Goldwin Law Firm has the expertise and technical know-how to support estate agents in the success of their agency. Our real estate lawyers become the essential partners of a real estate agency to secure professional risks and resolve real estate disputes. A lawyer for an estate agent drafts the necessary documents and contracts, and advises on a day-to-day basis and in litigation when necessary.
Real estate professionals operate in a complex and evolving legal system. Our law firm has expertise not only in property law, but also in employment law, commercial law and business law. This enables us to advise estate agents at every stage of their life, in Paris and elsewhere:
- Setting up the estate agency: choice of legal status, registration, application for a professional licence, registration of brand name and logo, acquisition of existing business, etc.
- Drafting of the necessary documents: sale mandate, rental mandate, search mandate, property management and administration mandate, promise of sale and preliminary sales agreement.
- Drawing up employment contracts for the estate agency’semployees and managing employment law disputes before the industrial tribunals. Drafting of sales agent contracts.
- Day-to-day advice on communications and personal data protection (RGPD).
- Real estate agents’ liability in tort and delict.
A lawyer for setting up an estate agency
Estate agents can operate under a variety of legal forms. Alongside traditional companies with offices, 100% digital estate agencies are emerging. Sole proprietorship or commercial company? Employees or freelance negotiators? Independent agency or franchise? Setting up an estate agency from scratch or acquiring a business? The support of a property lawyer is invaluable in helping you to answer all these questions.
A property lawyer will examine the various legal statuses to find the one best suited to your project. He or she will then draw up all the documents you need to register your company and secure your business.
Before signing any mandate with a first client, the estate agent must be in possession of his professional card or T card. Failure to do so can result in a fine of €7,500 and 6 months’ imprisonment.
Estate agency mandates
Drawing up mandates for estate agents
When you start up as an estate agent, you prepare a large number of documents: sales mandates, rental mandates, search mandates, management mandates, etc.
A lawyer specialising in contract law can help you draft your initial mandate models. This expertise is backed up by comprehensive information on :
- the prohibited clauses in each legal document,
- the clauses that you can modify/add to suit your clients,
- the legal consequences of different clauses.
There are different types of real estate sales mandate to master:
- simple mandate : the estate agent competes with other agencies to sell the property. It’s a race against time, because only the agent who signs the mandate earns commission. As estate agents’ commissions vary, the same property may appear on different property websites at different prices, which can devalue the property in the eyes of a potential buyer.
- exclusive mandate: the estate agent negotiates a period of exclusivity during which he or she is the only person who can sell the property. This allows them to take their time, check the buyer’s financial capacity and their genuine desire to buy the property.
- semi-exclusive mandate: the owner retains the option of selling the property without being able to offer it to other estate agents.
- co-exclusive mandate: the seller cannot sell the property himself and entrusts this operation to several agencies.
In all cases, the mandate must be in writing and signed! There are a number of compulsory details that must be included if the estate agent’s mandate is not to be declared null and void. For example, the identity of the seller and his profession, or the identity of the sellers in the case of joint ownership or sale by a couple. In addition to their name, estate agents must give the number of their T card, the number of the body that issued it and the number of their professional financial guarantee.
Acting to invalidate an estate agent’s mandate
The Hoguet Act provides for 35 cases in which an estate agent’s mandate may be declared null and void! This means that it is absolutely essential that the mandate is drawn up by a lawyer who is an expert in property law. Every estate agent knows that they must have a professional licence. But this can become a source of difficulties when the name of the agency changes or the agency is transformed! Another frequent oversight concerns the failure to anticipate renewal. The person negotiating must hold an authorisation certificate requested by the estate agent who holds the T card.
Other sources of contestation of a mandate arise from failure to comply with the substantive or formal conditions required. For example, the requirement for a written document, fixed or determinable fees, limited duration, etc. In return for exclusivity, the mandate must specify the means used to secure the sale. In addition, the mandates are recorded in a register without erasures or overwriting.
If a negotiator who signs a mandate fails to specify his name and capacity (sales agent, salaried negotiator, etc.), the mandate is null and void. The nullity of the sales mandate deprives the estate agent of his commission. The Court of Cassation reiterated this requirement in a decision dated 12 November 2020.
Ongoing training for estate agents can also include legal training to update their knowledge.
Drafting other estate agency documents
The same applies to the drafting of model promises to sell and preliminary sales agreements. This initial drafting is accompanied by detailed information on the consequences of any changes made to the documents.
Similarly, employment contracts for employees and property negotiators can be drafted with the help of a lawyer. The choice between salaried or self-employed status is made with all the facts in hand.
