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Long term letting - do it at your peril


thepenofmyaunt
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For anyone thinking of letting their property long-term, I would like to share our horrendous experiences so you can make an informed choice about whether you want to do it or not.

We let our house and giet to an American family in 2009. They presented themselves as a very decent, moral family although in actual fact the woman had children by three different fathers and is now shacked up with someone else. They were a large family so we expected there to be wear and tear. We gave them permisson to rent the gite out for summer lets.  They provided us with evidence of income which we believe now to be faked. Once they moved in, the rent payments started to come in late. Almost every month, they had a different excuse but eventually paid. However, we ended up having our right to write cheques taken away and a 350 euro fine from the Banque de France after we wrote a cheque for our mortgage payments only to find that their rent payment bounced.  More excuses.  I'm sure you are all wondering why, at this point, we carried on. Under French law we were not able to give them notice. They were also claiming Allocation de Loyer which was paid directly to them on their request.  We were a little surprised as they had shown us proof of significant income, however, we assumed the CAF had made the necessary checks.

After 18 months they stopped paying their rent altogether. Their excuse was a dispute over a water bill. There was a leak at the property and consequently a very high water bill. The area has a history of water leaks due to the terrain and we had advised them to check the water meter every week to ensure that all was in order. They didn't.  We offered to pay what we felt was reasonable for the leak even though there is case law in France that states the landlord cannot be held responsible for the cost of leaked water if the tenant has access to the water meter as we felt it was right to do so but they insisted we paid the entire bill (which was for a whole year). We refused. They claimed that SAUR told them their annual usage should be 40 cubic metres and that we should pay anything over and above this. This is a ridiculously small amount for a family of 9, two properties, two swimming pools, etc but they wouldn't budge.  A few months later we breathed a sigh of relief when they gave notice. However, they told us that they intended to keep the gite as they wanted the money from the summer lets and offered to pay us 400 euros a month. The property nets 900 euros a week. We refused and told them that was impossible. They then withdrew their notice although, unknown to us, they left the property before the summer, refusing to return the keys until after the summer season was over. They took all the money for the summer lets and still refused to pay us any rent. There was nothing we could do. 

When we finally got access to the house they had trashed it. The place was filthy, one toilet had to be removed as it was completely incrusted with faeces, electrical sockets had been ripped out of the walls, the children had gouged their names in the plaster, windows were broken, furniture was missing and the kitchen had to be replaced. It was completely unsaleable and uninhabitable. We had to pay 400 euros to have all their rubbish removed from the property including broken appliances and two years worth of used sanitary towels stuffed behind the boiler. They had done none of the maintenance that the law requires, the boiler was broken and the chimney completely blocked. We immediately put the matter in the hands of an avocat who sent a huissier to do an inventory.  The tenants pointed out  to the huissier that they had left all the doors to the property unlocked for 2 months which, get this, under French law meant that we had to PROVE that they did the damage and not some random passer by. The avocat told us to forget about it as it would cost more than the unpaid rent to prove they did it, even though they had already admitted to some of the damage in writing.  It cost us 2000 euros for the avocat to come to this conclusion! The repair bill has come to around 15,000 euros.

In the end we put the matter in the hands of a debt collection agency (sefairepayer.com) who were fantastic. Within weeks all the various letters had been sent out and, with no response from the ex-tenants, they took the matter to the Tribunal who found in our favour. The tenants were given 1 month to contest it and didn't so a 'Titre Executoire' ordering them to pay the money was issued.  Hooray, you're thinking, justice has prevailed in the end. Wrong!  In August, two months after the deadline and the Titre Executoire a letter appears, backdated to within the 1 month period, but dated stamped by the Tribunal at the end of August, contesting the demand on totally spurious grounds. It was full of lies and mistruths but we didn't worry too much as the debt collection agency told us that the 'oppostion' was not actionable as it was outside the timeframe for contesting the order.  The tribunal had other ideas and, despite being the same one that had issued the Titre Executoire, which clearly states 'as you have not contested this order within the permitted period...' we were told we had to appear before them, at our own expense of course.  Then three days before we were due to go to the Tribunal, having booked flights, car hire, accommodation, etc, we got a letter from a solicitor acting on the ex-tenants behalf saying he was asking the Tribunal to delay the hearing. So we've now lost all the money we paid out and it is unlikely we will be able to afford to pay it all out again for a new hearing. If we don't go, they win the case.

To add insult to injury, our mortgage company has now foreclosed on the loan on our house as we have not been able to pay the mortgage while we paid for repairs so it could be relet or sold, and so on top of the thousands of euros we have already wasted on legal fees we have now lost our house.

