A number of UK citizens have contacted me regarding problems they have experienced with properties purchased through leaseback schemes in France. These schemes have become controversial throughout Europe and many purchasers take the view that they have been misled by the leaseback companies and have not been protected as consumers.
Advertised in the UK Sunday papers, the schemes allow buyers to ‘reclaim’ part of the TVA (VAT), usually paid on the purchase of a new build in France, by immediately leasing out the property through an approved leasing operator for a minimum of nine years. The operator is responsible for leasing and managing the property, at a cost, as tourist accommodation for that period. Amongst other promises, the owners tell me they were ‘guaranteed’ rent and they were free to leave the lease agreement after the nine year period.
However, after a few years, the ‘guaranteed’ rents are reduced, in many cases being paid between six weeks and two years late, and the management costs increase. Moreover, when the nine year lease ends the owners are then told it automatically rolls over unless they explicitly cancel the agreement. Resulting in a compensation fee of around €30,000 to the lease company that the owners believe was not stipulated in the initial agreement.
As this issue is affecting citizens from multiple EU countries, Commissioner Věra Jourová, Commissioner for Consumers, has recommended that those MEPs who have been contacted directly by property owners should inform their relevant national authorities to facilitate the collection of evidence of specific cases. This will help national consumer organisations liaise and develop a coordinated position on the potential infringements. On 29 May Vicky Ford wrote to the UK Competition and Markets Authority (CMA) detailing individual experiences of French leaseback scheme property owners. We are now awaiting a response from the UK CMA.
Before 8 June this issue was being followed by Vicky Ford. Upon her election to Westminster, all correspondence and information was forwarded to my office and I am now investigating the matter. I would therefore ask any UK citizen who feels affected by this issue to email my office: email@example.com
An Irish leaseback owner started a petition on change.org in January 2017. To date this petition has gained over 1700 signatures from affected owners throughout the EU: www.change.org/p/eu-french-government-justice-for-hood-winked-owners-of-french-leaseback-properties?source_location=minibar