Deposit Refunds?

[JJ]

This is our third gite season, and we had our first cancellation some months ago for two weeks in May 2007.

The deposit had been paid by the clients. We have now just re-sold the same two weeks in May.

I know that we are under no legal obligation to refund the deposit to the original bookers, but I was just wondering what other gite owners did in cases like this?

[cooperlola]

Speaking purely as a customer, I would be flabberghasted if my deposit were returned!  However, it would give me a really warm feeling about you and if I wanted to book again you would be at the top of my list.

[Bugsy]

You beat me to it there Coops, but my view is exactly the same as yours, and returning the deposit should assure you of both good feedback and a satisfied customer, who will return.

[JayJay]

It happened twice to us & we returned the deposits as they gave us fair warning. Both parties did book at a later date & one returned several times.

[The Riff-Raff Element]

This has been a subject of some discussion in our household. At the end

we decided to take a look at what Thomas Cook do. Now, they take a

deposit on a non-refundable basis: if you cancel, you lose it. We do

the same. We are a business too. That said, we've not had to do it more

than twice and on both occaisons the weeks did not relet (to be fair,

one still could, but I doubt it given the timescale and a couple of

other things).

When we take a booking deposit, we stop marketing the weeks in

question. We would not relet the weeks if someone came in and offered

us more money, for example: we take the deal seriously. I do not think

it is unreasonable to expect our customers to take it seriously too. If

someone tries to cancel we offer them all the flexibility we can in

adjusting their booking dates, obviously, and have done this more than

once too. If someone has paid in full and then cancels, we refund in

the event of being able to relet, though the deposit would be kept even

then. This is rather more liberal than Thomas Cook (they keep the lot),

but strikes us as being fair.

We recommend that our guests take out comprehensive insurance at the

time of booking. If they have a good reason to cancel (illness,

whatever) then this insurance should cover them, and we will be happy

to provide (and have provided) supporting documents in the event of a

claim. What we will not be is willing partners to caprice.

Now into our fifth year of lettings, we have observed a significant

hardening of our attitudes when it comes to being mucked around. We

provide a very good service and get a happy percentage of repeats and

recommendations, but this is not a hobby: it is our living.

[nimportequoi]

I return the deposit as long as the weeks are re-let.

[Suandpete]

    We do the same - return the deposit as soon as the weeks are re-let.

[Cassis]

Customer point of view and our own policy as B&B - refund if re-let, keep it if not.  I can't see any justification for anyone keeping the deposit if they can re-let, other than a small admin charge.

[Quillan]

If its a French based business then there are actually rules/laws about this. The amount of deposit you give back depends on the time between the cancellation and the date they are due to arrive and is worked out as a percentage of the deposit you must give back.

This is a rule/law but to be honest people seem to do what they like and I admit I didn't know about this until last year and I had already been trading for three years. I don't think any Brits will bother taking you to court if you don't give the right amount of their deposit back and as you can see most think they won't get any anyway. So the rules/law state.:

Deposit - Minimum of 15% to a maximum of 25% of the value of contract.

Cancellation

90 days or more - Full refund of deposit

60 to 90 Days - 75% refund of deposit

30 to 60 days - 50% refund of deposit

Les than 30 days - No refund of deposit.

These are laid down by Gite de France and Clévacances and are found on the reverse of their standard contracts. Whatever GDF has as a rule is also usually law as well.

Personally if I get another booking, especially if I have not had to 'work' to get it I give the deposit back. It does not feel right to keep it from a moral point of view.

[Llwyncelyn]

Jon what do the terms and conditions of the contract say?  Are your potential clients made absolutely aware of the T's and C's.

If so fine then you are 100% right.  However put aside the legal side if you are able to relet then you have profited some what by at least the amount of the deposit?  This obviously goes into the P & L act but perhaps a gesture to those who have lost their deposit by a small refund.  You are under no obligation to do so but as others say think about future clients word of mouth all those sorts of things. Positives no negatives.

We used to let our home prior to moving but of course we did not do so on a business footing per se and just allocated whatever income towards overheads and then further improvements.

However if we had to rely upon the income for our well-being then I too think I would have become somewhat hard-hatted.  Had some problems but never cancelled holidays.

 

[Quillan]

I wonder if I let out my flat in the UK to a French person and I issued the contract from France becuasse I found the person in France how would I stand legally. Does French contract law or UK contract law apply?

[Llwyncelyn]

Quillan most contracts at least those that I have looked at our indeed written contain a clause where in such cases the law of this country or the other apply.

However residency fiscal or otherwise have caused the Judges huge problems over the years as well as where the contract came into being.

So as it everything it depends.

