Leasebacks in France are designed to encourage French tax payers to invest in needed rental property for; tourism, student accommodation, historic building or low cost housing.
Anyone can buy a leaseback property. A big difference is often that a French owner hopes the managment company will renew their lease at the end of the 9 to 11 year first period, and a foreign investor often expects the lease to fall away and they can use the property themselves.
The fact is that under French law, no matter what is said or written at the commencement, a lease can be renewed or substantial compensation for termination demanded.
My personal feeling is that, if a company does not want to renew the lease then the property is a problem anyway so no one will want it as it is not a good investment.
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Hello
Could you tell me what happens at the end of a leaseback? How are the apartments managed if the leaseback is not renewed e.g. if I want to retain the apartment for my use or rent it out privately, how are the communal areas managed such as the swimming pool etc.?
Thank you
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Hello Jacqueline,
At the end of the lease period, if the company do not wish to renew (they have an absolute right to do this no matter what they said when you signed), you will have a co-propriete agreement with a management company for the communal areas which you will pay an annual charge for in addition to the local taxes and occupation taxes etc – depending on the classification of the property, (tourism etc) you may be able to occupy the property yourself, sometimes for six months a year, you will be able to rent it out yourself. it all depends on hte type of development, the permissions and the agreements.
Tony