Should the Owner of the Mandate Delegation be Informed?
In property management, transparency and communication are crucial, especially when it comes to delegating mandates between agencies. Delegating mandates allows a real estate agency to transfer certain responsibilities related to managing a property to another agency, while retaining overall responsibility for the mandate. However, this inter-agency collaboration raises a key question: Should the property owner be informed of the delegation of mandate?
This article explores this issue, addressing the legal and ethical aspects of communication between agencies and the owner, while highlighting best practices for maintaining transparency and mutual trust.
1. Understanding Real Estate Mandate Delegation
Before addressing the issue of communication with the property owner, it's important to understand what a real estate mandate delegation entails. A mandate delegation is a contractual agreement that allows a real estate agency (the delegating agency) to transfer some of its responsibilities to another agency (the delegated agency). The delegating agency retains overall control of the mandate, but the delegated agency handles specific tasks, such as marketing the property, managing viewings, and negotiating with potential buyers.
This practice is common in the real estate sector, as it allows for increased visibility of a property, use of the resources of other agencies, and optimization of the management of complex mandates or those located in specific geographical areas.
2. The Importance of Transparency in the Delegation of Mandate
2.1 The Relationship of Trust with the Owner
One of the keys to success in selling or renting a property lies in the relationship of trust between the agency and the owner. This relationship is based on clear and honest communication between the parties. In this respect, the delegating agency has a moral responsibility to its client, the owner, to provide them with all relevant information regarding the management of their property. Transparency is a fundamental principle that must not be overlooked, especially in the context of delegating a mandate.
When a delegating agency entrusts certain responsibilities to another agency, it is legitimate for the owner to know who to contact for the various stages of property management. Informing them of this collaboration ensures they can follow the progress of their case clearly and unambiguously.
2.2 A Legal or Ethical Obligation?
From a legal standpoint, the question of informing the property owner largely depends on the agency agreement signed with the delegating agency. In principle, the law does not explicitly require the delegating agency to inform the owner of the delegation of the mandate. However, several ethical practices and the rules governing the real estate agent profession encourage transparency.
Article 6 of the Hoguet Law , which governs the activities of real estate professionals in France, stipulates that agencies must act with loyalty and transparency towards their clients. Even though the law does not explicitly state that the property owner must be informed of the delegation of mandate, it seems reasonable, in good faith, to inform them , especially when this could influence the management of their property.
However, industry practices, particularly those of prestigious real estate agencies, often require transparency , including informing the property owner of any external collaboration. This helps avoid ambiguity and maintain the relationship of trust necessary for a successful transaction.
3. Reasons for Informing the Owner of the Delegation of Mandate
3.1 Respect the Owner's Trust
Informing the property owner of the delegation of authority demonstrates fundamental respect: keeping them informed of the key stages in the management of their property. Indeed, when an owner entrusts a property to an agency, they expect their agent to make all decisions on their behalf. However, when another agency is involved, they may feel excluded from the process. Informing them of the delegation allows them to feel involved, thus strengthening their trust in the agency.
3.2 Managing Owner Expectations
The owner of a property, especially a high-value or prestigious one, needs to be fully informed about how their property is being managed. By informing them of the delegated mandate, the delegating agency allows the owner to manage their expectations . For example, if there are differences in how the two agencies will manage the property, the owner can be better prepared for any situation that might arise. Furthermore, it helps them know who to contact for any questions regarding the property, whether it concerns viewings or negotiations.
3.3 Ensure Continuous and Consistent Communication
Informing the property owner about the delegation ensures consistent communication between all parties involved. If the owner is aware of the collaboration between agencies, they will easily understand who makes which decisions and from whom they can obtain information at any time. This reduces the risk of confusion or misunderstandings, particularly in the event of a conflict between agencies or if a question arises regarding the property's management.
3.4 Fostering a Better Customer Experience
Transparency in managing mandates also contributes to improving the overall client experience. As a property owner, knowing exactly who is responsible for what, and who to contact for each aspect of managing their property, gives them a sense of control and satisfaction . This type of well-maintained professional relationship can enhance the agency's reputation, foster owner loyalty, and potentially generate referrals and future business.
4. When and How to Inform the Owner of the Delegation of Mandate?
4.1 Upon Signing the Mandate Agreement
The issue of informing the property owner should ideally be addressed at the very beginning of the contractual relationship, when the management agreement is signed . At that time, it is crucial to have a transparent discussion with the owner and explain the conditions under which the delegation could take place. This will allow for clear expectations to be established from the outset and prevent any misunderstandings in the future.
4.2 In Written or Verbal Form?
Although the law does not require formal written notification , it is always best practice to inform the property owner of the delegation of mandate in writing, either by letter or email , which can then be added to their file. This approach ensures traceability and formalizes communication between the delegating agency and the owner. Such written notification provides the owner with a clear overview of the agencies involved in managing the property and the responsibilities of each.
4.3 Maintain an Open Dialogue Throughout the Mandate
Information regarding the delegation of mandate should not be limited to the signing of the contract. It is important to maintain open communication throughout the entire sales or rental process. The delegating agency must continue to keep the owner informed of key milestones, viewings conducted, and feedback received by the delegated agency.
5. The Risks of Poor Communication
A lack of information regarding the delegation of mandate can lead to legal and ethical issues . If the owner discovers that another agency has been involved without their knowledge, it can damage the relationship of trust and even result in complaints or requests to terminate the mandate. Poor communication can also make it more difficult to manage the owner's expectations, which can negatively impact the overall client experience.
The question of whether to inform the property owner of the delegated mandate is crucial from both a legal and ethical standpoint. While the law does not explicitly mandate this, it is in the delegating agency's best interest to maintain clear and transparent communication with the owner. By informing them of the delegation, the agency ensures better management of client expectations, strengthens the relationship of trust , and guarantees a positive client experience . For real estate agencies, this commitment to transparency is not only a sign of professionalism but also a key factor in maximizing the chances of success in the sale or rental of the property.
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Read our articles in this file Delegation of mandate between real estate agencies:
- Delegation of Mandate between Real Estate Agencies
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These links will allow you to provide a complete and fluid reading on the subject of delegation of mandate between real estate agencies, covering all the essential aspects.
