Buyers ordered to pay €150,000 after cutting out estate agent on luxury French Riviera villa
A couple who negotiated directly with a seller after viewing a luxury villa through an estate agent have been ordered to pay €150,000 in damages by France's highest court, the Cour de cassation, which found they acted fraudulently to deprive the agent of commission.
The buyers must also pay €3,000 in additional compensation to the Antibes-based estate agent following the landmark ruling, which overturned two lower court decisions in their favour.
Property initially listed at €3.17m
The dispute centres on a luxury villa in the south of France that was put on the market in 2017 for €3.17 million. The property is located in Antibes, Alpes-Maritimes, where luxury villas typically start around €1.5 million and can reach €20-23 million for exceptional properties.
The estate agent had signed a non-exclusive mandate to handle the sale with a 6% commission rate. Estate agent commissions in France average 5.78% per property sale, significantly above the European Union average of 4%, and typically range between 4% and 8% depending on property value.
By early 2018, the asking price had been reduced to €2.99 million, with the 6% estate agent's fee still payable by the buyer.
Direct deal struck after viewings
In April 2018, the agent arranged for the couple to view the property. They returned for a second viewing two days later, demonstrating serious interest in the purchase.
The following month, however, the buyers signed a preliminary sale agreement directly with the seller for €2.5 million, bypassing the estate agent entirely. In French property transactions, such agreements are known as a promesse de vente, where the seller commits to sell and the buyer receives an option to purchase before proceeding to the acte authentique, the final legally binding deed.
The preliminary agreement initially contained a clause making the buyers liable for any claims from estate agents holding sales mandates for the property. Under French law, estate agents cannot claim commission without a valid written mandate, which must specify duties, duration, commission rates and circumstances under which commission is due.
When the final sale deed was signed on August 29, 2018, references to the buyers being liable for estate agency fees had been removed from the contract.
Agent launches legal action
The estate agent subsequently filed a lawsuit to recover the commission that would have been due on the sale.
Initially, the buyers prevailed in court. Judges ruled there was no contractual relationship between them and the estate agent. They also won on appeal, with the court accepting their argument that they were entitled to negotiate a lower price directly with the seller.
Under French law governing non-exclusive mandates, sellers can list their property with multiple agents or advertise privately. However, estate agents must actively participate in negotiations to be entitled to commission, with courts assessing whether the agent's services were the actual cause of completing the transaction.
Highest court reverses decisions
The Cour de cassation, France's highest court of civil and criminal appeal established during the French Revolution, examines lower court decisions solely on their correct application of law without retrying facts. In this case, it overturned both previous rulings.
The court determined that removing the estate agent clause from the final sale deed demonstrated
a desire to act fraudulently to the detriment of the estate agent's rights.
The buyers were therefore ordered to pay €150,000 in damages, corresponding to the commission the agent lost on the transaction, plus €3,000 in additional compensation.
The estate agent declined to comment when contacted.