[Quillan]

So if you don't have any clause about which countries law the contract come under then what happens. Does this mean I can sell my house privately in France to a person under statng that I am doing so under UK law in my sales contract?

[Llwyncelyn]

Quillan this is a hugely difficult area.  But are you fiscally resident and otherwise resident in France?  or are you resident in the UK.  As a present I will let you have a legal textbook on the question in hand.

Briefly and I have mentioned this before in the 70's I think it was or may be a bit earlier a nasty divorce was taking place and with the husband living in France.  He came across regularly for the social events of the season and was served a writ at Ascot.  He argued resident in France the Courts held that by his conduct etc etc he was resident in the UK so UK law applied.

Take the most recent case of the Seychelles business man.  Again the Commissioners of the Inland Revenue or indeed the Court of Appeal held that because of his flying in and out of the UK for things such as Henley Ascot Epsom Derby that sort of thing and taking into account the days of travel that he was ordinarily resident in the UK.  That is going to appeal............but is the law as of today.

Again in contract law there must obviously be offer acceptance consideration and legality and again in matters of doubt the Court looks at what the intentions of the parties were in relation to the contract and their actions deeds comments written words documents etc are taken to pieces in an attempt to try to arrive at that decision.

Interesting area and I know QC's of the Inner Temple who make a very and I mean very good living out of not appearing in court but drafting contracts both for individuals and corporations on tax and residency.

[Quillan]

Trying to keep it simplistic (so I and others can understand - coz you legal chappies have a way with confusing us plebs with long words and in my case thats very easily done [:D] ) if you are resident in France, pay tax there and issue a contract to a person from another country for something they will be doing in France (say working, hiring a car or a gite) would it not be true to say that the contract is by default comes under French law?

[JJ]

Many thanks to you all for your responses and thoughts.

When the family cancelled thay said they would like to come in the future, so I have decided to reimburse their deposit.

Quite a few of you had the same thoughts as me, in as much as they are more likely to re-book and reccomend us to others if we show them such a gesture.

Yes I know we are running a business, and we rely on the income for a living, but I am thinking long term for the developement and goodwill of the business. I will not have lost any money.

A Happy and Prosperous New Year to you all.

[The Riff-Raff Element]

As I understand it, contracts can be deemed in pretty much any

jurisdiction. I am in no way a legal professional (actually, I'm not

sure that the term "professional" could ever be employed to the kind of

snake-oil peddling I used to get up to for a living, still), but during

the course of my career in the oil industry I was involved in many

hundreds of trading transactions. With a handful of exceptions, these

were placed by dint of a clause in the contracts under English law,

with the parties submitting (usually) to the jurisdiction of the High

Court in London. English law was applied even when neither party was UK

based - between US companies based in New York and Texas, pairs of

Italian companies, Dutch companies trading with Russian ....and even

between pairs of French companies for transactions occuring in France.

Of course in the event of dispute a party could presumably contest the

jurisdiction, but for contracts freely entered into they may not easily

succeed. Deeming a contract under English Law does not exempt the

parties from locally applicable laws and regulations: I couldn't

include a clause that allowed our guests to drive at 60 mph in 90kmh

limits or apply UK alcohol / blood limits here in France. It is the

performance of the commercial aspects that is governed, and that

includes the terms of payment.

We make the position on deposits very clear in the T&C that

accompanies the booking forms we send out. Moreover, we send two copies

and require that one copy be returned to us signed for having been

read, understood and agreed to by the hirer.

[Llwyncelyn]

I was once involved in a contract for Unilever that started from an Italian subsidiary the goods were then traded against other goods in Singaport then those goods were in the raw state xferred to South America and then ended up in Holland in a totally different guise. I did not draft the contracts there were really top notch guys doing that but it was interesting.

I also know a QC who works on customs and excise stuff and watches the 'round robin' approach of say 'chips'  as in IT coming and going as well as mobiles and where vat becomes payable and indeed repayable.

Please believe me there are millions and millions of pounds of fraud in that area!

[nimportequoi]

I haven't had many cancellations, but one was a group who had booked all 3 gites and they had to cancel due to someone in the party being diagnosed with cancer and having to undergo treatment during the summer. I think it would have been difficult to refuse the refund of deposit in those circumstances, even if I've had the "no deposit refund" clause in my Ts and Cs.

[Quillan]

[quote user="Llwyncelyn"]

I was once involved in a contract for Unilever that started from an Italian subsidiary the goods were then traded against other goods in Singaport then those goods were in the raw state xferred to South America and then ended up in Holland in a totally different guise. I did not draft the contracts there were really top notch guys doing that but it was interesting.

I also know a QC who works on customs and excise stuff and watches the 'round robin' approach of say 'chips'  as in IT coming and going as well as mobiles and where vat becomes payable and indeed repayable.

