Friday, January 7, 2011

New rules for French estate agents

The French government has introduced new leglisation, applicable from 01 January 2011, concerning the receipt of client funds by registered estate agents. In addition to declaring 'sur l'honneur' that they do not intend to receive client funds, agents electing for this option will have their carte professionnelle marked accordingly. The form of wording will be 'non-détention de fonds' as well as 'absence de garantie financière' as appropriate.

French estate agencies which accept funds from clients - such as the traditional 10% deposit paid by the buyer when making an offer on a property - are required to provide guarantees and insurance cover for the amounts likely to be received, and to display a certificate at their premises indicating the name of their insurers, the sum insured and the policy reference number.

Many agencies choose not to accept client funds, and in this case any monies paid on account - such as the purchase deposit noted above - by a client, are instead paid to the Notaire appointed to handle the transaction,  and held in their special sequestered client account, to which the balance of the purchase price will eventually also be transfered.

The new legislation helps to distinguish clearly between agencies authorised to receive deposits and those which are not. The French estate agency sector is already highly controlled by legislation and licensed by the regional Prefecture, and the new rules offer an additional safeguard for clients using their services.