Selling a French property: understanding estate agent mandates
PUBLISHED: 12:10 18 August 2017 | UPDATED: 17:14 23 August 2017
If you're selling a French property through an estate agent you will be asked to sign a mandate. These are the crucial things you need to understand before you sign
David Anderson is a solicitor-advocate and chartered tax adviser at Sykes Anderson Perry Limited
What is a mandate?
French estate agents ask sellers to sign a mandate before they will market a property. These are highly technical documents, the implications of which are often lost on even very sophisticated British sellers. The wording used can be subtle and difficult to fully understand. They are often signed in a rush without being studied carefully. Needless to say they are a regular source of litigation.
Is it an exclusive mandate (mandat exclusif) that you are signing?
Mandates can be exclusive (only the particular agent has power to sell the property) or non-exclusive (a number of estate agents can be given instructions to sell the property). An exclusive mandate allows the agent to appoint sub-agents who then report directly to the main agent involved. It also prevents the seller from going out into the market and selling through other agents. The seller has to be careful if any other agents approach him during the specified exclusivity period, as he/she may end up having to pay a commission to the exclusive agent as well as to the other introducing agent. Standard printed contracts usually provide that a fee will be payable whether or not the introduction comes via any agent. Sellers should be careful before signing any exclusive mandate, especially one which gives powers to the agent to sell the property.
Can the agent conclude a sale on your behalf without you signing a contract?
In France, estate agents are typically given a mandate which contains various powers for them to advertise and show the property, and usually includes powers for them to sell the property. This is unusual in the UK where agents cannot usually sign contracts for sale. In order to have the power to sell the property, the estate agent’s mandate needs to expressly state that the agent has the power to conclude a contract. This often appears in standard printed estate agent’s mandates which sellers are invited to sign. In our experience, British sellers rarely read these and fewer still understand exactly what they are signing.
How long does the mandate last?
In Britain, instructing an estate agent means asking the agent to introduce buyers, with the seller being free to dismiss the estate agent. There is no contract to sell the property because the whole matter is understood to be ‘subject to contract’ until a written contract prepared by a solicitor is signed by the seller.
This is not the case in France. The mandate may continue to apply to sales well over a year after it is signed and even after it has been terminated. A dispute can easily result in the sale of your property being frozen for up to five years and a commission becoming payable twice. This is not an area where it is safe for the uninitiated to boldly tread.
How do you terminate it?
There is, in fact, an express law which provides that, after a period of three months from the date of signature of an exclusive mandate, either the seller or the agent can terminate the mandate by notifying the other party at least 15 days in advance by a registered letter. This case shows that you need to know the French rules and follow the procedural requirements carefully to avoid paying a double commission.
If you are involved in a dispute with a French estate agent or want to terminate a mandate, professional advice could save you a lot of money. It is best to get such advice before engaging in any correspondence with the agent, notaire or buyer as this may prejudice your legal position.
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