The Legal Framework for the Delegation of Real Estate Mandate between Agencies
The delegation of a real estate mandate between agencies is an agreement which allows a real estate agency (the delegating agency) to entrust part of the management of a mandate to another agency (the delegated agency). This practice is common in the real estate sector, particularly for properties that are complex or located in specific geographic areas, where collaboration between agencies can increase the chances of a successful sale or rental. But what are the legal aspects that govern this delegation, and what are the best practices to adopt so that this collaboration takes place in the best conditions?
1. The Delegation of Mandate: An Agreement between Real Estate Professionals
The delegation of real estate mandate is based on a contractual relationship between two real estate professionals . This allows a real estate agency to entrust another agency with the responsibility of selling or renting a property. Delegation is often used to expand the visibility of the property in a wider market or to leverage the specific expertise of another agency (for example, an agency specializing in luxury goods or located in a particular geographic region) .
2. The Legal Framework of the Delegation of Mandate
On a legal level, the delegation of mandate is a practice governed by the Civil Code and the Hoguet law governing real estate transactions in France. However, there are specificities in the context of inter-agency relations. Unlike a relationship between an agency and an individual (such as a seller or buyer), agreements between agencies are not subject to the same formal requirements.
2.1 The Hoguet Law and Delegation between Professionals
The Hoguet law regulates the activities of real estate professionals, but it does not apply directly to transactions between real estate agencies. This means that, unlike a mandate given to an individual , the delegation of mandate between two agencies can be done verbally , without legal obligation to draw up a written contract.
3. The Verbal Agreement: A Legal but Risky Option
The possibility of concluding a verbal agreement between agencies is explicitly recognized by the Court of Cassation . A judgment of the Court of January 9, 2019 (no. 17-27841) clarified that the Hoguet law does not apply between real estate professionals , and that it is therefore possible to conclude a delegation of mandate without a written contract . This option offers some flexibility in inter-agency relationships. However, although the law allows it, it carries certain risks.
A verbal agreement can lead to misunderstandings, particularly regarding the responsibilities of each agency , the distribution of fees and the management methods of the property . In the event of a dispute, it will be much more difficult to prove the exact terms of the agreement, which can harm the proper management of the mandate.
4. The Written Agreement: A Recommended Practice to Ensure Clarity
Even if the law allows verbal delegation, it is strongly recommended to formalize the agreement in writing. This approach makes it possible to clarify the responsibilities of each party , to define the remuneration arrangements and to guarantee better transparency between the agencies. A written contract provides evidence in the event of a conflict and protects the interests of both agencies involved.
4.1 The Content of a Delegation Contract
The written mandate delegation contract must include several key elements:
- Information on the agencies involved : name, address, SIRET number, etc.
- The responsibilities of each agency : who manages which tasks (e.g.: visits, negotiation, advertising the property, etc.).
- Fee distribution : how commissions will be shared between agencies, as a percentage or a fixed amount.
- The duration of the delegation : the period during which the delegated agency can intervene.
- Termination conditions : how to end the collaboration if necessary.
This contractual clarity is a guarantee of security for both parties, but also for the owner of the property who will know exactly who to contact and which agencies are involved in the management of their property.
5. The Obligations of the Delegating Agency and the Delegated Agency
5.1 The Delegating Agency
The delegating agency, as the owner of the main mandate, retains certain responsibilities towards the owner of the asset. For example :
- Inform the owner : The delegating agency must, in a transparent manner, inform the owner that the mandate is delegated to another agency, although the law does not require formal notification.
- Supervise the smooth running of the mandate : The delegating agency remains responsible for the proper execution of the mandate, even if certain tasks are entrusted to the delegated agency.
- Check the quality of the work of the delegated agency : The delegating agency must ensure that the delegated agency acts in the interest of the client and respects the terms of the mandate.
5.2 The Delegated Agency
The delegated agency, for its part, must respect the instructions of the mandate and act in accordance with professional standards. She is responsible for managing the transaction within the framework of the tasks entrusted to her, such as searching for potential clients, managing visits or negotiating.
The delegated agency also has the obligation to retransmit to the delegating agency all relevant information concerning the progress of the sale or rental, in order to ensure total transparency towards the owner.
6. Sharing of Fees: Distribution of Commissions
The distribution of fees between the delegating agency and the delegated agency is one of the most important elements of the delegation of mandate. Generally, fees are shared according to a percentage of the transaction amount or a fixed amount agreed between the parties.
It is essential that this distribution is clearly defined in the delegation contract. This helps avoid misunderstandings and disputes regarding remuneration. The commission is generally divided according to the work provided by each agency: if the delegated agency takes over certain tasks (for example, managing visits), it will receive a proportionate share of the fees.
The owner of the property must also be informed of this distribution in the mandate contract, so that it is clear to him that he will pay the fees to the delegating agency, but that the latter will share the commission with the delegated agency.
7. Best Practices for Successful Collaboration
For a delegation of mandate between agencies to be successful, several good practices must be followed:
- Transparency : Each party must be perfectly clear about their responsibilities and the fees to be shared.
- Regular communication : Effective collaboration requires good communication between the agencies involved. It is essential to keep each other informed of developments in the transaction.
- Respect of commitments : A delegated agency must respect the mandate given and act in the interest of the owner while respecting the terms of the contract.
The delegation of real estate mandates between agencies is a common and legal practice, but it must be managed with care. If a verbal agreement is possible, a written contract remains strongly recommended to avoid conflicts and guarantee the transparency of the collaboration. By respecting good legal and professional practices, this collaboration can offer significant advantages, not only for agencies, but also for owners, by maximizing the chances of selling or renting their property.
Follow “ ProtesiseDeCharme.com ” on YouTube Facebook Twitter LinkedIn Instagram Pinterest
Read our articles in this file Delegation of mandate between real estate agencies:
- Delegation of Mandate between Real Estate Agencies
Read the article - Understanding the Delegation of Real Estate Mandate between Agencies
Read the article - Why Delegate a Mandate to Another Real Estate Agency?
Read the article - The Legal Framework of the Real Estate Mandate Delegation
Read the article - The Advantages of Mandate Delegation for Agencies and Owners
Read the article - Should the Owner of the Mandate Delegation be Informed?
Read the article - How to Manage the Sharing of Fees in the Delegation of Mandate?
Read the article - How to Collaborate Well Between Agencies for a Successful Mandate Delegation?
Read the article - Mistakes to Avoid When Delegating Mandates Between Agencies
Read the article - Key tips for successful delegation of mandate
Read the article
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.
