Hi, I have just joined . Would love to get more information about lease renewal and the pros and cons of selling a leaseback property. Would be great to get all the co-owners singing off the same hymn sheet.
Hi all, Apologies for the delay in responding, I haven't been active on this forum in a while and have not checked emails on the account I used to set it up in some time.
I'm sure you've read the horrific experiences many people have had with leasebacks so to date we have been lucky that our operator has paid in full and on time. The difficulty I have with the scheme is there is no clearly defined exit strategy.
You may know already that the first lease is due to expire in February 2018. Around this time last year we heard that the operator Vacances Bleues (VB) were interested in renewing the lease but with some changes, the main relevant change here was a proposal to reduce the rent. Around that time several of us were trying to find other co-owners and a French co-owner managed to get a list of quite a lot of parties and we exchanged emails.
A few co-owners attended last year's AGM where VB confirmed they would be seeking a rent reduction but no confirmation of the level of reduction. In March they informed a number of owners, mostly French, that they would not be renewing their lease, which depending on your intentions could be a good or a bad outcome. I believe most of those owners are interested in signing a new lease, either with the current operator or a new operator depending on what deals are on the table.
In terms of the level of rent decrease I have heard the figure of 15% to 25% being mentioned but have no concrete evidence if either of these figures are in any way accurate. My impression is that most co-owners would like to renew the lease with VB if the conditions don't change drastically.
I would have expected to hear from VB by now as if neither party cancels the lease automatically renews under the same conditions (and rent) as the first lease. I have several emails that I can share with you if anyone is interested just let me know and I will forward on by mail as it's too much to post here.
Received registered letter yesterday titled "Application for Renewal of Lease". Rent reduced by approx 30%. Property doesn't wash its face anymore and I'll need to supplemnt it by approx. €200 per month. New lease is for 9 years
I'm considering my options
1) Renegotiate my french mortgage if possible ...its fixed for 20 years...about 7years remaining.
2) Negotiate with leasee Vacances Bleues for improved terms ...is this possible ?
3) Sell my property
I'm also wondering if we will incur a refurbishment cost for furniture for the property ..and if so how much this my cost.
The letter received was quite official and i am required to reply in the next 3 months.
The same letter is being received by many owners at the moment.
To summarise:
1. Some owners leases have been cancelled which means VB are not renewing and the owners must decide what to do next.
2. Some owners have received renewals with various decreases, for the French owners it seems these decreases are in the range of 10% to 20%. For foreign owners it appears to be around 30%. From speaking to one French owner he does feel that this is playing on the fear of foreign owners that they do not have a choice.
There is an email distribution list in place, I will forward it to you and would encourage you to reply to all with your experience so we can gauge how many people are in the same situation.
You have a choice but it depends on what you want. The proposed lease is only legal if you sign it. If you do not the mgt company has to honour the 1st lease. If they are having cashflow problems (which is likely) they may pay rent later and later (or not at all). If that happens you can serve a CDP (on this site £50) - if they do not pay rent following that you can break the lease without paying compensation and then your apartment will become "normal". If you accept the new lease and then try to sell it will significantly affect the sale price. Out of lease it is much more valuable and you can avoid repaying the pro-rata TVA by continuing to short term let it offering 3 of the leaseback services.
Another note if you refuse to sign. The mgt company can it some stage appeal to the french courts to force you to accept the proposed lease but they must prove to the french courts that the new rent is justified.
Hi, I also received a notice that Vacances Bleues Hotels wanted to renew the leaseback. It was for a 12 year term (not 9 years as per the original purchase agreeement) and at a 30% reduction in rents (which will not cover my mortgage P&I payment). I wrote back to VB and their legal representative rejecting the terms of the contract but willing to discuss different terms. Not sure where this is going to go. I may end up just paying off the balance of the principle and keeping this for my own use (including private rental).
You will not be able to use the apartment unless the lease is broken, if you break the lease VB will seek an indemnity eviction as compensation. I have been told this will be 2 approximately two years turnover divided by your 'co ownership shares' (fraction of complex that you own). If VB break the lease no compensation will need to be paid.
