We are close to ending, but as yet we have not heard a thing from Odalys. we have emailed several Odalys contacts asking for info, but had nothing back. We have only just (last week) received the rental income for the 2nd quarter of 2013!!!!!.... Lastest payment yet!!!
Hi in last quarter of lease with Odalys in plan de la tour. They offered 25% reduction for new lease on a take it or leave it basis. Most people accepted it. Waiting to hear now if they will had no choice but to carry on in this residence which was very popular and full most of the time. Waiting to hear from them now. Worried but happy that we will find someone to take over the management if Odalys drop out.
The issue of French business leases' renewal is a complex one!
Leases usually set a minimum period of time for either party to serve a notice to the other side, informing such other party that rental shall not be renewed beyond the contractually-agreed term. The notice document is called 'congé' in French legal jargon. It usually is to be served by means of bailiff service, no less than 6 or 12 months prior to the lease's term.
The relevant general statutory principles governing French business leases allow Lessors (owners) to serve a termination/ non-renewal notice when the lease comes up for renewal i.e. for the lease's term. Until 2010, Lessees (leaseback companies) could opt out from the lease, by serving on Lessors a non-renewal notice. Many lease agreements even used to allow leaseback companies to walk away from the lease every 3 years. The French government introduced legislative changes in 2010, through the Novelli Act 2009. As a result leaseback companies can no longer break the lease every 3 years. The new rules only applies to those lease which were executed after 2009 though.
There are of course VAT implications for owners when a lease does not get renewed and, as a result, the property has been managed as a leaseback for less than 20 years.
French leasebacks' lease agreements often include a clause which states that, unless one party serves a termination notice, the agreement will be renewed on the same terms over the same period of time - usually 9 or 11 years. Special attention must be paid to the situation where the lease is silent about the renewed lease's T&Cs. In such a case it can be adavantageous for French leaseback owners to notify the leaseback company their intention to renew the lease over a similar period of time and under the same terms as those initially agreed.
Common pitfalls include service of a renewal or non-renewal notice by Lessors by first class mail, or (even worse) by email. The document must of course be in French and should refer to the relevant legal statutes. As previously mentionned, notices usually are to be served through a bailiff. Another major issue is: - What will the new or renewed lease's conditions be, e.g. will rents be kept to their original level? Renewal of French commercial leases is a minefiled. Leaseback owners should not leave the issue entirely in the hands of unscrupulous management companies. It is advisable to review what the 'bail commercial' (lease) states and consider what options are available to investors, well ahead of the lease's term.
The above obviously is general guidance and does not amount to legal advice!
Odalys have advised that they will not be renewing the lease. It looks like they will keep the place open until the end of the coming season and we are on our own then
The reason given was that not enough owners signed the new lease (with the 25%) reduction to make running the place viable.
We will probably never know the full story and all sorts of issues to be addressed in the coming months
Its likely they will do similar in other locations
I want to know whether a management company can enforce it's alleged right to compensation if the owner decides not to renew the lease at the end of the lease term? It was made very clear to us and in the sales details that at the end of 11 years we could renew the lease or walk away (with the consequence of course of some repayment of TVA) but I now understand that the management company has a statutory right to compensation of approx 2 years rent if the owner doesn't renew.
Is anyone aware of this right being enforced anywhere?
Yes you are right, you cannot decide to not renew the lease without compensation which can be up to 2 years' turnover, most of the time there is a negotiation with the management company, if it is a recent residence they are reluctant to let it go, if it is after 15 or 20 years then it becomes easier to find a good agreement (and you will have to pay back the prorata of the VAT that you got back at the delivery).
Are you saying that compensation is payable after the first term even if the correct legal notices not to renew are served? I understood that as long as the correct procedure was followed you could terminate the lease at the end of 9 years with no compensation.
English
Français
We are close to ending, but as yet we have not heard a thing from Odalys. we have emailed several Odalys contacts asking for info, but had nothing back. We have only just (last week) received the rental income for the 2nd quarter of 2013!!!!!.... Lastest payment yet!!!
Hi in last quarter of lease with Odalys in plan de la tour. They offered 25% reduction for new lease on a take it or leave it basis. Most people accepted it. Waiting to hear now if they will had no choice but to carry on in this residence which was very popular and full most of the time. Waiting to hear from them now. Worried but happy that we will find someone to take over the management if Odalys drop out.
