fws - I assume you are up to speed on the latest rental policy dicussions. It looks like there is no option but to use the on site agency..and even if you don't you are still liable for service charges! A bit of a controversy right now.

Hi Anthony - yes I've had the latest from Popcorn.

I'm not particularly happy about having to sign an agreement for 9 years, but I don't know if even PL knew that at the time. However the different zones in LJDF were very clear on all the maps. The Moroccan government's aim is to increase tourism, so if anyone bought in a tourist zone, they should perhaps have realised that there would be an expectation that the properties would be rented out. Anyone wanting it for their sole use should perhaps have bought in a residential area.

Having said that, only 70% need to be in the rental pool, so it may not be quite the problem some people think as I would imagine a lot of people aren't going to try to manage a property in Morocco from abroad.

I bought in a tourist zone because I need the income to pay the mortgage, so for me it's not a problem. I'm not sure of the situation regarding the service charges, but obviously everyone benefits from the services provided so they have to be paid, just like in England.

I think what this brings out is that buying in an emerging market is a gamble. Property is cheap precisely because it is an emerging market. Everyone wants the nice fat profits, so there has to be an acceptance that there is a risk. People who think that British property rules should apply really are not prepared to take that gamble and should think very carefully before buying in such emerging markets.

Harsh words, but you have to expect the unexpected abroad and not moan about it or don't take the risk in the first place.

fws - I agree and don't agree.

When buying off plan abroad one should be prepared for the unexpected but I don't think it is unreasonable to assume that PL should make such significant clauses on usage transparent upfront.

They are selling me the property not the Tourist Board. I think it is their responsibilty to make me aware of such significant conditions of purchase. Certainly the more informed we are the better but where do you draw the line? Why didn't they tell us? If they didn't know...what else do they not know?

Should we be willing to accept any number of new clauses/constraints in the future and the default answer be "well it's in the Moroccan law somewhere so it's up to you to find out." I guess it all depends on what you think is reasonable for the developers to address and what the individual should be solely responsible for.

If I am not mistaken, even if you don't participate/get drawn out of the hat for the rental pool, you still pay the fees associated with rental management! That doesn't seem at all equitable.

I don't understand your harsh words. This isn't about "nice fat profits", it's about transparency and or competency when someone is spending hundreds of thousands of pounds. I agree we need to accept more risk - geopolitical, economic, local infrastrucure etc. I suppose I didn't expect the risk to be that the developers either don't know what they are doing or they do know but are not being transparent.

i think I am going to get out.

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."

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?

I do agree with you Anthony. The developers is neither well informed, nor transparent when they knew about the legal status of his plots. Fadesa tried to get away from their plots to PL and Superior. They kept the normal plots to theme selves. Fadesa did mention that the plots are Touristique, In order to avoid all legal fraud claims against theme.

The other developers went to the market to realize profits very quickly without been advised properly on different legal aspects. Thier first strategic mistake was using Spanish lawyers, while Fadesa always uses a Moroccan lawyer in addition to their in-house Lawyer Mr. Fernando.

The problem is not only with the un-transparency of PL and superior, it is also a professional diligence of English Lawyers. Who they think that Morocco is like France. For example if you see all firms in UK have no Moroccan Lawyer. The UK and Spanish firms were not professional to do the right research on the plots, consult Moroccan planning authorities, registry etc. The fact which they have to be responsible for....

In order to answer the post made by Popcorn, I would like to say that VVTs and RTs are all subject to the same restrictions in terms of renting, services charges, Management company created by the Developer….
The Gulf Course is for all residents of Saidia without any restrictions. The other Facilities made for the Touristique Plots, is quiet clear because they have status of a hotel. Therefore they must have all the leisure facilities.

Following discussions between my solicitors and the Moroccan Ministry of Tourism it would appear that under the present law 61-00 (Statut des etablissements touristiques) (Residences touristiques) an individual title deed cannot be provided to the purchaser because all RT and VVT plots are considered for the construction of hotels and tourist apartments (villas and apartments) with the view of having one management company dealing with the complex.

If the new law is granted (and it looks likely that it will be) the RT will be converted into a RIT (Residences Immobilieres Touristique) and therefore each owner will be provided with title deeds. Only 30% of purchasers are not obliged to rent.

However there is no provision for conversion with VVT plots. For this to happen, the Moroccan Government will have to come to an agreement with PL direct. The Ministry of Tourism have confirmed that PL are currently in negotiation with the Moroccan Government to enable this change to be made to the VVT developments.

The suggestion made by PL is a new concept and one that the current legal system does not cover.

The Moroccan Government, not having sight of the private sales contracts drawn up by PL were unaware of the issues which have resulted in the current situation. The Ministry of Tourism have confirmed that they will supervise all future contracts between the developers and clients.

I have passed this to PL and requested a further statement.

Popcorn,

We appreciate, as I'm sure all prospective purchasers do, your thorough diligence on this important aspect of Moroccan law.

Being an English qualified lawyer I can't help but ask what our position would be if the proposed law (to amend RTs to RITs) does not come into effect. Would this mean we would never obtain title to an individual property? In such case who would the title holder be? And what happens to those purchasers who do not wish to "opt-in" to the rental arrangement?

Unfortunately none of the recent correspondence we have received from PL gives any details in this respect.

I'm sure the other forum users would very much appreciate some light being shed on this fundamental point. At the end of the day - no title deeds - you own nothing (in any country!).

