Update for Irish owners of French leaseback properties

Background

Leaseback properties became popular in France in the 1970s. This type of tourist accommodation was developed through tax incentives. A leaseback property can be a house, apartment or hotel suite and is usually located in or close to a holiday resort.

In 2017, the Competition and Consumer Protection Commission (CCPC) received submissions from Irish property owners who purchased such a leaseback property in France. Complainants were concerned they may have been mis-sold their properties.

The role of the CCPC is to enforce competition and consumer protection law in Ireland. The CCPC does not have an ombudsman function and therefore cannot intervene in individual complaints, on behalf of individual complainants.

However, as a member of the European Consumer Protection Co-operation Network, which is composed of the EU consumer protection authorities, the CCPC was in a position to ask the French authority, Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (DGCCRF), to investigate the issues raised by Irish property owners on their purchase of leaseback properties in France.

CCPC activity

The CCPC provided a preliminary assessment of over 150 complaints to the DGCCRF. Furthermore, to assist the French authorities to undertake their investigation, the CCPC also supplied the DGCCRF with documentation from the complainants.

In December 2019, the DGCCRF advised the CCPC and the complainants that it would conduct a criminal investigation into the various issues raised. The CCPC supported the DGCCRF investigation by:

Providing assistance or supplying information when requested by the DGCCRF
Updating the DGCCRF on issues raised by Irish property owners
Forwarding additional documentation to DGCCRF at the request of complainants
Providing updates to complainants as authorised by DGCCRF

DGCCRF update

The DGCCRF has informed the CCPC that they have completed their criminal investigation into the matters raised by Irish property owners. Their update is as follows:

Cases in relation to certain resorts (identified below) may now be progressed further through the French criminal justice system. For property owners in those resorts, it is important that they now take further steps if they wish to access reports sent to the French prosecutors or lodge complaints with the relevant courts in order to be potentially eligible for compensation at a future point.

The information provided by the DGCCRF on this part of their investigation is provided below.

Irish owners of a French leaseback property in Le Petit Lac Mandelieu, Les Jardins de Saint-Benoît Saint-Laurent-de-la-Cabrerisse and Les Jasses de Camargue Gallargues-le-Montueux

9 December 2022

Following an in-depth investigation relating to three resorts/residencies in which Irish investors had purchased French leaseback properties, the DGCCRF national investigation service has submitted reports to the public prosecutors of three ‘Tribunaux judiciaires’ (courts of first instance) in the South of France.

The reports submitted to public prosecutors relate to the following resorts:

Le Petit Lac Mandelieu;
Les Jardins de Saint-Benoît Saint-Laurent-de-la-Cabrerisse; and
Les Jasses de Camargue Gallargues-le-Montueux.

These reports of the DGCCRF, subject to what will be the decisions of the public prosecutors once they will have completed their examination, can give rise to criminal law proceedings before the three courts. Then, if such proceedings are actually opened, and if at a second stage, after having proceeded with the cases the courts reach the conclusion that French criminal law has indeed been breached, these courts will be in a position to condemn the authors of these practices under this law, i.e. to impose on them a fine or even a jail sentence.

However your attention is drawn to the fact that the above-mentioned possible proceedings cannot lead to the granting of any financial compensation, which can exclusively stem from the undertaking by the plaintiffs themselves of an individual legal action for this very purpose.

It is therefore indispensable, for property owners in the resorts detailed above to be possibly granted such financial compensation, that they undertake such action. This means, in procedural terms, that they must now lodge individually a documented complaint before the relevant court, whilst referring to the reference number of the relevant criminal case, the purpose of which will be to seek compensation for the damage they have suffered.

For the avoidance of doubt, the aforesaid concerns all property owners in the resorts detailed above, whether or not they have provided a file to the DGCCRF. Indeed, under French Law, the DGCCRF is not allowed to act on behalf of plaintiffs in any way regarding the processing of their individual requests for compensation. Any information contained in the reports submitted by the DGCCRF is therefore legally irrelevant regarding the issue of compensation, which is to be handled individually by each plaintiff.