So in conclusion, the law in France is a total ass. Landlords seem to be viewed as capitalists who can afford to lose the money, tenants have rights that seem to extend beyond the law. Tenancy agreements, and I'm talking proper French ones, are not enforceable and make better toilet paper than they do legal documents.  Even when the law is on your side, it really isn't. Don't rent out your house, or if you do, don't have any expectation of getting it back in a decent state, if at all. That seems to depend on the tenant rather than the law. Bitter? You bet I am.

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Don't rent out your house, or if you do, don't have any expectation of

getting it back in a decent state, if at all. That seems to depend on

the tenant rather than the law.

I would say that you are about right on this. I too have had bad experiences with tenants, if not quite as bad as yours, and can confirm the sense of impotence.

As a general rule it is a bad sign if the tenant asks for the Allocation to be paid to them and not directly to the proprietor.

They have that right (until they haven't paid when the owner can demand that it be paid direct) but I have always found that those are the tenants who see that allocation as an extra income, not as a means of paying the rent.

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I have a friend in almost identical circumstances to yours, despite letting her property through an immobilier.  She has still to get her tenant out although she has never received a cent in rent.  It made me determined never to rent out any property here in France.

Chrissie (81)

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Even I can't cap your story, OP, with my tale of the tenant from hell!  You have my commiserations.

But, that was back in the UK, when we let a flat we were living in and subsequently couldn't sell back in the early 1990s.

Now we have quite a decent property empty in dept 17 and some people have asked to rent it and others have suggested we let it out.  My answer is always "no way"....why would we want our lovely house trashed?

It seems to "bother" people that it's left empty with the advice always that we could be having an "income" from it!  But, what good is money these days and where would we put it where it will make some sort of interest and still be safe?

VERY tough lesson for the OP .....

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It happens in the UK as well ... I rented out a house in the UK  at one time  to 3 people .Two worked in a bank the other for an insurance company . All were seen to leave the house in their smart suits and smart cars .To all they gave the impression of being nice professional people the ideal sort of tenant . Wrong ...they trashed the place and were even sleeping in beds without sheets .........and rented out a room to someone else .

 Never believe what people say when they want to rent your house and as for references ... Unless you visit and speak to people they have previously rented  houses from to find out exactly what type of tenant they were don't believe them either  .

I have even had the police raid the house and  after  kicking the door in chase a tenants husband over the back garden fences . I never knew she had a husband  at the time she took on the house  she said it was for herself her mother and her two kids . The husband was it appeared at the time  still in the care of the prison service 

The finest bit of advise I was given when renting out  came from my son  He said  " Dad for gods- sake sell the house before you give yourself a heart attack  "  I took his advice and bought the French one ...Would I ever rent it out ..... Never !

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Penofmyaunt - I would try and find out where the new family is (forwarding address) and try and find out if they are treating the new property in the same way as yours - the words Private Detective comes to mind - and get some photos if admissable for the hearing, to try and get some money back. If you've lost the house as you say I would try and make their life as miserable as they made yours!(legally of course)

In the Uk when we rented out, the landlord had permission every 6 months to enter the property and check for damage/wear and tear and that the property was being maintained according to the contract. Does that not work here? When we left our rented flat, I even scrubbed the skirting boards with a toothbrush - am I sad or what!

However I do know of a South African lady and family with dogs doing the 'rented' rounds at the moment, be warned. She is a doctor or something and has left several places in a very bad state.

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[quote user="Sprogster"]The big difference in the UK is the existence of short term tenancies, which gives the landlord the ability to get automatic possession at the end of each annual lease if they want to.[/quote]

Not as simple as it appears ... It is the policy of council housing officers in my experience to tell the tenant NOT to leave the property at the end of the lease if they are seeking social housing .They advise them to sit tight and wait until the owner has obtained a count order  instructing them to leave ,

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It is surprising to read this thread, given that less than 60% of French are owner/occupiers of their main home, leaving 40% as renters. (Comparative figures for the UK are 70% and 30%). And the vast majority of landlords in France - apart from HLM - are private individuals and not institutions.

One possible alternative is to go for short-term (1 year renewable) furnished lets, though ideally these should be (very) small studio apartments, ideally in city centres. I have posted some links on another thread but if anyone is interested in this sector I recommend the website www.elise-franck.com. She is a private landlord owning properties in Paris and Lyon and although her site is in French you can click on 'Projects' and see before and after pictures, plus detailed costs and revenues - purchase costs, transaction fees, conversion costs and revenue (rental income in euros and as a percentage).

Hope this may be of interest to some of you. I've also written about her in the October issue of FPN.

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Council and social housing is a completely different thing. We are talking private rents here.  When we decided to rent the house out we took advice from a solicitor who told us that 3 years was the minimum let for an unfurnished property.