I have received the following from my solicitor and would appreciate any comments:


In respect of the latest letter sent by Property Logic in connection with the RT and VVT plots, please find below my comments on it.

The Property is a free hold property, and the clients will acquire a full title on it.
This new law intends to avoid having properties emptied all the year, so they are introducing a formula which is 70/30. Where the 70% will be desirable to be let out with the possibility of the owner to use the property for up ten weeks a year.
The other 30% will be exempted; however it is not clear the apportionment that will be carried out.
There is no obligation to comply with this law, as the property is a free hold property, however a number of tax benefits will be introduced in order to incentive those who wish to enter into the system to let the property out.
It would be vital that the management company is fully controlled by us or people that we trust in order to avoid having any problems in the future
Finally, the cost of running the communal areas is not clear, and once again it would be important to start looking into it as soon as completion approaches.

I myself can't see how any rental pool system can be forced on any owner - assuming we do get title deeds that is - and my solicitor is adamant that we will. We have two villas on VVT8 and intend to use it predominantly for family use - certainly in the first year when rentals will be low anyway. How on earth are the government going to be able to monitor it. Also the management company will need to provide different options as Popcorn has suggested in the poll simply to compete with the other rental companies that are going to open offices in Saidia - both Saffron and Superior are opening offices and I am sure there will be others. My solicitors are seeking further deails on the rental restrictions and I have said I will not be paying the next instalment until they have some sort of written assurance from PLogic. I thought the recent statement that Logic sent out was condescending and still very vague. Has anyone used a French solicitor for this?

Jonkers,

If I might make a suggestion, what you should be focusing on is obtaining the advice of a Morrocan qualified lawyer - whatever a French qualified lawyer makes of the RT or RIT arrangement is of no relevance.

The only French aspect in this transaction is the language of the contract - it is Morrocan law that determines the quality/nature of the title a purchaser obtains.

I agree that the tone of the recent Property Logic letter dated 18 April is condescending and to my mind the content of the letter is highly ambiguous - in effect offering little in the way of real legal comfort.

Whilst I remain positive about Morocco and the development as a whole I canot help but be disappointed by the amateurish attitude of Property Logic in having not sought Moroccan law guidance earlier. Even now they are continuing to negotiate the individual Sale Agreements without the assistance of a qualified lawyer in any jurisdiction (be it French, Spanish, English or Moroccan). Given the overall amount of investment taking place I find this attitude astounding.

Just received this from PL's financial director. It still leaves a lot of unanswered questions - what happens if more than 30% opt out - what are the penalties and will we have to bear them or not. It also doesn't explain why they are currently negotiating with the government re the VVT plots. They also seem to assume that you will either want to enter into a "leaseback" or leave the property empty - nothing about being able to rent yourself. I thought their leaseback properties were RT6 so this is the first time I have heard that term mentioned in relation to the other plots.

I first of all wanted to purchase on Magnum but opted for vvt8 because magnum was always marketed as a rental property and I was advised it was not suitable for personal use. I do know of one person who is to be based there permannently and was able to have a different agreement specified in his contract.

"With regard to the doubts related to the title deeds, I want to profit this letter to clarify the standing laws on the subject.

In the matters related to Saïdia, the Government initiated this process by signing a specific “Convention” between the State of Morocco and FADESA, which contained certain provisions - among which those covering the transfer of the property - which could appear to differ up to certain extent with other existing laws.

However, the wording of the convention fully covered how the property was to be transferred in each subsequent stage of the development (Government->FADESA->Developer->Final Owner) and to clarify further the issue, the convention includes templates for each stage of the development and also for phase of the transfer ("Promises of Sale", and "Sale"). Within those templates the property is always transferred as a freehold - once the requirements established in the promises of sale are fulfilled - and consequently, the full ownership of the property is granted.

The best proof of this is that properties in plots RT-1 “Magnum Club” and VVT-10 “Medina” are near completion now and they will be delivered by mid-summer with their correspondent title deeds.

Regarding the role of the Management Companies, it has been also established in the convention, that developers must put in place such companies for plots qualified as RTs and VVTs. The role of such companies is to administrate the common services and expenses and to manage the rental of those properties of owners that opt into a lease back arrangement.

The Government will impose severe conditions (minimum size and staff, bonds and guarantees, etc) to these management companies in order to guarantee a careful administration of the assets and a proper running of the properties and the facilities.

In any case – and I want to stress this point – clients will be free to opt for the agreement proposed in order to obtain revenue from their investment, or skip the opportunity and maintain their full use of the property purchased. They can also profit from the possibility of staying in some of our other exciting projects if their property is let and providing a steady income.

To further dissipate doubts on issues related to costs and income, it is clear that cost of common facilities, (clubhouses, restaurants, gyms, etc.) will be shared proportionally by all properties and thus all properties will have to assume the service charges.

From an operational point of view, such cost will be directly invoiced to the owners or offset against the revenues obtained by the properties leased if they are part of the rental pool.

We have received some queries on the penalization of properties that are not part of the rental pool, and I also want to stress that common costs will be charged proportionate to the properties, no matter if they are part of the rental pool or if the owners prefer to retain the full use of their property.

As a matter of fact, properties managed by the management company will obtain revenue from rental and thus will most probably be using more the common facilities than properties that are left a part of the year unused. However, common facilities must be properly maintained and kept and it is a decision of the owners whether to use them or not, but in no case unrented properties will benefit from any discount in the service charges for common facilities.

I hope that this information will dissipate your concerns upon RT and VVT status.