Leaseback in the Alps: How do you get your apartment back ?

End of the leaseback in the French Alps

Lessors/Landlords of a leaseback in the French Alps wishing to terminate the commercial lease of an operator must have a bailiff issue a notice of termination.

At the end of the notice period, the operator must return the keys to the owners, after payment of an eviction indemnity, unless the tenant has waived the eviction indemnity subsequent to signing the commercial lease.

The turnover method is often used to determine the eviction compensation. In the case of a tourist residence in the mountains, case law applies special coefficients for that kind of leasebacks.

How to calculate eviction damages ?

The turnover method

The Chambéry Court of Appeal is the main source of the case law applied to leaseback in the French Alps.

The Chambéry Court of Appeal applied the following coefficients to a tourist residence in a uniquely well-known ski resort (Pierre et Vacances Avoriaz):

– a coefficient of 0.7 of turnover. 

The Chambéry Court of Appeal used the following coefficient to assess eviction compensation for a chalet in the Le Village Gaulois tourist residence in the Saint François Longchamp ski resort (73130):

– a ratio of 1.2 of turnover.

The EBITDA method

The Chambéry Court of Appeal applied the following coefficients to a leaseback in the Alps in a uniquely well-known ski resort (Pierre et Vacances Avoriaz):

– a coefficient 8 applied to EBITDA. 

(Court of Appeal, Chambéry, Civil Division, 1^re section, March 20, 2018 – n° 14/00392)

The Chambéry Court of Appeal applied the following coefficients to a tourist residence in a ski resort with a unique reputation (Eurogroup, Macot la Plagne):

– a coefficient 6 applied to EBITDA.

(Court of Appeal, Chambéry, Civil Division, 1^re section, December 4, 2018, n°17/00978)

Concerning the valuation of the eviction indemnity for a chalet in the Le village Gaulois tourist residence in the Saint François Longchamp ski resort (73130), the court appointed expert used the following coefficient:

– 6 EBITDA

(expert report dated September 23, 2022 before the Albertville court)

Our law firm is representing owners in the following leasebacks properties in the French Alps:

1. L’orée des neiges, Vallandry, CGH
2. Hameau du glacier Les Arcs, Adagio Pierre et vacances
3. Le Quartz La Plagne, Pierre et vacances
4. Refuge du montagnard Les Arcs, Adagio Pierre et vacances
5. Le village Gaulois à Saint François Longchamp, Goelia
6. Douchka Avoriaz, Adagio Pierre et vacances

Please feel free to ask us any question regarding a leaseback in the French Alps.