Jardin de la Fleur- Your help / mis-adviced

[moroccndream]

I need your advice on a situation which I just got to know by chance. I bought my property In Jardin de la fleur in Saidia, Morocco. The appartment is a touristic unit, which means that I will have only limited access to the property during the year. As I found out, Moroccan law places a lot of restrictions in terms of use on touristic property.

I appointed a solicitor firm in the UK that claims expertise of the Moroccan law. They sent me a first report but without mentioning that it was a touristic property and its implications for my use of it. I already paid the developper and can not undo the contract. The problem is that I bought my property to enjoy it throughout the year, not in order to let it to tourists and access it only for limited period of times. I doubt that I would have chosen Saidia to buy property if my intention was to buy in order to let, because, according to my understanding, the tourism market in Saidia is unpopular. I just recently learned through my own investigation that the place is relatively empty and that there is only a limited tourism market there, therefore I would have invested in a touristically unattractive region. I went to Saidia and found the town rather deserted, which would be fine for me if my property was just for me, but now that I am bound to letting it out, I find myself in a problematic situation. It also looks as if the property is not attractive enough to sell it to someone else without me losing considerable amounts of money.

I am now thinking to sue the solicitors which mis-adviced me, emitting the fact that the property is a touristic one with all its implications from their report. I would be very grateful for advice or contact by other investors who maybe encountered similar problems.

 

[Popcorn]

Ljdf

I don't think you bought on a Le Jardin de Fleur development as they are all residential units. Which plot did you buy on and who was you agent?

If your contract stipulates that you must rent it out, then why did you go ahead? Because at the contact stage all deposits are usually fully refundable.

 

[moroccndream]

The contract did not provide any information on renting out. It says touristic, which according to the Moroccan law must be rented out.

Neither the agent not the lawyer explained that properly or knew about it.

 

[fws]

Why did you buy an apartment for your own use in a development that you have never visited and know nothing about?

You can't blame the solicitor for the fact that you did no research whatsover.

Of course Mediterranea Saidia is deserted, it isn't built yet. Saidia itself is a nice little Moroccan seaside town, fairly quiet apart from the summer months.

Contact the LJDF developer and he will sell on for you if this isn't what you want. I believe there's a 5% fee.

 

[Popcorn]

Ljdf

I can find nothing in the contracts for LJDF that have any mention of touristic, or in fact residential, therefore I do not think you could have bought on a Le Jardin de Fleur plot?

Please let us know which plot number this refers to?

 

[uberdude]

You guys are very naive at best. You should do your homework. The Saidia plot LJDF RT8/RT2/RT6 which I am sure you are refereing too is zoned as Residence Touristique, not resedential, that is AP or VVT.

This is very specific under Moroccan Law and even under current legisaltion horizontal division is not allowed (although it is changing). RT plots are one removed from hotels and were specifically designed for use a rental lets. This is why the developer has to offer a 9 year leaseback.

The Moroccan government has a mandate to improve tourism and the Plan Azur is the back bone, do you think the government wants 9000 resedential units, only occupied 2 months of the year....exactly, these are purpose built to let out and this is why they will make a great investment. If you got sold these as a residential unit you were badly advised.

Thankfully I did my homework!

 

[moroccndream]

Thank you very much UBERDUDE that you understand what I am talking about. Property Logic sold the property units as “residential property,” including RT8/RT2/RT6, despite the fact that their contract with Fadesa apparently clearly specifies the property as “touristic” plots.

The attitude of the developer is unlawful, by hiding such important information he is misleading buyers.

The lawyer is professionally negligent, because he supposed to search first and advice me properly about the nature of property I am buying. For a non-lawyer, it was not possible to read from the contract that the property was “touristic”, and even if it had stated this, I would not have been able to know what “touristic” implies under Moroccan law. This is what I hired a lawyer for who supposedly understands and can interpret Moroccan law terms. I am extremely disappointed by the law firm, and the developer.

I am currently looking for buyers who bought and used the same law firm for conveyencing.

 

[Popcorn]

To Rent or Not to Rent

The VVT plots are defined as "Villages de Vacances Touristiques" so presumably the same applies to these as well?

 

[moroccndream]

The best way to know what is the legal status of the units built on the VVT is to require the property Logic- Fadesa contract.

 

[Popcorn]

As I am buying through Superior Group and they have properties that are similar to PL (Oasis RT and VVT plots) I contacted them to get some more information. This is the response:

"The main differences between the AP’s and the RT’s/VVT’s is the RT’s and VVT’s have to supply facilities, whereas AP’s don’t.


The properties won't need to be rented out for all but a few weeks a year, and you WILL be given the title deeds on handover. That is why it is stated in our contracts. We wouldn’t have put that in, if we knew different, as it leaves ourselves and Property Logic wide open to cancellations/legal action.