The approach many of us are taking is to accept the renewal but under the existing conditions i.e. no reduction - this puts the onus on VB to negotiate or walk away, if no agreement is reached they must continue to abide by the terms of the initial lease. There is potential for them to go to court to pursue a judgement forcing owners to pay the reduced rent but they need to back this up with evidence that the reduction is justified and in the meantime they need to pay the full rent.
We are in contact as a group via email, I'm happy to add you to the list if you want to PM me.
Hi Bez, thank you for the information. So even after the contract has expired, and if VB and I cannot enter into an agreement on terms to renew the leaseback (ie: they walk away), I still cannot use my apartment for 2 years?
Yes, I am interested in becoming a member of the VB/Divonne les Bains group. I'll send a PM shortly.
I'm in the same boat as you are in relation to the lease renewal at Villa Du Lac. I'm a little behind the ball and wondered what you have done if anything. I'd appreciate any advice you could offer.
What stage is this lease renewal at? We have a new legal partner who can provide case studies of similar work they have done for other residences so you can decide whether it makes sense to use them.
I fear you may be too late to negotiate, we were sent letters in October which offered a renewal but with a 30% discount on the original rent. We needed to respond by January 10th to let them know what our intentions were. According to the terms of their proposal a 'no response' was being interpreted as an acceptance of their proposal. A group of us sent official responses to the operator stating that we wanted to continue under the existing terms and are in negotiations with them to reach a better outcome. As a first step I would check the proposal they sent you to confirm it was the same as ours and to make sure your deadline hasn't passed. Happy to answer any questions you have as we're all learning as we go along and to share the contact that we are using for negotiations.
English
Français
Comments
mickheno
<p>hi , yes i can see your
26 January 2017<p>hi , yes i can see your post . i just joined this site this week . </p><p> </p>
Mick789
Hi, I have just joined .
17 February 2017Hi, I have just joined . Would love to get more information about lease renewal and the pros and cons of selling a leaseback property. Would be great to get all the co-owners singing off the same hymn sheet.
KevinFD
Has anyone heard about a
16 October 2017Has anyone heard about a change in the terms of the lease with Vacances Bleues?
bez
Hi all, Apologies for the
18 October 2017Hi all, Apologies for the delay in responding, I haven't been active on this forum in a while and have not checked emails on the account I used to set it up in some time.
I'm sure you've read the horrific experiences many people have had with leasebacks so to date we have been lucky that our operator has paid in full and on time. The difficulty I have with the scheme is there is no clearly defined exit strategy.
You may know already that the first lease is due to expire in February 2018. Around this time last year we heard that the operator Vacances Bleues (VB) were interested in renewing the lease but with some changes, the main relevant change here was a proposal to reduce the rent. Around that time several of us were trying to find other co-owners and a French co-owner managed to get a list of quite a lot of parties and we exchanged emails.
A few co-owners attended last year's AGM where VB confirmed they would be seeking a rent reduction but no confirmation of the level of reduction. In March they informed a number of owners, mostly French, that they would not be renewing their lease, which depending on your intentions could be a good or a bad outcome. I believe most of those owners are interested in signing a new lease, either with the current operator or a new operator depending on what deals are on the table.
In terms of the level of rent decrease I have heard the figure of 15% to 25% being mentioned but have no concrete evidence if either of these figures are in any way accurate. My impression is that most co-owners would like to renew the lease with VB if the conditions don't change drastically.
I would have expected to hear from VB by now as if neither party cancels the lease automatically renews under the same conditions (and rent) as the first lease. I have several emails that I can share with you if anyone is interested just let me know and I will forward on by mail as it's too much to post here.
If I hear anything further I will share with you.
DIARM
Hi
25 October 2017Hi
Received registered letter yesterday titled "Application for Renewal of Lease". Rent reduced by approx 30%. Property doesn't wash its face anymore and I'll need to supplemnt it by approx. €200 per month. New lease is for 9 years
I'm considering my options
1) Renegotiate my french mortgage if possible ...its fixed for 20 years...about 7years remaining.
2) Negotiate with leasee Vacances Bleues for improved terms ...is this possible ?
3) Sell my property
I'm also wondering if we will incur a refurbishment cost for furniture for the property ..and if so how much this my cost.
