Supporting French Leaseback Owners

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.

At the end of July, I received a letter from the CMA stating that they had formally referred this matter to their French counterparts, Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (DGCCRF), and had asked that they consider taking action. Shortly afterwards, I wrote to Commissioner Jourová to inform her of the CMA’s response and ask whether she could assist in the coordination of information between the national consumer authorities of the UK, Ireland, and France in an attempt to find a resolution to this issue. In late September I received Commissioner Jourová’s response, which stated that the Commission is in touch with British and French authorities on this matter, and that the DGCCRF is the body facilitating cooperation with other relevant French authorities and the CMA. As of October, we are waiting for the CMA to present UK consumers’ complaints to their French counterparts, due to happen later this month.

I will continue to stress the urgency of this issue. Furthermore, I continue to follow any progress on this matter and will keep you updated of ongoing developments.

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: daniel.dalton@europarl.europa.eu

 

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