English
FrançaisI have been told that MGM/CGH are now introducing penalty clauses into their leases whereby if you don't renew at the end of the 11 years (where the "loi montagne" requires 18 year leases) you have to pay the equivalent of 2 years rental turnover in compensation to CGH . I have queried this on the basis the "loi montagne" of the local Marie is to continue to commercially rent out the property for a further 7 years (to discourage second home owners leaving them empty and this affecting the commerciality of the resort)- it doesn't as far as I am aware say you have to continue to rent it out through the same management company and pay them compensation if you don't.
Has anyone else knowledge of this? or what actually happens at the end of the 11 year lease?
Surely someone out there has reached the end of their 11 year lease in France. What actually happens if you don't renew other than the repayment of a proportion of VAT? do you get sued for compensation by the management company?
Axed
I had a lengthy and somewhat bad tempered (me not her)
conversation with the P&V sales rep in Les Carroz. If you can believe
what she says then the situation is as follows.
If you signed before 2004 (I didn't ask the exact date) then they
cannot demand compensation if you do not renew. If you signed after
2004 then they can and will demand compensation.
If you do renew the lease they will attempt to charge you for
refurbishment costs. This is regardless of when you signed. Each
residence will be treated as an individual case depending in how much
they want to hold onto it.
I wonder what the implications of implied contractual terms are in France and consumer mis -selling. Certainly with MGM their apartments were sold on the basis that (and if you read their website still do imply that) the lease ends after 11 years and after that you can do what you want. Even if you are required by the local Marie to continue to lease for another 7 years it does not have to be through the same lessee as the first 11 years.
Personally I think the important point is to serve notice ending the lease in line with the contractual terms of the lease (if that is what one wants to do) and then sit and wait for them to sue when you refuse to renew. Let's see what the courts have to say about all this!
The apartments were certainly mid-sold. We were told that at the end
of the lease the apartment would be returned in perfect condition and
that we could choose to renew the lease, sell or take full possession.
We were also told that we could use it out of season (which we can't).
How it will all end up I don't know, I am hoping there will be a few
court cases soon.
I am sure as a number of the leases with companies like CGH (a subsidiary of MGM) come to an end we will see some action in court. I know a large number of the residences have formed owners associations where the owners work together to resolve lease issues with the management ompany/lessee
Morning All, I am trying to sell my apartment in Tignes and in the process
discovered the French Law of Eviction indemnity. This is where the tenant,
in my case Pierre et Vacances who took over the MGM lease I signed up to
in 2001, can claim compensation. This was total news. I agree that MGM
missold as none of their marketing at the time disclosed this. Even more
laughably, when I contacted my UK solicitor who assisted me with the
purchase in 2001, they said they didnt alert me to the issue as MGM were
not in the practice of invoking their rights to indemnity......that's another
story. I am still trying to clarify whether they do have right to
compensation though as I am reading that leases signed up to before
2004 may not have that obligation. Does anyone know? Big tip in case
you are not aware; if you wish NOT to renew with P&V, you must tell them
9 months before your lease renewal otherwise it rolls over.
I was also told by MGM that they do not invoke the statutory compensation right. This whole aspect raises the issue of when the lease could end at all without one having to pay compensation, as presumably the compensation right would be attached to the renewed lease as well - so query how an owner can ever actually "own" and use their apartment as they want which is the basis on which they are sold.
I met the Pierre et Vacances sales woman in Les Carroz and she
assured me that leases signed prior to 2004 were not bound to pay
compensation. However given all that has gone on she could well
have been lying. May I suggest you e mail her at
mvauthay@fr.groupepvcp.com and see what story you get. Her name
is Marion Vauthay.
Prior to meeting her this month I had been given to believe that the
compensation would apply in my case.
I was told you had to inform them one year in advance if you were not
renewing. Just something to be aware of. Obviously it may be wise to
give as much notice as possible.
Hi the amount of time you have to inform them should be set out in your
lease. Mine said 9 months from the date it was given residence de tourisme
status and this date was not described in the lease itself, so I had to contact
them to check it. If your lease is anything similar to mine, I suggest you
contact PV formally and get the date in writing from them of your lease
expiry and then count back from there.
Axed, What does your lease say? That's the agreement you signed. If it doesn't say you will have to pay compensation if you terminate after 11 years then I don't see how they can make you pay.
Oo err just found this: Loi Montagne(Version in force since 21 September 2000)Article L145-14
Le bailleur peut refuser le renouvellement du bail. Toutefois, le bailleur doit, sauf exceptions prévues aux articles L. 145-17 et suivants, payer au locataire évincé une indemnité dite d'éviction égale au préjudice causé par le défaut de renouvellement.
Cette indemnité comprend notamment la valeur marchande du fonds de commerce, déterminée suivant les usages de la profession, augmentée éventuellement des frais normaux de déménagement et de réinstallation, ainsi que des frais et droits de mutation à payer pour un fonds de même valeur, sauf dans le cas où le propriétaire fait la preuve que le préjudice est moindre.
So maybe they do have the right to demand compensation even if it does not specifically say so in your lease as it appears to be enshrined in law to protect tenants