French Leaseback Nightmare

Discussion in 'Overseas property investment' started by Tractor, Sep 13, 2011.

  1. Tractor

    Tractor Guest

    I purchased a French leaseback in 2007 & it has been a nightmare. At this stage, my strong preference is to simply default on my french mortgage as I can no longer put up with the constant stress (financial & otherwise) that this process is putting me under. I see no other option & simply don't care about the financial losses that I will sustain by my actions.
    Has anyone else ever defaulted in such a way ?. I would be keen to hear of practical experiences before taking the actual step of cancelling payments. How likely is a Fench bank to come knocking if they think/know you have other assets ?. I believe the whole leaseback scheme is cray and strongly feel I was mis-sold its merits from the outset.
     
  2. Bronte

    Bronte Frequent Poster

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    11,954
    Could you clarify in what way the leaseback is not working out and also in what way you were mis sold the property.


    If you default, then presumably the French company will come after you if you have assets and a job. Presumably they have an address for you in Ireland makign it much easier for them to pursue you.

    Can you not just sell the property and get rid it that way if it's so stressful?
     
  3. Tractor

    Tractor Guest

    Management fees have been unilaterally doubled. Rental income is being witheld. There is no end is sight to this nightmare. The property simply won't sell. I feel like I have been completely swindled by a process which is inherently corrupt.

    I am being left with a mortgage to service (22k annually) and no means of paying via so-called "guaranteed rental income". I have other assets which concerns me as I worry the French financial institution is aware of this.
     
  4. Brendan Burgess

    Brendan Burgess Founder

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    31,557
  5. Tractor

    Tractor Guest

    No. "Guaranteed" rental income is currently being witheld to "avoid insolvency" of the management company. I also looked at the possbility of re-financing my loan earlier in the summer but am receiving information that French banks are no longer prepared to look at any leaseback re-financing because of perceived increased risk of default. This is why I am so embittered as I feel I have been left hung out to dry.

    I don't honestly know which way to turn as I do have other assets but simply cannot countenance seeing them drip away to service an investment mortgage which is unlikely to ever see the income I had been promised. I feel like I am being put in an increasingly impossible situation. I don't care, at this stage, about the financial loss of my initial investment and the loss of mortgage payments for the last 3 years. I just want to know the practical implications of a default for me personally. I don't have other debts, will not be investing in foreign property again (!) & will likely not need financial loans in the future.

    I also, frankly, "blame" the French financial instutution(s) also for giving out loans for these projects where development/management companies advertise these projects but then don't deliver on their side of the bargain. They are sold as low risk investments to fools like myself but are anything but.

    Any practical help is much appreciated.
     
  6. run away

    run away Guest

    Tractor, I am in the exact same situation regarding two management companies oging bust, there is no secondhand market for our development as it is complicated by the VAT refunded by French Govt and the fragile nature or rental income./uncertainty as to its viability, with a yield now at 3.755 no one in the right mind would touch it unless it was a yield of 10-15% so that will give you the real value of your unit. I have asked various people on whether a French bank would take action against you with no definite answer. I am the one hassling my bank to try and work out a deal, have phoned them and written numerous e mails asking can we talk, threatening foreclosure, so I said fine let me know what the procedures are to foreclose and then the line went silent. If you dont have any other assets then it is not worth their while pursuing you in another country, did you buy it in joint names with someone else or on your own? On the other side of the coin if they did proceed and went to court then you would have a judgement against you.

    I also this week wondered how I got myself involved in a so called safe investment but having spoken to various people, I came to the conclusion that yes it my problem but guess what Mr Bank Manager, this is our problem, not just mine, so let them feel some of the pain. I have not yet determined whether to walk as I would like to renegotiate but if that is not forecoming then I have to reconsider, mine is 26k in arrears, I only was advised of this when I hounded the bank for months for a statement for the last 2 years, still have not received same only got a one line e mail. Bet there are kicking themselves on lending to Foreign Investors.
     
  7. oldnick

    oldnick Frequent Poster

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    1,411
    you probably have these website addresses but just in case
    frenchleaseback.net -lots of forums and advice
    -www.diarmaidcondron.com - an expert on lease-backs. I dont know wheterh he's a lawyer, but he's Irish and seems to know a lot.
     
  8. Chelseablue

    Chelseablue Registered User

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    17
  9. noproblem

    noproblem Frequent Poster

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    600
  10. Chelseablue

    Chelseablue Registered User

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    This problem hasn't gone away.
    Thousands of Irish & UK people invested into these schemes
    There are other post on this forum