We went over twice to do inspections on the house but each time, we arrived and she wouldn't let us in because the kids were ill, the baby was sleeping yada, yada, yada and as relations between us were very good, we even took over presents for her new baby, we didn't, stupidly, think anything was amiss.

We do have her address as it is on the legal documents and also have a friend who is a close protection bodyguard who has plenty of contacts who could make her life unpleasant. Luckily for her, I'm a much more moral person and would never go down that route because she has children. Why? I don't know as she has no qualms about destroying our lives and my own childrens' inheritance but there you go.

We have loads of photos of the property and the state they left it in as our solicitor arranged a a huissier to do an etat de lieux. However, the tenants spent a lot of time telling the huissier how they had left the house unlocked and making sure that there was some doubt as to whether they had caused it all.

We've now been told we can't oppose the delay to the hearing but that, lucky us, we don't have to be there as.we can get a solicitor to act on our behalf. All we need is 1000 euros.

The bank has also confirmed yesterday that we need to attend another hearing in France otherwise the court will order the house to be auctioned, no doubt for a pittance, but never mind, if we can't make it we could, of course, just get a solicitor to handle it but that would cost another 1000 euros. It just gets better.

 

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So sorry to hear of your troubles, would it be possible for you to arrange your bank hearing close to the day of your court hearing, wouldn't be €2000 for flights and a few nights hotel stay I would hope. Assuming your in the UK appologies if I assumed wrongly.

Do hope the outcome is a positive one for you, sounds like they know their way round the system using underhand tricks.

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[quote user="P-D de Rouffignac"]It is surprising to read this thread, given that less than 60% of French are owner/occupiers of their main home, leaving 40% as renters. (Comparative figures for the UK are 70% and 30%). And the vast majority of landlords in France - apart from HLM - are private individuals and not institutions. One possible alternative is to go for short-term (1 year renewable) furnished lets, though ideally these should be (very) small studio apartments, ideally in city centres. [/quote]

Not sure why it has to be tiny appartments?

I have recently decided to let our farmhouse and stables as after 4years it still has not sold and we need to get back to the UK. I have offered it on a furnished basis in order that I can get it back in a couple of years if the market picks up.

Everyone with any experience on most forums recommend that people rent before they buy in France, but unless you can supply a ream of financial and employment details you have little chance of securing a rental on an unfurnished basis in France, and its just to much for most english speakers in such early days.

Surely this is an ideal market for such folk, they don't want to live here 'permanently' just yet, but they do want to try out life in rural France, and especially if they want to bring horses, pets etc?

I've had quite a response so far from expats looking for just that, and quite a few french trying to lull me into an unfurn 3 year min farming jobby, which I have politely declined. Still not secured a renter but much more positive than the interminable waiting for a buyer who then turns out to be a dreamer/timewaster.

Some of the gite rental sites are now opening up to this market, if anyone wants to know who, pm me.
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In talking about furnished rentals of (very) small studios and apartments I was commenting on the successful formula employed by Elise Franck in city centres such as Paris and Lyon. In her book, to which I refer, she explains that her niche market comprises mainly single, young people on temporary assignments for work, study etc who generally want the smallest (ie. cheapest) solution possible. It's simply an approach which may work in some places but not others and the proof can be found in her worked examples on her website. P-D de R.

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Thats exactly the market that I am aiming for, at present here there is absolutely no supply in this area, common wisdom is that it indicates that there is no demand but time will tell.

What i do know is that the unfurnished rental market that was so boyant when I arrived has collapsed due to oversupply, there have been loads of Robien new builds sold by shrewd promotors to naive investors.

In 2005 a friend with similar apartments to mine boasted he had never lost a weeks rental and within a few days of putting an ad in the shop window he had 40 enquiries, now it takes him 6 months to relet.

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[quote user="Pommier"]Don't forget Capital Gains Tax implications if you rent out your main residence whilst waiting to sell.[/quote]

Yes, thank you I am aware of that, but after 4 years and nearly 40% drop from our original asking price I'm past caring.....and who knows in a year or three I might even make a decent selling price even after the CGT is deducted!!

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Were Ii to sell my place and be imposable, even if I only broke even I would pay CGT on the €100000 odd of materials that I have put into it, any profit above the break even would be as a result of 10 years of my labour and would also be taxed.

Thinking about it gives me a really warm feeling [:)] - wheres that ammoniac smell coming from? [:P]

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How thoroughly depressing!  Much sympathy for people who have had such problems.

It worries me a lot as we are in the situation of working on a new house, which we hope to move to shortly.  A friend is telling us to rent our first house as it's such a bad time to sell houses but I'm very worried about that as I've heard many horror stories.

