Legal Framework for the Delegation of Mandate for Quick Sales
Delegating a real estate mandate between agencies allows a delegating agency to entrust part of the management of a mandate to a delegated agency. This practice, common for complex properties or those located in specific geographic areas, can significantly increase the chances of selling or renting a property quickly. Understanding the legal framework is essential to securing this collaboration between professionals.
An Agreement Between Real Estate Professionals
The delegation of mandate is based on a contractual relationship between two professionals, allowing one agency to entrust another with the responsibility of selling or renting a property. This practice generally serves to broaden the property's visibility on a wider market, or to leverage the specific expertise of another agency—one specializing in luxury properties, or located in a particular region.
What the Law Provides
From a legal standpoint, the delegation of mandate falls under the Civil Code and the Hoguet Law, which governs real estate transactions in France. However, specific rules apply to relationships between professionals: unlike mandates concluded with private individuals, agreements between agencies are not subject to the same formal requirements.
The Hoguet Law does not apply between professionals
The Hoguet Law regulates the activities of real estate professionals, but does not directly apply to transactions between agencies. Unlike a mandate given to a private individual, the delegation between two agencies can therefore be done verbally, without any legal requirement for a written contract.
Verbal Agreement: A Legal but Risky Option
The possibility of concluding a verbal agreement between agencies was explicitly confirmed by the Court of Cassation in a ruling dated January 9, 2019 (no. 17-27841), which specified that the Hoguet Law does not apply between real estate professionals. However, this flexibility carries real risks: a verbal agreement can lead to misunderstandings regarding each agency's responsibilities, the allocation of fees, or the property management arrangements. In the event of a dispute, proving the exact terms of the agreement becomes much more difficult.
Why Favor the Written Word?
Even though the law allows for verbal delegation, formalizing the agreement in writing is strongly recommended. This approach clarifies each party's responsibilities, precisely defines the compensation terms, and ensures greater transparency between the agencies. A written contract provides solid evidence in case of a dispute and protects the interests of both parties involved.
What the Delegation Contract Should Contain
A written agency delegation agreement is beneficial when including several essential elements: complete information on each agency involved, a precise allocation of responsibilities—viewings, negotiation, property marketing—the fee-sharing arrangements, the exact duration of the delegation, and the applicable termination conditions should the need arise. This contractual clarity protects both agencies and reassures the owner, who knows exactly who to contact and which agencies are involved in managing their property.
The Respective Obligations of the Two Agencies
The Delegating Agency
As the holder of the main mandate, the delegating agency retains certain obligations towards the owner: to inform them transparently of the delegation, even if the law does not require formal notification; to supervise the proper execution of the mandate, remaining responsible for its overall performance; and to verify that the delegated agency is acting in the client's best interests, respecting the terms set.
The Delegated Agency
The delegated agency must strictly adhere to the instructions of the mandate and act in accordance with applicable professional standards. It assumes responsibility for managing the tasks entrusted to it—client search, managing viewings, negotiation—and must transmit all relevant information on the progress of the transaction to the delegating agency to ensure complete transparency with the owner.
Fee Sharing
The allocation of fees between the two agencies remains one of the most sensitive aspects of the delegation process. It is generally based on a percentage of the transaction amount, or a fixed sum agreed upon by the parties, depending on the actual work performed by each. This allocation must be clearly defined in the contract to avoid any future misunderstandings. The property owner must also be informed of this allocation in the initial agreement, so they clearly understand that they pay their fees to the delegating agency, which then shares the commission with the delegated agency.
Best Practices for Successful Collaboration
A successful delegation of mandate rests on three pillars: total transparency on responsibilities and the sharing of fees, regular communication between the agencies involved to keep each other informed of the progress of the transaction, and scrupulous respect for the commitments made, the delegated agency must always act in the interest of the owner.
A Legal Practice to Secure in Writing
The delegation of real estate mandates between agencies remains a common and perfectly legal practice, but it must be managed rigorously. While a verbal agreement is possible, a written contract is strongly recommended to avoid conflicts and ensure transparency in the collaboration. By respecting this legal framework and these best professional practices, the delegation of mandates can offer significant advantages to all parties, maximizing the chances of selling or renting a property under the best possible conditions.