leaseback exit/termination penalty

We have experienced this when we enquired about terminating our lease after the 9 years, only to find that under French law our "tenant" i.e. Eurogroup, has the right to extend the lease for another 10 years unless we terminated it by proper notice. We found French/English Solicitors who have been trying to sort out Eurogroup since. They have insisted they have the right to extend our lease even though there is a specific clause in our lease that says the tenant undertakes not to extend the lease! We are in no rush as we are not selling so can continue to argue. There is a formula for working out what they call "compensation" for terminating thir lease - I think it's something like 2.5 times the yearly income they have gained from letting the property - it's not the last years lettings but the annual income averaged over the past three years. I can recommend the Solicitor we are using - they are called Triplet.

Hi Fred,

I also want to leave my lease and sell my house. I was never told when I signed the contract anything about compensation, I only discovered this to my horror later.

I asked this year what the compensation would be and was told it would be just over 13,000 euros.

There must be something in European law to protect people from this type of exploitation.

Catherine w has cited some legal cases on the subject.

I think we need to use whatever strategies to get rid of them. All these emails are becoming confusing. I would hope to have the opportunity to meet other owners and exchange knowledge and experiences; then we could devise several strategies. If people could be more flexible when they stay in their houses we could have a list of names and addresses and keep a record of the actual occupancy and compare it with the rent they are giving us.

Patricia

I think that's a very good idea Patricia,  perhaps if we are going to our house we can let people know and ask who would like their houses checked ( in as much as we can) for occupancy.  I still don't see how we can sign a legal document that states no compensation is required to exit the lease and that is disregarded.  The only reason that has not been pursued is that doing so entails solicitors and much legal cost.  I think we need to start exploring our rights in this area.  To date I have allowed my poor French to be a major barrier to taking action.  

I would urge all Irish owners to email Brian Crowley MEP on this matter. He is the only Irish MEP on the JURI (legal) subcommittee.

There are several UK MEPs on the JURI subcommittee, but am not sure if BREXIT weakens their case. You may have two years to work on this!

If you are on a % based rental, attach a copy of your "Bail Commercial" and include a reference to the French Case which ruled against Eurogroup. The courts ruled that

these leases are not commercial leases but contracts to manage and that owners have the right to exit after 9 years with no compensation.

PM if you require case reference.

We should not have to incur large legal fees individually to resolve this - lets make our MEPs earn their pay!

CathW

Will not make one iota of difference - MEP's will not get involved as the EU Commission has no power over civil matters in member states - I am afraid the only adice I can give and you will not like it is - take on the management companys through the courts. We were all scammed myself included and until we "block up" the civil courts throughout France noting will happen no matter how much "bitching" we do on these forums - were were suckers that did not investigate these schemes - in hindsight no one in their right minds would touch them. It will cost but the only way is to instruct an French avocat to take them on - Management Companys have lost in thecourts before and they will again - unfotunately you will needm at least 10,000 Euros at your disposal

I think a lot of people have lost money going the legal route. I recently sent my contract to an advocat and he didn't come rushing back to tell me of any loopholes in it.

It could work but its an expensive gamble, if only we could find out what advocat won cases on the basis that the contract was a rental agreement rather than a leaseback.

It is a lot less risky if we all book many weeks of our entitlement, so they make less money. Next year their business will probably be affected by the terrorism threat. Then we can all issue CPD's in January and hopefull get rid of them.

I think we should also contact the EU Ombudsman, who is Irish (Emily O Reilly), she oversees that EU institutions behave properly. If this covers the actions of the French government in setting up this scam backing underperforming companies who can pick and chose what part of our contracts they will honour.

I have now formed a group on Facebook entitled - Fontenelles Eurogroup Problems - pleae feel free to join this group and discuss the many and varied issues we all have - there is strength in numbers.