French Real Estate and French Leaseback

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Welcome To
French Leaseback
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• The operator (tenant) waives the eviction
  compensation in the commercial lease, knowing
  that this waiver is not valid (not enforceable).
• The judges cancel the lease. The operator of the
  French leaseback property (tourist residence) is
  not entitled to an eviction indemnity (damages
  called in French indemnité déviction).
• The bad faith of the tenant, who drafted the
  commercial lease turns against him.
• This case law could be a huge step forward in the
  right of owners of a French leaseback property.

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Owners of a leaseback property bought a flats, a
parking place and a two ski storages in a
vacation building (residence of tourism in
French). The deal was funded by a bank loan. A
commercial lease is signed for 11 years with an
operator.
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The buyer of the French leaseback property signed
a leaseback contract with a operating company.
However only the tenant wrote the lease
contract. The waiver to an eviction indemnity
could only appear as a decisive element of the
deal. Most importantly, the buyer of the French
leaseback would (or might) not have signed the
contract. If their attention had not been
attracted by this financial interest, they might
not have contracted.
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the tenant is claiming a statute of limitation of
2 years to cancel the lease. However, the statute
of limitation of 2 years begin to run, when the
victim is informed. In this case, it is the date
of the registered mail addressed to the  owners
by the operating company.
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The claimants ask for the cancellation of the
buying reservation contract, selling contract,
the bank loan contract and the refund of the paid
interests. The plaintiffs based their damages
claim on the breach of the information and advice
duty/obligation.
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The purchaser benefits of a VAT refund, because
his deal is funding a new build in France. The
operating companies and/or the construction
company doesnt has to finance with costly bank
loans. The french tax agency does not collect VAT
on these sales. This tax cut comes from the
french law voted by the Parliament. The French
government wants to boost the real estate
industry.
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The leaseback scheme works around an operator,
who rents to tourists or students. The operating
company has to paid guaranteed rent. It means the
yearly rent is the same, even if the flat isnt
rented during the low-season. The leaseback
owners are supposed to be paid every year without
having to care about the daily business of the
tenant.
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The purchasers and future owners think themselves
as consumer. But under the French law, they are
more merchant and professional, regarding the
lease (and not the buying of the real estate).
So, the owner is a commercial lessor and the
lessee (tenant) is supposed to be the weak party,
like a consumer ! Yes, it is outrageous !
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Owners of a leaseback property, filed a claim
against the real estate agency specializing in
real estate leaseback investment. They claim the
real estate agent has a responsibility in the
default of the operating company of the tourist
residence or in the latent defects of
construction.
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The builder, the bank and the real estate agency
states it were risks that purchasers had to take
into account. The builder and seller of the
leaseback real estate The builder and seller of
the leaseback real estate is not liable. The
judges decide the company informed well the
buyers. The builder had not to advice regarding
the leaseback investment.
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For instance, if the lessee wants to renew the
lease, the owner cannot refuse without paying
damages (indemnite d eviction). The only way to
avoid paying damages is to prove a major breach
of contract by the tenant (operator). Some owners
were told they are free to terminate the lease
after 9 years. It isnt true. They can, but they
will have to pay some damages. (it can be between
10.000 to 30.000 or more)
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The bank funding the leaseback investment. The
owners of a leaseback property (residence of
tourism in French) claim the bank advices them to
invest in this leaseback scheme. It is based on
an email stating a meeting with the manager of
the banks real estate investments department. It
is not enough for the court. According to the
judges, there is no evidence the bank was the
first to advice this leaseback investment to the
buyers. The court convicts the real estate agency
specializing in leaseback in France.
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A debtor shall be ordered to pay damages, in the
proper circumstance, either on account of the
non-performance of the obligation, or on account
of the delay in performing, whenever he cannot
establish that the non-performance was due to an
external cause that cannot be imputed to him
provided, moreover, there is no bad faith on his
part.
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For More Update Visite The Website
https//frenchrealestatelaw-traesch.fr/leaseback-i
ndemnite-eviction
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THANK YOU
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