Basically RT stands for Residence Touristique which translates as Holiday Homes and VVT stands for Village de Vacance Touristique, which translates as Holiday Home Village. This means that the properties have to come furnished, with restaurant,sports facilities and swimming pools etc. This would make sense as recently we have had to add a crazy golf course to our The Pines (VVT3) area and have added a tennis court to our Oasis Gardens (RT5) area. With the clubhouses that ourselves and Property Logic are building, we have satisfied the ministry for the interiors demands.


As you probably well know, Fadesa’s AP areas are apartments that don’t come fully furnished and don’t have clubhouses/facilities within the AP area.


I have also been told that Driss Jetou, the Moroccan Prime Minister, is going to the site tomorrow (April 20th) to sign some new agreements relating to these things."

 

[moroccndream]

I would not believe what an estate agent says. He is not a legal expert, but he does have a financial interest in selling places. Sorry Popcorn, but I am not convinced of his interpretation of the term “touristic” – my Moroccan lawyer told me something very different abut the term in Moroccan law, and he deals with these cases on a regular basis in Morocco rather than the UK. “Touristique” is a legal term which implies concrete obligations regulated under the Moroccan law. It is true that there is no indication in the contract to the fact that our units have to be let out. This is because the legal term “touristic” under Moroccan law is self-explanatory: they must be let out most time of the year (not only a few weeks),and there are additional rules as to when we may actually use the property ourselves, e.g. in summer we may only live up to 2 weeks in our property. We don’t have a right to change the furniture either because the entire area of the development must confer with a certain standard.

 

[Popcorn]

My solicitor, who works out of Spain but also has an office in Morocco, is currently involved in meetings with the Ministry of Tourism and the developers - PL - and has advised that they will report back to me and their other clients shortly. They have advised the law as it stands at the moment regarding the RT status but have also advised there are plans to change this law this year to RIT status which has different implications. They have been working on this for several weeks, unbeknown to myself – but that’s why I appointed a lawyer – so that they could do the research and report back to me. I am fortunate to have appointed what I consider to be an excellent firm which I researched through the Law Society. It appears that not all the other firms have been so diligent in their research. Whether they did not know the current law or simply decided not to tell their clients because they were aware of the impending changes, I can’t say, but my lawyers have kept me informed every step of the way. I don’t know whether the new changes to the law will just apply to the Azur sites or all developments in Morocco – we will have to wait and see.

Both Property Logic with the Le Jardin de Fleur developments and Superior with their own Oasis developments insist that full title deeds will be available and that owners will be able to rent or not – the choice is totally up to them.

As this is Morocco’s flagship development, and also PL’s first development; and many buyer’s first investment, everyone wants it to be a success. The infrastructure is there on the whole resort to enable it to become a 12-month tourist resort and the infrastructure of the RRT and VVT developments with their clubhouses and services will provide all the amenities and facilities that one could wish for as a tourist. The Moroccan government have been heavily involved in this development overseeing each stage of development. Inevitably changes and improvements will be made along the way. As it’s PL’s first development they, too, realise that flexibility is important. All this bodes well for us as investors to get maximum growth and good yields.

Most people will want to rent out their properties – some will be happy to let it out all year-round; others will want to rent it and have limited usage; others want more flexible usage and only occasional usage and I know of two people who intend to be based there pretty much all year. Whatever obligations the Moroccan government have placed on Fadesa and in turn PL will be with the aim of ensuring that the properties are let out all year. However, any restrictions imposed will have to be acceptable by the majority of buyers, otherwise it will simply not work. I am sure that if something was proposed that was not acceptable, it would be possible to change it.

And that’s the very reason I set up the Owners Group – to coordinate everyone’s opinion and put our ideas, views and concerns forward. The Group consists of people from all walks of life who have great ideas and much to contribute to the ways in which the clubhouses can be organised for instance; some buyers are experienced investors and have ideas on how the rental company could operate. It’s an exciting time as we have the opportunity to be involved at the very beginning.

With regards to not being able to change furniture – please elaborate. I have been working on ideas for the draft furnishings list which every member of the group has contributed to and am also working on optional extras that can be made available, with products sourced locally wherever possible and PL are taking on board our suggestions.

I certainly think it’s an excellent idea to have the property fully furnished to a high standard – it means that tourists know the quality then can expect when renting one of the LJDF properties and it’s important that it’s maintained to a high standard. So I would certainly want to see some restrictions placed in the final contract – i.e. an obligation to redecorate at certain intervals, etc. – again nearer the time we will be putting these ideas forward to PL. But to imply that you can’t have your own pieces of furniture is simply ridiculous – it wouldn’t work.

Your obviously have an issue with your solicitor and your first point of contact should be the Law Society if you feel they have been negligent. With regards your RT7 apartment, I am happy to put you in contact with an agent who has people who wish to buy on RT7 and would be happy to take over your existing contract. Please email or PM me for further details.

 

[fws]

Thanks for the clarification Popcorn. I shouldn't worry about adding individual
items of furniture as I'm sure that isn't going to be a problem. PL are fully furnishing their properties in whichever of the 3 styles chosen, so that they can guarantee the standard of furnishing for the rental market. I doubt it means you can't add extras.

