Guide to French Leaseback Property Submission to the Competition and Consumer Protection

1

GUIDE TO FRENCH LEASEBACK PROPERTY SUBMISSION TO THE COMPETITION AND CONSUMER PROTECTION COMMISSION
OR OTHER AUTHORITY

PLEASE NOTE: This template has been drawn up by a group of owners of French leaseback properties as a guide for fellow investors who wish to make their case heard by official authorities at EU level. It is not authorised or issued by any government or EU department.

We believe that the rights of European consumers who invested in French leaseback properties were violated by the practices involved in this scheme, and we want to share information and support other owners in seeking recourse through relevant authorities within the European Union.

For ease of use, we have put our comments in red on the following pages. This document is in four sections, running over 9 pages.

SECTION 1: ABOUT YOU

Owner’s name(s): ______

Address: ______

______

______

Nationality: ______

Date of birth: ______

Place of birth: ______

Marital status:______

Occupation:______

Telephone:______

Email: ______

What establishes your status as a consumer?

(This is defined in consumer legislation as a natural person acting outside the scope of their trade, business or profession). The following is a suggestion:

We bought this property through an agent (name the agent) who facilitated our purchase, arranged our bank loan, facilitated the notaire in France, facilitated our undertaking with the management company of the residence in France (name the management company) and liaised between us and the developer (name the developer). Not only did we pay a purchase price for the property, we also received a service, which is covered under consumer law. The agent’s commission was their fee for this service.

SECTION 2: ABOUT YOUR LEASEBACK PROPERTY

Name and address of the property: ______

______

______

______

Property type (Apartment/Villa/No of bedrooms):

______

Date of initial promise to buy: ______

Date of purchase: ______

Date of signing original lease agreement: ______

Purchase price: ______

Amount of VAT refund received: ______

SECTION 3: Information and Supporting Documents

The following suggestions are borne out of our own experience of providing submissions to the CCPC. Clearly, the more comprehensive the information you can provide, the stronger the case, but don’t worry if you don’t have all the information to hand. Send what you can, and include copies of any supporting documentation that may be relevant. Include all pertinent details from the marketing and the lease, stating the ‘guaranteed’ rent. Highlight the aspects of the sale that were misleading. For example, had you known that the guaranteed rent was not in fact guaranteed in any way whatsoever, and in fact frequently was not paid at all, you would not have made the purchase and would not have signed such a lease contract.

1) What prompted your decision to purchase the French leaseback property?

2) Was legal advice offered to you or sought by you to advise on your purchase? (If so, provide details):

3) Were you advised about any risks associated with French leaseback investment?

4) Describe your experience of purchasing a French leaseback property.

The following recommendations from the CCPC is a useful guide in terms of what information to include in this report:

• Include a clear timeline of the events – that is, the journey from how you became aware/involved with the purchase to the date of submission (including key dates).

• Include names and details of all individuals involved in the journey from start to end including location (address).

It would assist the authority’s assessment of these matters to include copies of the following supporting documentation from the start of the journey to the date of submission, which could cover:

• Any advertisements, screenshots from websites, newspaper articles or other documents that may have influenced your decision to purchase the property

• Brochures on the investment, or any marketing material provided to you by the selling agent who sold you the property, and the full name of the selling agent

• The arranging of the investment – application forms, correspondence etc

• Any financing applications/correspondence

• The contract to purchase the property, and the full name of the trader (development company)

• Any contract documents you received when you arranged the leaseback, and the name and details of the trader (developer or sister management company)

• Copies of all leases signed

• Correspondence with the operators and the lease tenants

• Any correspondence renegotiating leases/terms

• Details of any legal actions taken in Ireland/France – date of action, type/purpose of action and any judgments received

• A summary of how you feel your consumer rights may have been breached

• A summary of the main areas of concern and what you wish to achieve in terms of the issues you raise

SECTION 4: EU Consumer Directives

The following EU directives were outlined by Ms Veronica Manfredi, Head of the Unit for Consumer and Marketing Law at the European Commission, at a conference with Brian Hayes MEP and Irish owners of French leaseback properties. We advise that you read these directives and then compose a response to each from your own experience and perspective.