If 60% of people rent in France, there must be good tenants out there!

If we move into the 2nd house, would we then be liable for capital gains on our original house - which we bought 9 years ago and have lived  in full time for 5 years?

If we can't sell (there's a lot of property for sale in our village) and daren't rent, we have a problem as our income is quite small and we will have to pay 2 lots of house taxes, insurance and at least a minimum bill on water and electricty.

It's a shame there are so many bad tenants as there must be a demand for rental property (not sure about our village and many of the locals seem to be on benefits and to get very drunk often!),

 

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I've now put our smallholding up for furnished rental, seeking those wishing to trial a life in France or take time out for a year or two to write paint whatever, which seems to be the better option for us under french law it need only be a 1 year let. We too need out property back in maybe a year, maybe 3, but we need it back to sell when the market hopefully improves.

I know all the CGT issues, the risks from bad tenants, but frankly after several years of my life on hold it is of little consequence. I am not using an immo so will only have myself to blame if I do not chose tenants who I have vetted personally.

I have 2 people interested already and one coming this weekend so hopefully I can then get on with the next chapter.

I would never let unfunished as the risks are too longterm and the law is stacked against the landlord unfairly in favour of the tenant.

If things were different I would have sold and washed my hands of it and the french system, and anyone who tells me to reduce the price, we did, to well below agencies advice and still up for offers....no takers, no serioius viewers in 2 years!
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Wow, I've only just joined this forum but have lived in France for years and years ...

No French landlords rent out proprties without copies of avis d'impots (not just proof of income at 3 x the monthly rent) and a guarantor who has to provide same.

thepenofmyaunt - what a terrible situation, but you should have right from the start contacted the CAF who would have stopped their Allocation Logement for non payment of rent. Allocations logement are withdrawn if an allocataire doesn't pay their rent.

Secondly, they had a duty to provide you with a certificate of tenant's insurance - not to be confused with normal house insurance - which covers for all water damage and fire.  Did they give you this?

Thirdly, yes, the law in France comes down on the side of the tenants which is why you have to get a guarantor and be well aware of French tenancy law.

And finally, a tenant has the right to refuse a landlord access to the premises without advanced warning and agreement.

It's good for you to forewarn anyone considering renting out a property, but research the law properly and be aware of the pitfalls.  Never, ever take anyone on face value.  Renting out a property giving a tenant rights for subletting within a tenancy agreement is, if I'm not mistaken, against their tenancy agreement (bail).

I sincerely hope you've shopped them to the CAF (who can reclaim any amounts they were not entitled to by way of non payment of rent for years) and also the Avis d'Impots to whom they should have legally declared all the rental income.  This in itself will land them in trouble with the CAF (you can't get allocations logement if you are clearing 900 euros a week for a rental property) and also the tax man.

If you haven't already done this, it's not too late.

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[quote user="Mrs Trellis"]

How thoroughly depressing!  Much sympathy for people who have had such problems.

It worries me a lot as we are in the situation of working on a new house, which we hope to move to shortly.  A friend is telling us to rent our first house as it's such a bad time to sell houses but I'm very worried about that as I've heard many horror stories.

If 60% of people rent in France, there must be good tenants out there!

Not necessarily. Most french landlords take the maximum possible precautions to ensure rent is paid, and I imagine the majority of long term rental properties are not houses the owner wishes to ever have vacant, quite the opposite, so getting tenants out is not a problem which arises.

If we move into the 2nd house, would we then be liable for capital gains on our original house - which we bought 9 years ago and have lived  in full time for 5 years?

You will not be liable for CGT for up to a year after you move out of the house, as long as it is advertised for sale and not rented out. This was increased to 2 years for 2009 and 2010, see http://droit-finances.commentcamarche.net/faq/2342-plus-values-delai-de-revente-de-la-residence-principale I don't know if this was extended beyond 2010.

If you are receiving an old age pension and have a small enough income you should be exonerated from CGT on any property sales you make. http://www.pratique.fr/exoneration-plus-values-immobilieres.html#titre-parag-4 

If we can't sell (there's a lot of property for sale in our village) and daren't rent, we have a problem as our income is quite small and we will have to pay 2 lots of house taxes, insurance and at least a minimum bill on water and electricty.

You should be exonerated from Taxe d'Habitation on the house you leave, so long as it is empty on January 1st. of any year. Your Mairie will arrange for it to be checked and will then issue a certificate for the tax office.

If you are over 60 and have a low enough income, you are exonerated from Td'H on your main residence.

It's a shame there are so many bad tenants as there must be a demand for rental property (not sure about our village and many of the locals seem to be on benefits and to get very drunk often!),

 

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