Firm proposes funding renovation of French property for a share of it

A French start-up is offering to finance energy efficient renovations on private homes - in exchange for a share of the property’s ownership rights.

Vasco offers to partly – or fully – cover renovations costs, including those not reimbursed by official schemes such as MaPrimeRénov’, and in return are given a pre-calculated share in ownership of the property.

It is an alternative to ‘traditional’ funding, which co-founder of the group, based in Bordeaux, Hervé Degreve says can be restrictive, or not cover enough of the costs when including government schemes.

“The criteria are not the same as for a bank: we look at the project and its value. We don't finance a customer, but an asset,” he said.

The company, which has already financed three projects, hopes to bring that number to 10 by the end of March 2024 and potentially hundreds throughout the rest of the year.

The cofounder believes there is room for growth across the country in a sector where government funding has been reduced (you can read more about this in the March edition of The Connexion)?

Read more: French renovation firms invented ‘norms’ to con homeowners into work

How does it work?

To gain part-ownership of the property, the company will sign a deed of purchase with you at a notaires (all fees paid for by Vasco), for the amount of the equity on offer.

The deed states the company is a ‘dormant owner’, with the owner keeping total usufruct (right to use) of the home for 10 years.

An example given by Mr Degreve is renovations of €30,000 on a €300,000 property. Vasco would pay this (equalling 10% of the overall value of the property) in exchange for 13% of the rights of ownership.

During these ten years, the owner is free to do any other work to the property they wish, and Vasco cannot intervene.

During this 10-year period, the property owner has the ability to buy back the Vasco shares, or if they sell the property – which is likely to be worth more after the work – Vasco receives a partial amount of this, depending on how much of the property they own.

If neither of these things happen in the 10-year period, the contract is renewed, but for a fee.

Alongside funding by private investors who see potential in the project, there is a €3,000 management fee due from the homeowner customer.

First customers signing up

One of the group’s first customers will be Françoise Mechelaere, who inherited a house from her mother near Paris in 2016.

The property, which is rented out, is rated ‘G’ on the DPE energy efficient index, and the tenant has requested for renovations to be carried out.

A ban on renting ‘G’ rated properties will come into force in 2025.

Read more: Property energy rating system in France eased (a little)

“We're redoing the external insulation, installing a heat pump and changing the radiators, [in the property],” said Mr Degreve.

“The work is estimated to cost around €35,000. With aid from energy supply companies and [the government’s PrimeRénov scheme], the family will be able to deduct around €20,000 in the long run, but they don't have enough resources to pay for everything.

“At first, the idea of no longer owning part of the house bothered us - but if we pay it back within ten years… it seems feasible,” said Mrs Mechelaere to French news outlet Actu.

However, there are some stumbling blocks, and signing contracts can be difficult.

“They [the notaires] want documents that go back a long way and that's blocking the situation,” she added. Once the documents have been signed, work can commence.

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