Woody
Hi,I have gone past the end of first contract,and my understanding is that the agreement continues tentitivly on a year to
year basis,according to my contract,My 3rd qurt.payment is a month late,and this is the first time i cant reach them by phone.
My place is in Les berge du canal
not sure if you read elsewhere, but we only recently recieved our 2nd quarter payment for the same residence!!
The issue of French business leases' renewal is a complex one!
Leases usually set a minimum period of time for either party to serve a notice to the other side, informing such other party that rental shall not be renewed beyond the contractually-agreed term. The notice document is called 'congé' in French legal jargon. It usually is to be served by means of bailiff service, no less than 6 or 12 months prior to the lease's term.
The relevant general statutory principles governing French business leases allow Lessors (owners) to serve a termination/ non-renewal notice when the lease comes up for renewal i.e. for the lease's term. Until 2010, Lessees (leaseback companies) could opt out from the lease, by serving on Lessors a non-renewal notice. Many lease agreements even used to allow leaseback companies to walk away from the lease every 3 years. The French government introduced legislative changes in 2010, through the Novelli Act 2009. As a result leaseback companies can no longer break the lease every 3 years. The new rules only applies to those lease which were executed after 2009 though.
There are of course VAT implications for owners when a lease does not get renewed and, as a result, the property has been managed as a leaseback for less than 20 years.
French leasebacks' lease agreements often include a clause which states that, unless one party serves a termination notice, the agreement will be renewed on the same terms over the same period of time - usually 9 or 11 years. Special attention must be paid to the situation where the lease is silent about the renewed lease's T&Cs. In such a case it can be adavantageous for French leaseback owners to notify the leaseback company their intention to renew the lease over a similar period of time and under the same terms as those initially agreed.
Common pitfalls include service of a renewal or non-renewal notice by Lessors by first class mail, or (even worse) by email. The document must of course be in French and should refer to the relevant legal statutes. As previously mentionned, notices usually are to be served through a bailiff. Another major issue is: - What will the new or renewed lease's conditions be, e.g. will rents be kept to their original level? Renewal of French commercial leases is a minefiled. Leaseback owners should not leave the issue entirely in the hands of unscrupulous management companies. It is advisable to review what the 'bail commercial' (lease) states and consider what options are available to investors, well ahead of the lease's term.
The above obviously is general guidance and does not amount to legal advice!
next to impossible to make a profit on a lease back,as the price is very closely linked to the rent return,
i sold and got my money back just,but was in a great development on the sea frony with a good management co
best of luck with it,but i have had a bad experience as well
Hi
just to update on our situation
Odalys have advised that they will not be renewing the lease. It looks like they will keep the place open until the end of the coming season and we are on our own then
The reason given was that not enough owners signed the new lease (with the 25%) reduction to make running the place viable.
We will probably never know the full story and all sorts of issues to be addressed in the coming months
Its likely they will do similar in other locations
D
I want to know whether a management company can enforce it's alleged right to compensation if the owner decides not to renew the lease at the end of the lease term? It was made very clear to us and in the sales details that at the end of 11 years we could renew the lease or walk away (with the consequence of course of some repayment of TVA) but I now understand that the management company has a statutory right to compensation of approx 2 years rent if the owner doesn't renew.
Is anyone aware of this right being enforced anywhere?
Hi Axed,
Yes you are right, you cannot decide to not renew the lease without compensation which can be up to 2 years' turnover, most of the time there is a negotiation with the management company, if it is a recent residence they are reluctant to let it go, if it is after 15 or 20 years then it becomes easier to find a good agreement (and you will have to pay back the prorata of the VAT that you got back at the delivery).
Matt
Sextant
Are you saying that compensation is payable after the first term even if the correct legal notices not to renew are served? I understood that as long as the correct procedure was followed you could terminate the lease at the end of 9 years with no compensation.
thanks
Hi all,
Just have a question If the orginal lease is in the name of the first management company,
then it is taken over by a new company and there is no new lease to be signed as they don't give one.
On the old lease there is now no mention of the new lease who actually are you with management wise
or are they in breach because they haven't done a new lease.
sounds a bit mix up as I don't want to name the companies.
also if the original lease is still the legal documant can the new company enforce change.
Would this be good grounds to get out of the lease. Oh yes and the rental is always late.
Any info would be interesting.
thank you