An Douar, Brittany

Hi,

I too have one apartment in An Dour and also in the same

boat.

I have not fully received rent yet. My last payment to

the builder was delayed. And for this reason they have

retained the rent in part. Last payment I made it in end

of September 2010. So by now I must have received at

least more than half of the rent because of holiday

period for the developer/management company at the start.

CLV are also my agents and they are generally good. But

when it comes to dealing with developer in terms of

getting your money (rent or interest), they cannot do

much because of stonewalling by developer (Promoinn).

See the explanation below by CLV for not receiving full

rent. You have to adjust it for the month by which you

have paid your full payment to the builder.

+++++++++++++++++++++++++++++++++++++++++++++++++++++

"Please see below the answer from the builder.

He received your check for the last payment today.

According to the contract the lease will start 15 days

after the full payment of the price of the property.

Therefore the lease will start on the 15th of October.

There is a 3 months holiday period for the rents (until

the 15th of January) which means that the first payment

will be beginning of March for the period from the 15th

of January till end of February plus the next three

months (March, April and May) payable in advance.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++

++

Have all of you got the interest payment promised by the

developer for the delay in completion?

I have received a letter from Residalia that the rents

are being delayed because of by winter maintenance issues

in the development.

What I find with the Promoinn is they do seem to be slow

or indifferent about the promises or obligation with

regards to payments.

Yes, I would like to join your group, and see what we can

do about this whole mess.

Hi

It appears that residelia have sent a letter to the

agents in France regarding the non payment of rent.I

guess this means that we are not the only ones. I did not

receive a letter. Cest la vie say they are looking into

this and will get back to me as soon as they have

information.

I don't know what we can do now. The property has been

booked throughout the summer. It is not as though there

are difficulties with occupancy.

Any ideas? I would like to know if there are any other

owners out there also so that we can get together in some

form of group action.

Hi

Good to hear from you. I also use c'est la vie. They are

currently on holidays. I think back on Monday. I have e-

mailed them and will ring on Monday to try and find out

what is happening.

We did receive the first two quarters rent without a

problem. The payment was a little late each quarter but

it did arrive.

I have also e-mailed residelia. They are also away on

holidays.

Perhaps if we both make contact with c'est la vie on

Monday. See what they say and take it from there.

Yes if necessary we could share a solicitor. It would

also be nice to make contact with others.

I have been watching the bookings for An Douar and they

appear to have been full all summer so it shouldn't be

anything to do with bookings.

Let me know what you think.

Are Goelia and Residelia related? Is one a subsidiary of

the other?

Hi all,

has anyone heard anything about An Douar? Has any one been

paid any rent? Has anyone contacted a solicitor yet?

Barney

Hi All,

Has anybody had an update on the current situation since

October? I have heard nothing. I have received no rent

since June either.

What can/should we do now? I was ok to wait to see if

things could be resolved but no perhaps we need to get a

solicitor on the case.

Regards

Barney

I am not sure how helpful the previous observations are..... like most

hindsight, it is easy to be wise after the event, as I am sure anyone looking

at the value of their RBS or Lloyds shares, Greek bonds or most anything

else would also agree.

Specifically, the issue of getting out of the current leaseback, it is Residelia

that may well want to break out of contract and our task is to extract the

maximum value from their wish to leave: whether this is transfer of

common areas, money back from the court case for delay in building or

whatever. What is clear is that Residelia will not continue in the medium

term and will not be able to pay the existing rental agreement rate. We can

either let this drag on for 3-4 years and get no income for most of that

time, and then likely get nothing other than legal expenses.

The value is certainly influenced by rental income, but these are falling all

over France due to the Recession etc, An Douar has more going for it than

most due to its size, proximity to the beach and quality of build. It is likely

to rebound as the economy turns round, at which point our new contract

and management agreement needs to allow us to benefit fully from a rising

market. To sell now would be to take a serious hit, but then what about the

RBS share value etc?

So practical strategies to solve our current situation please rather than

generalisations please.

Greenfintry

No-one in their right mind would buy a French leaseback

in my opinion. On paper they sound wonderful, in reality

they're a nightmare - so much for a hands-off hassle-free

investment.

There is a market for re-sales, but you will have to

offer such an attractive return to a prospective investor

that you will suffer a capital loss on your investment.

Which is why, in my opinion, you should not accept a

reduction in rent? The market value of your leaseback is

not based on what local studios/apartments may sell for,

it's based on what another investor considers to be a

good return for his investment. The lower the rental,

the lower your asking price needs to be.

You can't get out of the leaseback without paying

compensation to the management company (not even after

the initial 9 year lease (the management company have an

automatic right to renew). Did your selling agent tell

you this?

Do you think this should be a viable investment? Is it

in a good place, with good all year round occupancy?

Could they ever be converted to "classic" accommodation,

or is it only viable as a tourist residence?

No owner should sign anything without having it first

checked out by a proper legal expert (not an accountant,

not the selling agent)

We are just back from a fine week in Audierne, during this time we had

contact from Bertrand and also did a little digging. At the moment Bertrand

is acting for 10 owners (out of what, 40?) and as mentioned earlier is

looking to put a proposition to Residelia as it looks like they are running out

of money fast..... The bigger the group, the more leverage he has and the

better the deal we may extract.... Our experience in the Alps would be to

avoid going legal if at all possible as it will lead to a long period of no

payment and little asset to recover from the insolvent company. There is

massive over-supply of residences in Brittany which has depressed yields

along with the recession, a grotty summer and algal blooms. None the less,

Audierne and the location of An Douar are exceptional and should succeed

in the long run.... The reduced rates suggested by Bertrand look like the

returns of the new financial environment.... Interestingly, there is a legal

process on going against the architect that caused the whole project to be

delayed by 2 years, and Bertrand is trying to go after some of this money in

the compensation too.