Given the foregoing, the DGCCRF have suggested to the CCPC to provide property owners with the information in the table below in order to allow property owners in the three resorts/residencies to lodge such complaints. The table below contains the details of the relevant court for each resort/residence, including the contact details and the applicable case reference number. Please use the reference number provided in the last column when contacting the court.

Resort Name	Court	Reference Number
Le Petit Lac Mandelieu	Tribunal judiciaire de Grasse 37 avenue Pierre Sémard 06130 Grasse Tel: +33 (0)4 92 60 71 00	P 21 314 000116
Les Jardins de Saint-Benoît Saint-Laurent-de-la-Cabrerisse	Tribunal judiciaire de Béziers 93 avenue du Président Wilson 34500 Béziers Tel: + 33 (0)4 30 17 34 00	P 21 333 000064
Les Jasses de Camargue Gallargues-le-Montueux	Tribunal judiciaire de Montpellier Place Pierre Flotte 34040 Montpellier Cedex 1 Tel: +33 (0)4 67 12 60 00	22053000039 21336000171

The DGCCRF have advised that in order to facilitate the processing of a property owner’s case, it is recommended that property owners are assisted by a lawyer. They advise that for representation at a national jurisdiction in France, the lawyer is required to be registered at the French bar. Read the directory of lawyers registered at the French bar. Property owners can access the directory and select the relevant speciality (droit immobilier, i.e. estate property law). DGCCRF advise that property owners should make sure that the French lawyer selected knows the tourist residences’ scheme.

The DGCCRF state their investigation is now complete with the submitting of reports to the public prosecution services. DGCCRF advise that the public prosecution services are the only body entitled to initiate, if appropriate, a criminal proceeding, by submitting a case to the trial court. The French rules on criminal procedure do not allow any disclosure by the DGCCRF of the content of the reports submitted to the public prosecutors. Therefore, all requests regarding access to the file will have to be lodged before the trial court.

The remit of the DGCCRF is to investigate issues to determine whether a potential breach of consumer protection law has occurred and it does not intervene in individual disputes.

For other Irish owners of a French leaseback property, outside of the three resorts / residencies named above, their complaints are not being progressed any further within the French legal system.

The information provided by the DGCCRF on this part of their investigation is provided below.

All other Irish owners of a French leaseback property

9 December 2022

The DGCCRF advise they have now completed their investigation of the matters raised by Irish Leaseback property owners and handed over to the French public prosecutors the reports of their investigations. Those reports relate to three resorts/residencies in which Irish consumers purchased French leaseback properties.

The DGCCRF provide the following information for Irish owners of French Leaseback properties who own properties outside of the three resorts/residencies named above.

The DGCCRF scrutinised all cases where it believed establishing a criminal offence could be reasonably deemed feasible under suitable investigation conditions. The complaint you made to the CCPC, regarding the purchase of a French leaseback property, cannot be linked with the files which the DGCCRF have handed over to the French tribunals. The DGCCRF and CCPC understand that this update in relation to your complaint may be disappointing for you.

The DGCCRF have advised that your complaint is not going forward for the following reasons:

Length of time on some complaints creating statute of limitation difficulties.
Undertakings/parties to transactions and contracts no longer in operation.
Sporadic, limited number and geographical spread of some of the complaints leading to investigation challenges for national services.

The DGCCRF advise that any court decision(s) made in relation to the three resorts/residences files currently with the French public prosecution service can be relied upon by other property owners. The fact that the resort/residence you invested in may not be in front of a court, does not preclude you from taking a civil case, and relying on a decision of the courts in the cases currently going forward. If the cases currently going forward are successful, you will be able to rely on those court decisions in your own personal actions.

The remit of the DGCCRF is to investigate an undertaking to determine whether a potential breach of consumer protection law has occurred and it does not intervene in individual disputes.

The DGCCRF has informed the CCPC that its work on these matters has concluded, and thus they will no longer be providing updates on your complaint.

Next steps

Irish owners of leaseback properties in France should bring the information on this page to the attention of their independent legal adviser. As the circumstances of individual property owners are unique, independent legal advice on this update should be sought.

As the French courts are now dealing with these matters, the work of the DGCCRF and the CCPC has come to an end. The CCPC thanks the DGCCRF for the considerable work, effort and resources they have put towards investigating this matter for Irish property owners.

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