English
FrançaisI have read several previous posts here. If I have understood correctly, it would seem that if the management company tried to impose a rent reduction, it would be the ideal situation for me.
I bought a leaseback in 2016.
- I have no mortgage
- will in 3 years time have the resources to pay the remaining pro rata VAT
- Will retire (hopefully in 6 years) and would then like the opportunity to occupy my appartment even more during the winter
Not agreeing with a proposed rent decrease would give me the opportunity to pull out of the agreement without having to pay compensation?
I went into the leaseback scheme understanding pretty much how it works and up till now am enjoying my property rights. Sainte Foy has a season shorter than the local mega resorts, which means that I can utilise 'out of season' weeks (with an administration fee) to ski the local already/still open mega resorts, ski the Tignes glacier in the autumn and alpine hiking in june and september. My rental income is now used for paying for my holidays and have no issues with the management company YET.
Can not agreeing to pay for a requested overhaul of the appartment after 9year lease contract ends also be a valid reason for not renewing my lease without penalty?
Am I missing something?
From what I understand refusing a rent reduction or refusing or to pay for a refurbishment are not legal valid reasons for you to terminate the contract.
To clarify...
If your tenant makes a reasonable request for a rent reduction and the court agrees it is reasonable then you are scuppered. But what is "reasonable" ?
There are many factors but the main one is usually a reference to a recognised national commercial index. Local factors can also come into play (e.g.- in your case perhaps complete lakc of snow all winter, so no clients,no income. That's an extreme example). Or, if a tenat can prove that all competing hotels/accommodation centres in the area are paying the owners far less rent then that may be a factor.
It's more complicated than that - but a refusal to agree a "reasonable" new rent is not grounds for you to cancel the contract.
Even a 50% reduction can be reasonable if that is what is the normal rent by local and national standards. the fact the drop is horrible is not grounds for cancelling if the tenant can show the court that the new rent is in accordance with the norm.
And certainly you have to renew the furniture andor apt/villa if it needs renewing - just like a landlord anywhere.
I'm painting the worst case scenario and am not being entirely accurate ,which would require too much detail ,but basically you can't just refuse to renew a contract without the possibility of acostly legal action from the tenant.
To be on the safe side check out what are similar rents in your area.
Reading my own comment I feel I should add...
I don't know if any tenant-company has actually succeeded in court in securing the crazy demand of ,say,50% . If companies have succeeded in getting a reduction of 50% it's usually (AFAIK) because owners didnt fight back . Indeed when they did fight back the companies either reduced their demand or even went broke.
I was just pointing out that in French commercial law the tenant has the right to renew a lease and at terms that are "reasonable". An owner's refusal to renew a lease could entitle the tenant to compensation.
Thanks for the clarification Nick.
still a long time to go on the current contract. Will just continue enjoying my appartment for the time being.
There will be many other owners in my building who will need to renew leases a few years before mine is due.
It will be interesting to see how they get on
It'd be good to find out from other owners whose lease ends earliest so that you can ascertain what the tenant is seeking for the renewed lease (rent, refurb costs etc). If owners accept what the tenant wants then it may weaken your case for refusing to renew the lease. Good luck.