French Court de Cassation rules in favour of leaseback owner

The purchaser of a French leaseback property, in believing that he was deceived at the time of purchase, took a legal action in France against the promoter and his commercial partners in the sale. The owner lost the initial action and the Court of Appeal at Aix-en-Provence subsequently also ruled against the owner. However, on September 4th 2020 the Court de Cassation overruled this Court of Appeal judgement and found that the

Following the judicial liquidation of the first tenant (the initial operator of the tourist residence), the investor had to accept a reduction in rents in order to retain the benefit of the tax exemption.

The Court of Appeal had ruled on the one hand that the commercial brochure provided to the buyer indicated “only that profitability was ensured by the fact that the investor will take out a firm lease of eleven years with the operating company” , so that she had committed no fraud.

The Court of Cassation rejected this interpretation and quashed the judgment of the Court of Appeal on the grounds that it should have sought ”  if the commercial brochure did not present the investment as having guaranteed profitability”.

Read more at https://vaubecour-avocats.com/2020/11/05/achat-en-residence-de-tourisme-devoir-dinformation-sur-lalea-locatif/

See the judgement at https://www.legifrance.gouv.fr/juri/id/JURITEXT000042397923


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