I heard from my lawyers this morning that the contract we have signed so far is only a reservation contract which is essentially a private agreement between us and PL. The legally binding contract is the Compromis de Vente which is signed in front of (or at least dealt with by) the Moroccan notaire.
In all the initial dealings with the lawyer here, they called the reservation contract the Compromis de Vente, but the new person there who is now dealing with my purchase says that what we signed isn't actually the Compromis de Vente.

Has anyone got more information on this please?

 

[Marocaine]

I just have to contribute a few comments on points raised in the last post of Popcorn. The law you talk about Popcorn passed through the Moroccan Council of Government meeting on 10 February 2007. It is not under deliberation in the two Moroccan parliamentary chambers. The law clearly states what I mentioned in previous emails. The law won’t be changed at this point of time. It apparently took the experts in the Ministry of Tourism and Secretary of the government years of work on this law.

With regards to Spanish lawyers and Property Logic and their Contacts with the Ministry of Tourism, I can only comment that this is untrue. The Moroccan administration does not know who is Property Logic. They only entered into a contract with Fadesa Maroc. Therefore, Fadesa is the only legitimate interlocutor to the Moroccan government.

I understand that you (moroccndream) are frustrated and I would also recommend you to go to the law society. Even if the developer will return your money, which is likely when considering what you told about the contract, you should do this, as time is money and you lost the opportunity cost of purchasing earlier rather than later – property prices in Morocco are climbing at the moment and it is unlikely that today you are still going to get the same price offers for houses in this location as you got a year ago, or whenever you entered into a contract with the developer.

 

[moroccndream]

Did any one have a proper reply from their lawyer on this issue of an appropriate advice on purchase of a property designated only for renting according to Moroccan Law?
I am waiting for a mini report to be made by a Moroccan Legal and Investment Expert on this issue. Therefore, I will be grateful if you do have any question concerning this issue.

I look forward to seeing more posts from you.

 

[angie4peter]

Tourist Areas

Hi All,

I feel I am quite thick and would like someone to clearly let me know what are the tourist zones on the Le Jardin de Fleur development and what are not?

I have purchased a Villa for private and family use and do not want to let it out through a management company.

Hopefully, I have purchased in a non-toursit zone and presumably this means that I have total flexibilty in how I use it?

 

[Popcorn]

All the RT and VVT plots in Saidia have "touristique" status. I have also had it confirmed by both Moroccan government and my solicitors that they are intending to change the RT plots to RIT status thereby allowing title deeds to be issued, but the same rental restrictions will apply. Also regarding the VVT plots PL are negotiating direct with the Moroccan government for a similar change of status of the VVT plots. I don't know what the change of law was made in February, but it was not changing these RT plots to RIT. Perhaps it was simply the definition of RIT status? I will seek clarification.

I will shortly be sending out a questionnaire to the LJDF Owners Group seeking their opinions on different rental management schemes and what options they would be interested in for themselves. All this I will forward to PL for their response. What have your solicitors said on this matter, Angie4Peter? PL have confirmed that those who want to opt out of the rental management scheme, will be able to do so.

 

[moroccndream]

I do not think that PL will have any voice with Moroccan Goverment on this issue. The Tourism committee has only Fadesa as partner and it is not legally binded to negotiate with PL or any other co-developers of Fadesa.

Could you please explain what RIT stands for, Popcorn?

 

[Popcorn]

Rit

RIT stands for Residences Immobilieres Touristiques.

As PL have some 13 RT/VVT plots (the majority of them in Saidia) I imagine they would have quite a voice with the Moroccan government. It is the Moroccan Ministry of Tourism who have confirmed that PL are in negotiation with the Moroccan government to have the status of the VVT plots changed. As the Moroccan government were not aware of the content of the contracts drawn up by PL which resulted in the current situation, the Ministry of Tourism have confirmed that they will supervise all future contracts between the developers and clients.

 

[traceyw8727]

Oasis beach and golf

I have only recently been made aware from reading this site of the importance of the RT plots. I was not advised by Superior's agent that there were any restrictions on occupation. Whilst i intend to rent out for the majority of the time I am not keen on having restrictions as to when i can occupy for personal use. There was no mention in the paperwork from Superior of the "touristic" nature of the plot. This details were obviously in the purchase contract between Superior and Fedessa i assume?
I have been advised by my lawyer, only after raising the issue myself, that there are laws relating to renting out but that as Superior and Fedessa will be running their own management companies that it will be easier for them somehow to get around the rules! I am requesting a better explanation of this. Apparently the new change in law is going to strenghten the RT requirements. I am also seeking more detail on what the tourtistic definition means in practice ie. how many weeks will i have to rent out.

I am abit concerned with the position, in particular the fact that it appears onlt recently to have reared its haed, i get the impression some of the lawyers were not aware. Prehaps some one could advise whether they have anymore info and comments generally whether it will effect resale market as now will not be able to sell to the retirement market!