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Parliamentary question - E-001291/2021Parliamentary question

French leaseback properties and consumer protection

Question for written answer  E-001291/2021
to the Commission
Rule 138
Clare Daly (The Left)

The scandal of the French ‘leaseback’ scheme is well known. Since 2017, France’s General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) has been investigating the matter. Several matters are at stake, including ‘eviction compensation’. The purchaser of a leaseback property signed a lease contract for 9 (or 11) years, and the seller made them understand that the contract ended then. However, this was not the case under ​Article L145-14​ of the French Commercial Code, which sets out that these contracts are given to consumers as part of a tax incentive. After 9 years, purchasers cannot reclaim the property without paying ‘eviction compensation’: a considerable and prohibitive sum that effectively traps the consumer in the contract indefinitely. This is not in the original contract, thus constituting a ‘hidden term’. This type of contract was a requirement from the French authorities under the tax incentive (Demessine law and others).

This would appear to be a clear breach of Directive 93/13/EEC on unfair terms in consumer contracts[1]. Consumers subject to these contracts cannot get a fair hearing in a French court since rulings are made with reference to the French Commercial Code, and not to EU consumer law as it is transposed to French law.

What steps will the Commission take to ensure that France upholds its obligations under Directive 93/12/EEC?

Last updated: 19 March 2021
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