Online petition launched by aggrieved Irish buyers of French leaseback properties

Many investors have lost up to 70 per cent of their capital from time of purchase

A group of Irish buyers of French leaseback properties has launched an online petition to raise awareness of a series of problems they have encountered since taking on such properties. The aim is to highlight awareness of their plight, while lobbying for regulation and accountability at Government and EU level.

For over a decade French leaseback properties have been marketed as such reliable investments that they could substitute for a pension. Buyers are encouraged to buy a property with a “guaranteed, hands-off” rental stream for nine to 11 years. The French government agrees to waive the VAT. However the reality has been that management companies at a number of schemes fail to pay the rent and quickly become insolvent. A new operator takes over, offering a lower return. High and indiscriminate management charges are introduced and previously unmentioned taxes take any remaining income. A large number of Irish owners have been left bereft and in debt, with many simply walking away from their French mortgage.

In 2006, advertisements in Irish media for the Languedoc’s Les Jardins de St Benoit described it as a “Superior Leaseback Opportunity”, on a vineyard, with 5.59 per cent “guaranteed rent” and “excellent potential for capital appreciation”. Non-payment of rent quickly became an issue at St Benoit. Owners attended a meeting in Dublin where the sales agent advised them to sign a new lease with reduced rent. Problems at the development continue.

Many Irish investors have lost up to 70 per cent of their capital from time of purchase. Up to 60 Irish owners at St Benoit estimate they are out of pocket by over €12m in this development alone, between declines in property values and loss of rental income.


The online petition, which can be found at, launched in early January and has already been signed by hundreds of distressed owners. Petition initiator, Jennie Molphy, says they wish to highlight the misinformation used at point-of-sale, to encourage regulation as a financial product or, at the very least, apply the protection timeshare sales receive within the EU. They also want to gauge the numbers affected, currently an unknown.

Noel Cocoman is part of a group taking legal action to recover their investment. “Properties are overpriced at sale,” he says, “negating the VAT reduction, and management companies are set up to fail so that larger operators can benefit.” Severe penalty clauses mean that owners are tied into rolling over paltry leases on termination, preventing them converting to a saleable freehold property.

Many Irish buyers took out French mortgages, complicating matters further. French banks do not negotiate, or even communicate when properties get into difficulty. They foreclose, sell the property for a fraction of the purchase price and bill the difference. Owners argue the banks have also been complicit in the leaseback debacle, as they are aware the properties are overvalued and not investment grade when they are granting loans on them.

The issue has been raised with a number of MEPs who have expressed an interest in helping. The French government has not engaged to date. In France, a similar petition has been launched by French owners. The Central Bank of Ireland has said it "has no role in regulating the property sector or property investments".