The letter received was quite official and i am required to reply in the next 3 months.
Has anyone else received this letter
Diarm
bez
Hi Diarmuid,
25 October 2017Hi Diarmuid,
The same letter is being received by many owners at the moment.
To summarise:
1. Some owners leases have been cancelled which means VB are not renewing and the owners must decide what to do next.
2. Some owners have received renewals with various decreases, for the French owners it seems these decreases are in the range of 10% to 20%. For foreign owners it appears to be around 30%. From speaking to one French owner he does feel that this is playing on the fear of foreign owners that they do not have a choice.
There is an email distribution list in place, I will forward it to you and would encourage you to reply to all with your experience so we can gauge how many people are in the same situation.
Seamus
You have a choice but it
25 October 2017You have a choice but it depends on what you want. The proposed lease is only legal if you sign it. If you do not the mgt company has to honour the 1st lease. If they are having cashflow problems (which is likely) they may pay rent later and later (or not at all). If that happens you can serve a CDP (on this site £50) - if they do not pay rent following that you can break the lease without paying compensation and then your apartment will become "normal". If you accept the new lease and then try to sell it will significantly affect the sale price. Out of lease it is much more valuable and you can avoid repaying the pro-rata TVA by continuing to short term let it offering 3 of the leaseback services.
Another note if you refuse to sign. The mgt company can it some stage appeal to the french courts to force you to accept the proposed lease but they must prove to the french courts that the new rent is justified.
Seamus
Mjlaikman
Hi, I also received a notice
14 November 2017Hi, I also received a notice that Vacances Bleues Hotels wanted to renew the leaseback. It was for a 12 year term (not 9 years as per the original purchase agreeement) and at a 30% reduction in rents (which will not cover my mortgage P&I payment). I wrote back to VB and their legal representative rejecting the terms of the contract but willing to discuss different terms. Not sure where this is going to go. I may end up just paying off the balance of the principle and keeping this for my own use (including private rental).
Michael.
bez
Hi Michael,
15 November 2017Hi Michael,
You will not be able to use the apartment unless the lease is broken, if you break the lease VB will seek an indemnity eviction as compensation. I have been told this will be 2 approximately two years turnover divided by your 'co ownership shares' (fraction of complex that you own). If VB break the lease no compensation will need to be paid.
The approach many of us are taking is to accept the renewal but under the existing conditions i.e. no reduction - this puts the onus on VB to negotiate or walk away, if no agreement is reached they must continue to abide by the terms of the initial lease. There is potential for them to go to court to pursue a judgement forcing owners to pay the reduced rent but they need to back this up with evidence that the reduction is justified and in the meantime they need to pay the full rent.
We are in contact as a group via email, I'm happy to add you to the list if you want to PM me.
Mjlaikman
Hi Bez, thank you for the
16 November 2017Hi Bez, thank you for the information. So even after the contract has expired, and if VB and I cannot enter into an agreement on terms to renew the leaseback (ie: they walk away), I still cannot use my apartment for 2 years?
Yes, I am interested in becoming a member of the VB/Divonne les Bains group. I'll send a PM shortly.
Best wishes,
Michael.
Knocknagoun
Hi Guys,
28 February 2018Hi Guys,
I'm in the same boat as you are in relation to the lease renewal at Villa Du Lac. I'm a little behind the ball and wondered what you have done if anything. I'd appreciate any advice you could offer.
James
Seamus
What stage is this lease
4 March 2018What stage is this lease renewal at? We have a new legal partner who can provide case studies of similar work they have done for other residences so you can decide whether it makes sense to use them.
Seamus
bez
Hi James,
5 March 2018Hi James,
I fear you may be too late to negotiate, we were sent letters in October which offered a renewal but with a 30% discount on the original rent. We needed to respond by January 10th to let them know what our intentions were. According to the terms of their proposal a 'no response' was being interpreted as an acceptance of their proposal. A group of us sent official responses to the operator stating that we wanted to continue under the existing terms and are in negotiations with them to reach a better outcome. As a first step I would check the proposal they sent you to confirm it was the same as ours and to make sure your deadline hasn't passed. Happy to answer any questions you have as we're all learning as we go along and to share the contact that we are using for negotiations.