Law firm founded 10 years ago · 30,000 clients represented • Paris • Marseille • Les Gets
Many co-owners of Appart’City residences come to us to get paid. This is, of course, the very least a landlord can expect from a tenant—and the very least our firm can secure.
Appart’City is still losing money—even after its merger with Park & Suites! A lot of money! Why? Because Appart’City’s shareholders had too many residences built, which were sold at inflated prices to generate large development profits up front, promising rents that are too high, which have thrown operations out of balance in several saturated markets or markets facing competition from more efficient models.
Are the co-owners responsible for this? No, of course not! Should they bear the consequences? No, in theory—and yet unpaid rent piles up every quarter! And they have to hire a lawyer just to get the rent paid, which is unacceptable.
But the hardest part is yet to come for the co-owners, who are chasing after their rent payments… Given that rent paid to co-owners accounts for more than 40% of this group’s revenue, co-owners of most residences have cause for concern as long as Appart’City continues to lose money!
In other words, despite the hopes raised by the (hypothetical) arrival of fresh capital from new—and even former—shareholders, co-owners won’t be able to rest easy as long as this group continues to lose money.
And only sound management will enable it to stop losing money. Not just by moving upmarket or pursuing a more refined business strategy. Because ultimately, there is no sustainable solution without sacrifices—whether voluntary or forced—on the part of many co-owners: rent reductions, contributions toward renovations…
“Tax burdens and toxic products.”
Yes, but here’s the thing: dozens of advisory boards and advocacy groups are swarming around the co-owners and continue to make them “dream ” of a world where it would be possible to solve the problem through legal proceedings, criminal complaints, or even appeals to the AMF (Financial Markets Authority) or the Competition Authority, or thanks to media coverage—whether favorable or not—or intense lobbying of politicians. Politicians show little interest in savers whom they tax heavily, thereby pushing them into the arms of those who sell them—at great profit—these “toxic” products, of which Appart’City is just one example.
Worse still, some would be willing to do anything to force a bankruptcy filing or trigger a protective restructuring. This ignores the powers of a court-appointed administrator, who has formidable tools and extraordinary rights against “uncooperative” landlords: the ability to terminate a lease at any time, regardless of the agreed-upon term and without having to pay a single penny!
In fact, any amounts owed would not be paid but would simply become a “claim,” which the judge could, moreover, decide to spread out over ten years without interest. That is, unless the company is simply liquidated—since the best properties would likely be sold off as part of a divestiture plan, with the rest “liquidated” and the rent receivables lost forever!
Fortunately, however, Appart’City’s shareholders also risk losing everything in this dangerous game, and it is likely that—unless a large enough group of “kamikaze” or ill-advised landlords manages to bring down the group— this scenario is certainly not what Appart’City’s executives and their shareholders want. Thus, Appart’City’s co-owners will only rest easy once this group starts making money! They must now come together with a clear head to get paid—but above all, to intelligently plan for the future. Because negotiation is essential to reaching a viable compromise with your tenant! This requires transparency from Appart’City regarding the performance of all its residences, as well as experienced advice that informs the co-owners about the various solutions and alternatives—both on a residence-by-residence basis and for groups of residences.
“It’s not enough to simply know the law: you need real-world experience in business negotiations and managing crises in struggling companies.”
That is why co-owners and residential complexes—represented by their associations or their homeowners’ association board—must band together with advisors capable of negotiating this type of agreement to the best of their ability, because that is their profession and they have the experience to do so. It’s not enough to simply know the law; you need real-world experience in business negotiations and managing crises involving struggling companies.
Our firm specializes in this type of negotiation, and we are well prepared for it. Finally, having 100 co-owners represented and advised in a single residential complex is good. But 100 residential complexes agreeing to join forces to negotiate would be even better! However, those involved must understand this, and their advisors must stop “looking out for themselves,” because only a collective effort—a powerful coalition of residential complexes united for negotiation, led by a small number of competent and authorized negotiators—will yield optimal results. Then perhaps, following such negotiations, the co-owners of Appartcity will be able to sleep soundly again.
