Leaseback - How it really works!

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Leaseback - How it really works!

So you have been sold a 5% yeilding property by an agent.

You will be encouraged to sign the lease with a management company and all is well. However now you have paid most of your deposit the management company has had to change. Its name is Tinpot plc, a new cokmpany with no assets and only a 1000 Euros of capital. Rents the fax, hoover and dishcloth.

You get your first rental payment be it late, delayed or on time. This is great as it alleviates the developer who mostly appoints the management company of any legal wrong doing. Thing is you paid for your firsty rental payment as part of the purchase price.

So the rent dries up and the current economic downturn and the bad Euro is blamed. You get issued with a new lease with a 40% reduction. You call the selling agent/ developer and they recommend a good local lawyer.

Now let me really tell you what has happened at this stage.

Chances are that you have been mis sold your mortgage for starters. Secondly the renting agent who chances are is linked very nicely with the developer will know how much your mortgage is for and how vulnerable you will be to no rent and for how long. They have drawn up an alternative business plan that will involve how many people they want on the new lease, how many appartments will evict (usually those with small mortgages) and the hard core that will sign only in blood. Remember from here in the management company is quids or Euros in. They are renting your property, paying you no rent and their liabilities have been greatly reduced moving forward.

Those people who will not sign and default will lose their properties and chances are the developer or management company will buy them up when they appear at auction at a fraction of the cost. You have been a good customer, not only have you funded the development you have now sold your property back at a great reduction.

Those that evict will be approaced by the selling agent to do a private rent but will receive no rentals.

Chances are you will be offered help from a local lawyer who will be recommended by the selling agent and be local to the problem.

They will also milk you for every penny of Euro you have. Be very clear about the path you take. You will be asked to pay for bank account attachments, balliffs you name it. When you eventually meet others they would have paid for the same thing on the same day. You will be asked to pay for various bits of information and then hey presto once you have handed the cash across the information appears anyway but your money has already been spent and not a receipt in sight. They will attend court appearances for you and fight your case. That one day when you hop on a plane and attend the court in person unannounced they will not be their but tell you how they appealled with no success.

You either want to evict or put the management company into administration. DO NOT SIT AROUND - DO IT QUICKLY. Time is money and every month is 100'000's of Euros in the management companies pocket. Move alone initially then pick up people on the way but do not stop or wait! Keep detailed records, keep a diary, print every email, record every telephone conversation.

Most importantly do not trust anyone associated with the purchase, from selling agent to developer to bank to notaire or anybody who offers you a £5 bet on if you are going to get any rent paid (you know who you are Wayne)!

Chin up.

Mutley

 

 

mutley39794.2273611111

Mutley


Iam intrigued as to your comment that Wayne knows who he is - is there something we should know?


Brian L

Brian



Wayne bet me £5 I would not get paid any rent in December and I didnt. He is another owner in my development who I have become friends with.


No more than that.


Paul

Paul


Thanks for the explanation I was wondering if it was a bit more sinister.


Brian