Thursday, September 15, 2011

Trying to avoid paying agency commission

The rules governing the payment of commission to an agency responsible for selling your French property are strict and offer considerable legal protection to the agent. Confusion sometimes arises where the vendor reserves the right to sell privately (in this case signing a 'mandat simple' with the agency) and is approached by a potential buyer who has been previously introduced by the agent - with the objective of concluding a private deal and avoiding paying the agency commission.

Sales mandates - the document agreed between vendor and agency authorising the latter to market and sell the property - can have an active life of two years. This means that if a potential purchaser, originally introduced by the agency, approaches the vendor and attempts to conclude a private deal, the agency can claim its commission on the sale, according to the terms of the mandate, if this happens within two years of signing the original sales mandate.

In order to protect themselves and avoid any confusion, French estate agents ask potential buyers to sign a form known as a 'bon de visite' to prove that it was they who first introduced to them to the property offered for sale. 

If a potential buyer finds him/herself visiting the property a second time, through a second agency,  they should immediately inform both agencies, to avoid confusion. For their part, vendors should be aware of the legal consequences of trying to avoid paying an agency's commission. French courts invariably enforce the agent's rights in such cases.