Update 31 July 2017
The CCPC have confirmed to Brian Hayes that they have carried out a detailed assessment of the complaints they have received. They have engaged with their French counterpart, the DGCCRF. In mid July, they passed details of the complaints to the DGCCRF so that they can investigate at a national level and see if the complaints concern infringements that fall within their remit. We know however that the DGCCRF are already aware of these issues.
The CCPC (Fergal O’Leary, member of the commission) have concluded the following:
..cross-border leaseback property investments are extremely complex products which do not currently fit neatly into the remit of any one organisation. In order to avoid further problems in this area it may be appropriate to consider and potentially enhance the protections currently available to EU consumers.
We view this update positively. It seems that the CCPC understand that there are issues and consider that greater or more specific EU consumer protection may be required. The DGCCRF investigation is on-going.
Update 16 June 2017
For details on how to submit your complaint to the CCPC see this post.
The CCPC (Competition and Consumer Protection Commission) are in the process of investigating complaints from Irish consumers on the mis-selling of French leaseback properties.
They have made an initial response and have made contact with their French counterpart authority, the DGCCRF, Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes. The CCPC has briefly outlined to the DGCCRF, the issues that owners have been brought to their attention.
The DGCCRF, have indicated to us that they are aware of French consumers and owners of such tourism properties being harmed by the commercial practices of some professionals working in this area. The CCPC has advised the French authorities that the harm from these commercial practices is not limited to French consumers. The CCPC has explained that Irish citizens, also appear to have been harmed by commercial practices in the area of tourist property investment.
It seems that the DGCCRF have committed to undertaking investigations and appropriate enforcement actions during 2017 in relation to the alleged unfair commercial practices related to these tourist investment type properties. The CCPC is preparing documentation provided by the owners who submitted complaints for submission to their French colleagues.
We are following up with the CCPC to get a better understanding of the options and next steps.
We have also highlighted to the CCPC that we believe the DGCCRF have been aware of these issues for some years now.
According to the FNAPRT (Fédération Nationale des Associations des Propriétaires de Résidences de Tourisme), representatives of the DGCCRF were at a meeting with the FNAPRT in 1 Dec 2015 (see http://www.fnaprt.com/des-avancees-sur-les-informations-fournir-aux-investisseurs/) and on 29 Jan 2016, where the specific mis-selling issue on eviction compensation was discussed amongst other things (see https://mdenoune.com/2016/02/15/les-derives-des-baux-commerciaux/ ) and also 21 July 2016 (see http://www.fnaprt.com/la-fnaprt-presente-dans-les-groupes-de-travail-au-ministere/).
The FNAPRT is an organisation of French owners of properties in these ‘tourist residence’ property developments.
The DGCCRF have recently published details relating to a survey they carried out to monitor compliance with the applicable rules and to assess the state of play of the investment market in tourist residences in France, ensuring the fairness of the information given to individuals wishing to invest in this market.
In 2014, France had 2,266 tourist residences representing a total of 183,143 apartments.
The DGCCRF site states that there are 3 main requirements to the classification of a ‘résidence de tourisme’ site:
- a minimum of 100 beds
- a minimum of 70% of the residences for residences under the co-ownership status for a minimum of nine years
- be managed by a single physical or moral operator
It indicates that a minimum of 70% of the properties must be leased. There appears to have been a change in the law in 2015, which means that only 55% must be leased after 9 years to retain this status. Though between Google and myself, there may be something lost in translation..
Once again, NONE of this was communicated to purchasers, by any of the parties involved in the purchase, at any stage of the purchase. This restrictions of this ‘résidence de tourisme’ aspect of the property was something that was unknown to purchasers, certainly to those outside France.
The information outlined on the DGCCRF website does not refer to the EU Directives for consumer protection, Directive 2005/29/EC on unfair business-to-consumer commercial practices (the UCPD) and Directive 93/13/EEC on Unfair Terms in Consumer Contracts (the UCTD) protects consumers against unfair contract terms. Under Article 6 of this Directive, MS shall lay down that unfair terms in a consumer contract shall not be binding on the consumer.
It also does not mention that the ‘commercial lease’ is not limited to the 9 years of the lease signed. It seems surprising that this did not give rise to complaints…
The conclusion from the DGCCRF in this piece seems to be that the regulation may need to be tightened, and they have set up a working group. However, it mentions that this working group is with ‘the professionals’. As owners know only too well, the vested interests of all of the ‘professionals’ involved, from developers to notaires, to banks, to operators, have all conspired to leave owners trapped in an investment worth a fraction of what they paid for it and facing constant payment demands for everything from the rubbish charges to the mortgage repayments on these properties !
Ces réflexions pourront se poursuivre, avec les professionnels, au sein d’un groupe de travail mis en place par la Direction générale des entreprises (DGE) en coordination avec la DGCCRF.
This would suggest a very ‘light touch’ regulatory approach.
We hope that the ‘consumer’ is at the table.
We have every confidence that the CCPC will act to protect the rights of Irish consumers and use the EU laws set up to support the free trade project.