English
FrançaisI was forced in to agreeing to take lower rent last year for my apartment and was just sent a 2 page piece of paper written in English saying the rent would now be 35% lower which I was to sign and send back to the Management Company . It also said that the rest of the lease would remain the same . Does anyone know if this piece of paper could be legal or not as all the other lease papers etc., are in French and nothing in English . I cannot find an Irish Solicitor to tell me if it is legal or not ?
Thanks
carol
Carol
Who was your management company
At what lenth of time passed before the rent dropped ie 9-11years
Have they paid on time
Also where u hit with a refirb bill
John
To the best of my knowledge it is not legal unless it is in French. My advice to people is not to sign any new offer of rent reduction. Make contact with all the other owners and form a group and act together. If the majority don't sign a new lease with a reduced rent than the company have less power. This is the typical leasback scam, pay rent for a while and then offer a reduced rent. Why would you sign something of this importance without getting legal advice? A French solicitor will tell you what is legally binding in France. I am 99.99% sure that this is not legally binding, but ask a French solicitor for confirmation.
Thanks . Yes was mad to sign it but a number of people did and I though it was better to get rent less 35% than no rent at all and could not continue to pay the mortgage so needed the money . I am VERY HAPPY it is not legal and hope it is not legal .
My management company is Residhotel . They did pay the correct rent for about 6 years with no increase but HUGE service charge bills . It turned out to be their own company that was running the service company too so they screwed us for all kinds of everything until so how we manged to get them out .....not sure how ??? Then after that they stopped paying rent or paid a bit now and then and I had to keep up the mortgage payments which was crippling . A big group of the French did join together and have been trying to fight them for the past 2 years but as far as I know they folded the Residhotel company and set up another company and then sent me the letter asking me to sign to say I accept 35 % less rent . I felt I had no choice but to sign. I did not join with the big French group as they never answered any question that I asked them and did not seem to know what they were doing (or maybe they did but I am so removed from it ) and it was all in French or English nobody could understand . I did try 3 Solicitors in Ireland but none of them dealt with French law and I am still waiting on 2 that do deal with French law to call me . I do not know any French Solicitors and I need one that I can understand ......does anyone out there know one ?
I was told by the Residhotel secretary that the rent reduction was only until the first 9 years were up in June 2016 but she now tells me that the management company want to go on for another 9 years and I have no say in it and I have to accept this but if that document is not legal than I don't know how she can say that ?
I feel I would like to join with the big French group but not sure if it is too late for that now that I have signed that document and they have not . They are still getting the higher rent but in bits and pieces and way behind the due date .
Any advice ?
carol
Carol,
I sent you a pm regarding a solicitor.
My first mistake was buying a French leaseback.
My second mistake was signing a second lease agreement. This had a) a 50% rent reduction and b) a 50% increase in 'maintenance charge' to be paid out of the rent before I say any of it.
This 'maintenance' charge, it turns out is not being used to pay the 'common area' Syndic fees - it's just kept by the operator (Docte Gestio). So I have to pay the Syndic fees.
And there were another 110 or so owners who signed this lease. With what I know now, it was a major mistake to sign a lease with reduced rent.
As we've seen on the forum, nobody was advised as to the real nature of a Bail Commercial, and how it favours the tenant. I thought I would have the house back after 9 years and the mortgage paid off.
That is what the developer intentionally wanted me to believe.
Yes Sinéad that is why it is vital that people communicate here on the forum. It is an excellent resource and people should use it before they sign anything or take a next step. We point blank refused a 50% reduction. We had Irish and French owners in a small aparthotel on the Cote d'Azur. We all agreed that a50% reduction made the 'investment' unjustifiable and we collectively sent a CDP to the company. They eventually paid up but then defaulted again. We sent a CDP again and when they failed to pay we forced them into liquidation. We then had our leases cancelled by the Receiver. We then had hairy moments with no management company willing to pay us rent that we wanted. We had started the process of looking to manage ourselves and having the status of the building redesignated from residence de Tourisme to standard freehold when a property investor made all owners an offer to buy the whole building. We were SO fortunate. Our fight to have the building redesignated would have probably taken 2 years with the local council. Luckily, an onwner of a number of apartments was a French business man well versed in the way the French do things. We made a 10% loss on the purchase price, but we made up for that by not having estate agents fees. I had many sleepless nights over this. However, I cannot forget the way I was treated by these French crooks and for that reason I am willing to help anyone I can on this forum as I know the impact it can have on health and family life.
It is the fear that owners will be left with no leases, and therefore lose the leaseback status, and therefore will have to re-pay the 19% VAT which they didn't have to pay on the purchase because it was a leaseback, that led most to sign new lease agreements.
The 19% is significant when you realise how inflated the purchase prices were. And remember they were inflated mainly due to the mis-selling on 'guaranteed' rent and general mis-information or lack of information on the nature of a Bail Commercial. I don't know many who would have bought if they realised that the 'guaranteed' rent was not in fact guaranteed by anything. Nor that you could face compensation charges if you didn't renew the lease at the end of the 9 years. Etc.
Information on the whole area is sparse, conflicting and unclear. It was in the developers interests to keep it this way. It was also in the agents interests. And that applies to all those companies who were involved in selling them in Ireland, including Douglas Newman Good, Ouicando, etc etc.
In the case of my resort, there were a number of owners who grouped together to get legal and financial advice when the developer (who was also the operator) claimed he would go out of business if we did not agree to a reduced rent. The outcome of the advice was to sign a new lease. In hindsight this 'advice' was all very odd and led to allegations of conflict of interest amongst owners advising in that they had connections to persons involved in selling the properties!
Who to trust !
So, yes I agree with you that information should be shared, and then at least there's a starting point to try and make informed decisions.
It appears to be the case that a lease will continue unless the owner specifically informs the leaseholder that it is not. Then compensation can be demanded. This could be up to 2 years the turnover of the leaseholder on the property (when they rent the property out at €1200/wk this could be huge). It is not clear at all on how this can be challenged and appears to be up to a French judge - so you take your chances I guess.
See the French Notaire website for details on a Commercial Lease (Bail Commercial): http://www.notaires.fr/en/commercial-lease
There are also some other helpful documents in English on the site : http://www.notaires.fr/en/fiche-pratique/3
Regarding the situation of being left without a lease, it seems that you can rent out the property yourself if you provide 3 of the 4 requirements. It seems that once you are chargin VAT on the rental and returning this to the French revenue then all is ok. But it is not clear.
For my part, I believe that getting out of the lease is imperative (rather than signing any new one - reduced rent or not). In my resort, there is legal case ongoing (well there are many different ones) between the current operator and the original developer because the developer still owns the main building with the reception/restaurant/pool and the operator has not paid rent for it! You couldn't make it up.
Yes, but if you accept a 50% reduction in rent in perpetuity then you will lose far more over the long term that you would pay back in VAT. The 50% is a scam. The management companies do all their accounts with their 'expert accountants' and always come up with the same magical number 50%. By the way each leasholder has an individual lease and you cannot be bound to do what others do, if you are 1 out of 100 that doesn't accept the 50% reduction you can still insist on the original rent or have the lease cancelled due to non-payment of rent.