The buyer would ideally been informed by a French lawyer in the process of french investment and acquiring properties for sale in France. When buying an investment property in France, you don’t think the tenant could not pay rent. It happens sometimes with rental properties in France (French Alps, riviera, Paris …). The rental income of this French property funds the payment of your mortgage. You have to move quick and efficient. Only a specialized lawyer in France can provide you with this results on the long term.

2. Leaseback Properties Contract written with wilful misrepresentation
(indemnite d’eviction)
Leaseback properties in France. Private individuals agreed to
a leaseback scheme in France (buying and renting to an operating
company)

3. Summary
•The operator (tenant) waives the eviction compensation in the
commercial lease, knowing that this waiver is not valid (not
enforceable).
•The judges cancel the lease. The operator of the
French leaseback property (tourist residence) is not entitled to an
eviction indemnity (damages called in French : indemnité
d’éviction).
•The bad faith of the tenant, who drafted the commercial lease
turns against him.
•This case law could be a huge step forward in the right of owners
of a French leaseback property.

4. Abstract
The (tenant) lessee, is a
company specialized in the
management
of leaseback properties.
However, the operator
writes the lease with bad
faith. Because he pretends
to waive in advance his
right to damages, if the the
lessor end the contract.
(eviction
indemnity/(damages called
in French : indemnité
d’éviction).

6. BUYING / SELLING or
RENTING a real
estate in France can
be tricky
You want to buy or
sale a French
Leaseback or a
property.

7. Many issues arise when you buy and sell or rent real estate in France :
•Breakdown of appliances before settlement
•Rent review in France
•Buying real estate in France: Preliminary agreements
•Deposit after signing a preliminary agreement ?
•What contract should my French lawyer review ?
•Selling Real Estate in France
•Choosing a Real Estate Agent in France
•What kind of contract should I sign with the real estate agent in France ?
•Eviction of a Tenant in France (unpaid rent)
•Buying property in France that needs refurbishing
•Real estate Latent Defects (hidden defects)
•Can I terminate the lease ?

9. LEASE BACK
INVESTMENTS IN
FRANCE ARE
COMPLICATED

10. There are specific considerations for French lease back investments :
•Termination of a Commercial Lease due to unpaid rents
•Termination of a Commercial Lease in France
•Charges and Commercial Lease in France
•Obligations of the managing/operating company
•Responsibilities for lease hold repairs.
•Selling a Commercial Lease in France
•Legal solutions and Litigation in France
•The notice period under the French Law
•What should I do if my tenant in France is not paying rent ?
•4 pitfalls to avoid when investing in a student residence
•Trap: serviced residence rents which are too high
•Service premises in a co-ownership

12. French leaseback
problems

14. Since the 80’s and the 90’s,
several thousand of owners
bought leaseback property in
France. The operating
company states the return
profit would be 4 % to 5 % per
year. Sometimes the builder
sells himself the real estate.

15. During the 2000s, the operators marketed the French
Leaseback overseas and especially in the UK and Italy. It
was marketed as a risk-free and high return investment.
The leaseback schemes were aimed to put enough renting
properties on the touristic areas of France. The government
and the big leaseback companies present it as a win-win
solutions for operator, investor and the economy. The
leaseback companies lobbied the MP’s int the French
Parliament.

16. A lot of buyers
thought they
will be able to
have a holiday
home in
France after 9
years (or at
least 20 years).

17. Tax cuts, vat
refund and
rental income

18. The purchaser benefits of
a VAT refund, because his
deal is funding a new
build in France. The
operating companies
and/or the construction
company doesn’t has to
finance with costly bank
loans.

21. The french tax agency does not
collect VAT on these sales. This tax
cut comes from the french law
voted by the Parliament. The
French government wants to boost
the real estate industry.
Construction and tourism are
creating a lot of jobs in France. The
idea is to put on the market enough
holiday homes and flats to rent for
few days or a week.

23. The leaseback scheme works around an operator,
who rents to tourists or students. The operating
company has to paid guaranteed rent. It means the
yearly rent is the same, even if the flat isn’t rented
during the low-season. The leaseback owners are
supposed to be paid every year without having to care
about the daily business of the tenant.

24. Please Visit Our Wabesite
https://frenchrealestatelaw-
traesch.fr/leaseback-indemnite-eviction/
https://frenchrealestatelaw-traesch.fr

25. THE END