Self-employed sales agents are expanding in the property sector thanks to a number of networks. Their legal status is that of a commercial agent, registered with the Registre spécial des agents commerciaux (RSAC). They do not hold a T card and act on behalf of an estate agent. As such, they can become micro-entrepreneurs, which an estate agent cannot do. What about liability? Commercial agents are liable to their principals. Third parties cannot therefore hold the commercial agent contractually liable for breaches of contract. The commercial agent is only liable to third parties if he personally commits a fault outside the performance of his mandate.
An estate agent who is overly prescriptive towards an independent sales agent may see the latter’s mandate requalified as an employment contract.
The liability of estate agents
Estate agents are regulated by the Hoguet Act of 2 January 1970. Their activities may give rise to civil and criminal liability. Given the large sums of money involved in the property business in Paris and elsewhere, professional insurance is compulsory to cover legal risks.
Contractual liability towards the principal
Real estate agents conduct their business by signing a sales, rental or search mandate. Their liability largely depends on the terms of the mandate they sign. This is why it is so important for the mandate to be properly drafted by a property lawyer. Estate agents are bound by an obligation of means, not of result. They will be liable for any errors or negligence committed in the performance of their duties that cause harm to their agent, the owner or lessor.
Here are a few examples of misconduct and negligence for which an estate agent may be held liable. The courts have held that an estate agent must check the solvency of a tenant or guarantor as part of a mandate to rent a property. However, the estate agent cannot be held responsible for the behaviour of the tenant, particularly in the event of damage to the property. The courts examine the responsiveness of the estate agent in the context of a rental management agreement. For example, an estate agent who fails to act when the first rent arrears occur may be liable to the landlord.
When it comes to drafting deeds, the estate agent’s liability is greater, unless he simply adapts models. The estate agent’s lawyer will therefore suggest appropriate documents and advise his client on the formal and substantive requirements for usefully supplementing compromises, contracts and other documents.
It is above all on the basis of the estate agent’s obligation to provide information and advice that disputes arise. As professionals, estate agents have a general obligation towards their private and non-professional clients.
Criminal liability of estate agents
Estate agents do not necessarily have a mandate with all parties involved. For example, in the case of a sale, they have a contractual relationship with the seller. They may be liable in tort to potential purchasers of the property. As a property professional, you must assure the various parties involved that the transaction is secure. For example, making sure that the seller is the actual owner of the property!
Article 2224 of the French Civil Code states that any action to hold an estate agent liable lapses 5 years from the date on which the holder of a right knew or should have known of the facts enabling him to exercise it.
Proceedings against an estate agent
Whatever the dispute the estate agent is facing, the first solution is to attempt amicable conciliation with the dissatisfied third party. If this fails, a formal notice from the estate agent triggers the litigation phase. This is accompanied by a declaration to the clerk of the relevant court. If this fails, the dispute may be referred to the courts to settle.
A property lawyer is essential if you are to defend your interests to the best of your ability. Property and rental management law is complex, and new rules are frequently introduced. You can build a solid defence alongside a lawyer who is an expert in property law.
Property lawyer
You may have heard of property agents. This is a special role that has been available since the Hoguet Act of 2009. Lawyers can now act as property agents. Their role is to organise and secure all property transactions.
The Conseil de l’Ordre stipulates that this real estate activity is carried out on an ancillary basis. Very useful in cases of inheritance or complex divorce proceedings, the property agent lawyer can settle all the problems involved in dividing up property assets. For clients, this is a guarantee of security and confidence: there is no longer any need to interact with several different people (estate agent, notary, lawyer). With an overall view of the case, we can provide consistent expertise, both in terms of advice and, if necessary, litigation.
If a client does not wish to handle a property transaction personally, they can sign a mandate with their lawyer. The lawyer then takes charge of all stages of the sale or purchase of a property on behalf of the client. Subject to all the obligations of the Code of Professional Conduct, the lawyer advises and assists his clients and puts all his technical expertise and experience at the service of his clients’ interests.
Why choose the Goldwin law firm?
Maître Bellaiche and his team advise many property professionals in their business. Experts in real estate law, but also in employment law and business law, the firm offers cross-disciplinary skills to manage the legal risks inherent in a real estate agency. Our lawyers, who are members of the Paris Bar, have a thorough understanding of the issues involved in rental management, property transactions and setting up a business. Our firm is the real estate agent’s lawyer, helping every agency to succeed. Our expertise also makes us a sought-after lawyer for Parisian landlords and tenants alike.