To clarify, Residelia is a sister company to Goelia, and mostly exists in the

nursing/retirement home space, they had intended to expand into

residences, but that plan is now toast, so the move over to Goelia makes

sense and they are VERY BIG.. which should increase the chances of

weathering the next period....

Hi

This sounds positive- I mean there appear to be

considerable number of French owners. This strengthens

our situation. Other French owners will have local

knowledge and may have contacts with other management

companies.

I also wondered how/ when Residelia entered the equation.

The problem here is a middleman between the owners and

Goelia. Middlemen take their cut and perhaps this is why

the figures don't add up for Residelia. In short this

appears to be why we may have to take a cut on the rent.

I received my statement yesterday and I have been paid

for June, July, Aug. The only quarter I am missing is

payment in advance for the Sept quarter.

I suppose we now wait for the outcome of the October 27

Meeting.

Hi

Good to hear from another owner at An Douar. We did receive

rent for the first two quarters but I have just received my

bank statement and we have not received anything for the

last quarter. I have e-mailed my agent in France and the

management company this morning.

Please let me know how you have fared.

Just less than 50% of owners took legal action at Le Beaumarchais, Pantin. It cost a few hundred euros each (from memory I think it was between 400 & 700 euros). However, our lawyer also successfully claimed the correct rental increase that we should have had over 2 years ago, so taking legal action, in our instance, was profitable for most owners. We didn't set up an association because our lawyer said he could claim more in compensation if he acted for us as individuals (there was a limit on the level of compensation if we created an association). However, every case and residence is different. But I do believe that you need a French avocat who is specialised in dealing with these matters. Don't let anyone scare you by saying you may need to pay the VAT refund back etc, there are ways round that. Check out your management company, look at their finances. What do they pay themselves? Are they advertising and marketing the residence efficiently?

I am reading all your comments with interest. This has happened at many sites across France.

I have personal experience on two occasions and many of the issues and concerns raised by you our group have already been through.

What you really need to do is to identify all owners and set up an association and then if you are not based in France find a French company who can represent you and negotiate new terms and conditions.

In my case we did agree to a reduction but put a number of clauses into the new contract which said that it was only for two year, could be independently reviewed at that time, accepted additional weeks in the interim etc.

For what it is worth we used C'est La Vie and did achieve an outcome without recourse to legal action which will work out very expensive and most likely still result in the same outcome. We found them very responsive to our needs and after setting up our association had a number of meetings at which C'est La Vie joined by telecall.

Catherine

Sale of common areas would be bad in addition to

reduction ion rents. Basically we are losing current

value as well as control and possibly future value.

The rent formed the major part of the decision to get in

to this investment.

Independent legal action is possibly only way out to

resolve this so that we do not end up financial hole.

Count me in independent legal action.

Also what is the actual income the property has produced

so far and I believe we should also have an independent

French accountant to see if the investment does not

attract enough income or the way Residellia manages it

makes it so that income is not enough to cover the rent.

How can we find out the French owners?

Also, how and where the owners can meet some where,

discuss and draw up an action plan including any

financial out lay and upfront payments to start the

action.

The sale of the common area is TO us, not away from us. Believe me

trying to set up free standing companies within French law, putting the

existing company into liquidation and avoiding VAT will take several

years and still may fail.... Better to set out our thoughts to Bertrand

ahead of his meeting with the French owners

Martin

Hi,

I have been thinking about this some more and I think the sale of the common areas would be really bad for us. Not only would Residelia be able to hold us to ransom on future rent negotiations as the development is worthless without the common areas but in theory they could levy a charge against us for use of that area.

I also wonder why as owners we could not collectively incorporate our own management company and employ administrators to do the day to day work. This would have the advantage of cutting out potentially one party in the chain trying to draw profit out of us and allows us to take direct control at the next contract discussion with Goelia. Of course it does have its own administrative drawbacks with so many shareholders.

Hi,

As I have not been involved with CLV but are affected could someone please send me Bertrands note. I also intend to contact him as it appears that if this moves forward he needs as many owners as possible on side.

In the commentary I feel that selling the common areas is making ourselves hostage to Residelia in the future as they will use this to control the rent they pay us. In addition, I agree that accepting a 30% rent cut will have a serious impact on the investment value. However unfortunately I believe we should be realistic that some rent reduction may be necessary as a management agent who can't pay is one who can't pay.

For me the only reasonable action is for us to use a lawyer to make sure we get the best possible deal we can that leaves Residelia with enough income to be solvent but no more or we somehow declare Residelia in default, seek compensation and then appoint another company. I guess French companies have to file company reports somewhere so perhaps it would be interesting to see how much money Residelia have. If the other leaseback is profitable for them then they have the money to pay us.

Anyway count me in on any action.

Based on my experience, I would say you need to contact

as many owners as possible and employ a good lawyer. I

have one leaseback at Le Beaumarchais, Pantin, Paris.

The management company wanted to impose a massive rent

reduction on the owners and said they would not pay rent

until the majority of owners signed a new lease. We did

not agree to the new terms and used a French avocat to

recover our rents, successfully. Most owners at this

residence felt that if we had to suffer a reduction in

rent, we would rather it be with a different management

company of our choosing, rather than the bunch of crooks

we felt we were dealing with. Please take proper legal

advice. You have made a major capital investment and to

accept a reduction in rent will devalue your investment

considerably, certainly more than the cost of a good

lawyer. Look at the way your residence is being managed

and draw your own conclusions as to whether it should be

profitable for the management company or not.

It seems to me that not only do owners want a hassle free

investment, but so do the management companies who think

these properties are going to let themselves!

Mudds40824.8938657407