A recent article in Indo – The French Dream that became a Nightmare – goes some way to highlighting the problems with French leasebacks and I commend the journalist Sinead Ryan for taking this on.
But it doesn’t go far enough.
Perhaps those selling French leaseback/investment properties should be subject to financial regulation.
From the Central Bank:
the Central Bank of Ireland has no role in regulating the property sector or property investments
After all, these entities are advising and selling leaseback investments which can put the purchasers family home in Ireland at risk if the mortgage cannot be paid.
Rather serious, n’est pa?
What other entity selling investments is not regulated ?
The journalist also quotes the same ‘leaseback expert’, Annette Mink of FP Investments, in a separate Independent.ie news article.
It would be interesting, and I suggest more in the interests of it’s readers, if the balancing ‘positive’ view was taken from an independent source and not someone not involved in the sale of these leased properties.
Pierre et Vacances Leasebacks
As for Pierre et Vacances being the problem free player in all this:
We’ve had no problems with the likes of Pierre and Vacances
There appears to be some evidence to the contrary over on frenchleaseback.net. One poster claims that Pierre et Vacances are demanding eviction compensation of 3 years gross rental income in eviction compensation (Indemnité d’éviction d’un bail commercial)!
This poster was under the impression the property was his at the end of the lease period. As many others did.
A quick perusal of the Pierre et Vacances website yields no mention of eviction compensation. Though, in fairness, they do tell you that you will be paying for refurbishment.
At the end of the lease, the Group will offer you a new contract, to continue the management of your property. When the lease is renewed, renovation work is carried out to maintain the value of your asset so you will be assured that it will meet the needs and expectations of the tourist clientele. Your financial responsibility for such works is capped, in existing leases, at 6% of the purchase value of the property yearly indexed on the Building Cost Index, limited to 2%.
Do the numbers stack up ?
Bear in mind that it’s 6% of ‘purchase price’, not the value of the property now. Combine that with yearly indexation increases and you could be looking at a whopping bill!
See the French government site for more on eviction compensation.
Read more on eviction compensation.
Would the journalist care to comment ??