising law as Avocat member of the French Bar Association
mccos40058.5295833333
Fabien
Thanks for the clarification. It just illustrates my point that the French legal system is structured to protect the party in the lease (i.e. the management company) who fails to meet the requirements of the lease and leaves the party who meets their requirements (i.e. the owner) in a situation where they can wait years to have any rent paid or repossess the property. This is not justice.
You are absolutely right: French law (the Decree of 30 September 1953) mostly protects tenants (the Management Company). With regards to leasebacks, the French Governement is considering changing the law to ensure that, in the future:
- Property developers become jointly and severally liable, with leaseback companies, for payment of the rent over a given period e.g. the first 3 years;
- Leaseback companies cannot break the lease every three years, as is often the case now (unless otherwise stated in the lease agreement);
I doubt the above suggested changes will actually suffice to protect leaseback investors though!
Thanks Fabien
This is further evidence to support Mutley's idea to inform potential investors of the actual facts pertaining to leasebacks. It is crazy that a country that prides itself on its legal system will actually treat mortgage holders who fulfill all of their requirements of their lease agreement in this way. You can be damn sure that if the French banks go before the legal system for a repossession for non-payment of mortgage payments (caused by non-payment of rent by French management companies) the judge will find in their favour. As the real truth starts to emerge this will damage the whole leaseback system for the French as would-be investors avoid leaseback like the plague. What could have been a win-win situation is now being slowly turned into a lose-lose situation.