Mis-selling of the properties: UCPD

Directive 2005/29/EC on unfair business-to-consumer commercial practices (the UCPD) prohibits commercial practices that can deceive consumers, if such practices are likely to cause consumers to take transactional decisions they would not have taken otherwise. Article 6 of the Directive prohibits misleading actions and Article 7 prohibits misleading omissions. Whether a commercial practice, such as the advertising and the promises made by the sellers for the properties in this case, qualify as misleading must be assessed on a case-by-case basis by the competent national authorities and courts. In addition, Annex I to the UCPD lists 31 commercial practices that shall be considered unfair in all circumstances (meaning without a case-by-case assessment of whether the consumer's transactional decision has been affected). The commercial practice in No 8 of Annex I UCPD could possibly be relevant to this case, as it prohibits undertaking to provide after-sales services prior to a transaction in a language which is not the official language of the MS where the trader is located and then making such a service available only in another language without clearly disclosing this to the consumer before the consumer is committed to the transaction.

Your response:

Unfair contract terms: UCTD

Directive 93/13/EEC on Unfair Terms in Consumer Contracts (the UCTD) protects consumers against unfair contract terms. Under Article 6 of this Directive, MS shall lay down that unfair terms in a consumer contract shall not be binding on the consumer.

If a consumer tells a court that he believes that his European rights have been violated, the court must stay the proceedings and assess whether this is the case. There is ample case-law from the Court of Justice of the European Union on this, notably concerning mortgage enforcement proceedings. In recent years the CJEU has further developed its case law on the effectiveness of the protection of consumers against unfair contract terms under the UCTD. Although the CJEU does not directly rule on the fairness of individual clauses used by banks, its pronouncements imply rather strict standards for the assessment of contract terms used inter alia by banks, including transparency requirements ensuring that consumers are properly informed. In these cases the Court of Justice of the European Union has established that national courts and authorities are required to examine, of their own motion, the unfairness of a contractual term against the background of the UCTD as transposed in national law.

Your response:

• Cross-border enforcement and cooperation (the CPC Network)

Regulation (EC) No 2006/2004 on consumer protection cooperation (the CPC Regulation) lays down a cooperation framework to allow national authorities from all countries in the European Economic Area to jointly address breaches of consumer rules when the trader and the consumer are established in different countries. The CPC Regulation links national Competent Authorities to form a European enforcement network, the "CPC Network". This means that in this case, the Irish Competition and Consumer Authority has an efficient way to contact its French counterpart, the DGCCRF (la Direction générale de la concurrence, de la consommation et de la répression des fraudes) to discuss the matter.

• The applicable law and the relevant court

According to Article 6 of Regulation (EC) No 593/2008 (Rome I), a contract concluded by a consumer with a trader shall be governed by the law of the country where the consumer has his habitual residence, provided that the trader, by any means, directs his activities to that country or to several countries including that country. Thus, if a trader based in France directs his activities at people in Ireland, consumers affected by his practices in Ireland can invoke the protection of Irish law. The concept of 'directing' one's commercial or professional activities to the country of the consumer was addressed by the Court of Justice in joined cases C 585/08 and C 144/09 Peter Pammer and Hotel Alpenhof GesmbH. This judgment sets out a number of criteria for establishing whether a website is 'directed' at a specific Member State, such as the use of different languages or currencies on the website (see paragraphs 92 and 93 in particular).

Your response:

Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial Matters (the Brussels I Regulation) sets out the rules for which courts consumers can go to in proceedings against traders. Under Article 16(1) of this Regulation, the consumer may bring proceedings against the trader either in the courts of the Member State in which the trader is domiciled or in the courts for the place where the consumer is domiciled.

How to Submit Your Complaint

The CCPC recommendsIrish consumers send their submissions by email to:

This will ensure the submission and all the attaching documentation is logged centrally in its information management system.

Or you can send it by post to:

The Competition and Consumer Protection Commission (CCPC)

Bloom House, PO Box 12585, Railway Street, Dublin 1

Website:

For queries, call the Consumer Helpline on Lo-call 1890 432 432 or 01 402 5555

(opening hours 9am - 6pm Monday to Friday)

UK consumers can send their submissions to the UK Competition and Markets Authority (CMA). Link: UK CMA Notification Page

Lobby Your local MEP

MEPs have the facility to raise this issue with relevant authorities within the European Parliament. Through themwe can explore what protection may be afforded to us as consumers within the EU,lobby to have existing EU laws enforced so that we may seek redress for the losses suffered by us, and ensure that the practices that led to us having been mis-sold properties in the past may be prohibited from continuingin the future.

In Ireland, Brian Hayes MEP () has been very supportive of Irish consumers caught up in the French leaseback scheme, one which he has described on national radio as “a complete scam.”

UK consumers can contact their local MEP for advice. At the time of writing, Dan Dalton, MEP for the West Midlands region () and Margot Parker, MEP for the East Midlands () are aware of the issue.