Please believe me there are millions and millions of pounds of fraud in that area!

[/quote]

Typical legal beagle, it's all as clear as mud and you have circumnavigated the question twice now and my guess is you don’t have an answer

If you live in France and you rent out property in France to anyone either French from within France or a person from a different country be it within the EU or not your contract is created under French law.

French law sets out certain specifics with regards to the area of renting a house or rooms for holiday accommodation and the rules on deposits as I have already mentioned. The fact that you may be English and only let to English is not an issue if you are tax resident in France or have stayed in France for as long as is required to be classed as resident, you must abide by French law.

 

[Iceni]

[quote user="JJ"]

When the family cancelled thay said they would like to come in the future, so I have decided to reimburse their deposit.

[/quote]

In the circs why not hold their deposit and apply it against their next booking ?

John

not

[Llwyncelyn]

Dear Quillan your views are your views and thus deserve respect.  However obviously one does not have to agree with them.

I do have an answer and I am more than prepared to go into detail but my lack of response is not to be viewed as not having an answer but based upon the view that this is not the forum for lots and lots of legal exchanges.

As I say more than prepared to answer but my guess is that you would not be able to pay the fee account.

 

Good bye.

 

[Pun]

Hi'

The correct way of doing this is to make sure you state in your terms/conditions just how you want to deal with it, ie if your not returning any deposit then say so if on the other hand you are having a scale as to the notice of time given, again say so in the terms and cons,

Im in the middle of sorting this side of my gite, and having recieved very good legal advice Im told no matter how you run your gite, ensure the customer knows and has a copy of all the terms and conditions pre taking any firm bookings,

this way everything is above bourd, every one knows just what they are getting into and all concerned have an interest to keep to the terms/cons and its all in writing, no I thoughts or you said. it's all in your hand in writing and on confirming the booking both sign. .

 

[Llwyncelyn]

I will try to answer the point being made by Quillan and indeed touched upon by an earlier contributor.

Just because one is based here in France does not mean that the contract is subject to the laws of France.  However if you look at the bottom of some documents here devis or whatever it basically says that if there is a dispute then say the Tribunal at Coutances is the determining body.

However any two parties wherever they are based  or more indeed can draft the contract so that the laws of the UK apply and if you look at particularly assurance contracts they are constructed in such a way as to ensure that UK laws apply and for obvious reasons.

Then again if you look at UK corporate contracts some are drafted in such a way as to ensure that the Courts of Delaware are the determining body.  There is a reason for this in that Delaware has some unique company law flying about.

Therefore wherever you are in the world you can impose (and hopefully have accepted by the other party) a clause whereby the law of UK France or whatever applies.  You can even draft it so that parts of the contract are under UK law and other parts under the laws of another country. Since the advent of multi-modal transport (containers full of goods belonging to numerous parties) the law has been fraught to identify what jurisdiction comes into play say goods shipped from China then via Hong Kong then to India.  It is a minefield.

What happens therefore when there is a dispute and a difference between the parties as to the understanding of what jurisdiction applies.  Then the guys in wigs sit down and decide or try to decide what the intentions of the parties were.  Thus if it looks as though their intentions was not to be the UK but France then it is quite the case that by default then the case has to be heard in France and can be heard in France.

In arriving at such decisions the Judges take into account conduct residency and a whole host of related information to try to arrive at an 'equitable' approach.

Equally and here I am not sure of present law but it is interesting to contemplate where in email contracts the contract comes into being and which jurisdiction applies.  Take Amazon some goods come to you via the States some from France some from Jersey or the UK I have not looked at the t's and c's but would be interesting to see what Amazon have to say.  But that again is for another text book.

 

[Miki]

Having let places for some years now, I will give you my tuppence worth.

For B&B to the French, I am guided by the rules formed by G de Fr and naturally taken by the govt as gospel.

For the cottages that we have let over the years and keep in mind, we let mainly to Brits, we took and expanded the regulations given to us by John Smith, one time founder/owner of Chez Nous. I think Pun has covered it quite well. The main thing in all letting, is to propose/offer your rules and then the client has the choice to sign for those regulations, or not, it is as simple as that. Repayment or not, is then is purely in the hands of the owner.

We have reimbursed totally in certain cases, we have taken out expenses in others and kept the deposit when we had little or no chance of a relet, we have kept the whole deposit and still relet when the excuse was nothing more than a smokescreen to get the money back. We will always offer an insurance claim to anyone who feels their excuse is genuine enough to want to claim their deposit back from their insurance agent who, like others no doubt, we inform them to take out insurance against any possible cancellations.

Now what could be fairer than that ?