real estate agent
REAL ESTATE TRANSACTION AGENT:
Historically, it is the "Hoguet" law of January 2, 1970 (law n° 70-9 N° Lexbase: L7536AIX) which came to regulate the activities relating to certain transactions relating to buildings and businesses, and essentially aims real estate agents. As a real estate professional, the real estate agent must, in order to exercise his activity, fulfill certain conditions required by law. This covers certain transactions relating to buildings and goodwill carried out by natural or legal persons who habitually engage in or lend their support to transactions relating to the property of others relating in particular to:
- the purchase and sale of buildings, the conclusion of building rental contracts;
- the purchase, sale and rental of businesses;
- the subscription, purchase, sale of shares or units in real estate companies;
- the purchase or sale of non-negotiable shares when the corporate assets include a building or a business;
- property management.
However, article 2 of the law provides that it does not apply to lawyers "for the operations which they are regularly authorized to carry out within the framework of the regulation of their profession" in consideration of the control which their professional activity subject as well as the financial guarantees they offer for the exercise of this activity.
France is not the first to have allowed its lawyers to exercise this activity: in Belgium, Denmark, Spain or the Netherlands, this activity is, sometimes for more than ten years, accessible to other professions (other than real estate agents) and in particular to lawyers. It is naturally the same in Common Law countries, where solicitors have a much broader activity than French lawyers, or in the United States, since in the majority of States, the lawyer is authorized to exercise the activity of real estate mediation without having a real estate agent's license.
On April 21, 2009, it was the Council of the Order of the Paris Bar who first came to specify the procedures for the intervention of the attorney-at-law in real estate transactions by adopting a new article P .6.2.0.4 as well as appendix XV of the rules of procedure of the Paris bar. The Conseil national des barreaux considered, on February 5 and 6, 2010, that this mission of agent in real estate transactions falls within the scope of activity of lawyers.
Can a lawyer receive a mandate to search on behalf of a client for a buyer or a seller, more generally a co-contractor, and to negotiate the conclusion of the legal act that is the subject of the mandate? To answer this question, the CNB took an opinion, adopted in the general meeting of February 6, 2010, in order to recall the limits of the intervention of the lawyer due to the accessory nature of this activity within the framework of a mandate entrusted to the lawyer by his client. This activity fits perfectly, according to the CNB, within the framework of those described and marked out by the national internal regulations (Lexbase No.: L4063IP8). Indeed, article 6.3 of the RIN provides that the lawyer may receive a mandate to "negotiate, act and sign in the name and on behalf of his client".
The lawyer can therefore exercise the activity of agent in real estate transactions within the limits authorized by law (sale of real estate). But he must declare it to the Order by letter addressed to the President of the Bar. This activity must be carried out with a view to drafting a contract or preliminary contract and constitutes an ancillary activity for the lawyer. In this regard, the lawyer must open a special sub-account at the Carpa to accomplish his mission as "agent in real estate transactions" subject to the control of the Order.
In his activity as agent in real estate transactions, the lawyer remains bound to respect the essential principles of his profession and the rules of conflict of interest; he may only act for one of the parties and will only receive fees from that party.
Exercise as an accessory. Article 111 a) of the decree of 27 November 1991 (decree no. 91-1197 Lexbase no.: L8168AID) provides that "the profession of lawyer is incompatible with all activities of a commercial nature, whether exercised directly or by an intermediary". This text does not prohibit the lawyer from acting as an agent in transactions. However, it prohibits it from exercising this activity, if its conditions and methods of exercise give it a commercial character. Such is not the case if the activity of agent in transactions remains an ancillary activity exercised by virtue of a mandate of a civil nature. The lawyer can only accept the mandate to seek for a client a purchaser of a property or a property for his client and to negotiate this transaction only if this mission is incidental to a main mission: assistance of his client within the framework of a litigation (settlement of the property consequences of a divorce or an inheritance, for example), analysis of the situation with a view to providing advice (professional, property, tax audit, creation or transfer of a business, etc. ), or drafting of deeds. This implies that he can only act for one of the parties to the planned transaction and excludes any brokerage activity that would make him fall into commerciality.
Warrant required. As provided for in article 6.3, paragraph 2, of the RIN, the lawyer intervening as an agent in transactions must first sign a written mandate with his client. The mandate must determine the nature, the extent, the duration of the mission of the lawyer, the conditions and methods of execution of the end of this one. The mandate must specifically provide for the terms of the lawyer's remuneration. This can only be the sole responsibility of his client.
Respect for the essential principles. A lawyer who practices as a transactional agent must respect the essential principles set out in article 1.3 of the RIN.
The publicity necessary for the proper execution of the transaction mandate may be made inside the firm or outside it by the publication of announcements, in particular on the website or by signs. However, posting in a display window forming a shop front is prohibited. The creation of groups intended to pool resources allowing better dissemination of information on offers is permitted, but it must be brought to the attention of the Bar Association(s) concerned, the statutes or regulations having to be filed there. The publicity made to offers for the purchase, sale or rental of goods, the transaction of which has been entrusted to the lawyer, must have as its sole object the transaction concerned.
Liability incurred. On the basis of the rules recalled above, the liability that the lawyer may incur when exercising the activity of agent in real estate transactions is multiple. He can first of all engage his civil liability under common law -contractual or tort-. Indeed, under the terms of his mandate, the lawyer is contractually responsible with regard to his client. Moreover, as noted by Maître Chantal Meininger-Bothorel, during a point presented to the Council of the Order of the Paris Bar in April 2010, the lawyer must, in addition, to his client a material accompaniment: realization a legal or technical audit of the property, organization of visits, search for credits, etc. He also needs "a legal certainty distinct from that due in terms of drafting deeds since he has here a double obligation to inform and control". The obligation to inform is, here, classic: the lawyer has the duty to inquire in order to inform his client. The obligation of control, according to Maître Meininger-Bothorel, is broader because as an agent in real estate transactions, the lawyer will have to verify the capacity, the consent and the power of the parties, as well as the conformity of the property with its designation. , the possible existence of a prefectural ban or the solvency of the purchaser, etc.
In addition to his civil liability, the agent lawyer may see his disciplinary liability engaged, in the event, of course, of the violation of professional secrecy or of the ethical provisions inherent in the profession (violation of the rules of conflict, act of canvassing, etc.)
What is the mission of the agent lawyer in real estate transactions?
The lawyer is there to advise you and guide you in your best interests in the purchase, sale or even rental of your property. He will be present at all stages of the transaction in order to better secure it.
For this he will be present to help you with the legal and financial consequences in the purchase of your property.
Thus, your lawyer will be present to accompany you during a possible succession of heritage to help you sell your property at the best price while being present during the settlement of your succession.
In addition, your lawyer will accompany you during a divorce by the amicable sale of common property during a sale by auction. Indeed, the Firm can help you with the formalities for the judicial sale of your common property or if a disagreement remains between the parties in order to find a solution of appeasement.
In short, and you will have understood it, the lawyer is present to assist you throughout the process of selling or buying your property by putting potential buyers and sellers in touch with each other, directing the negotiations for the sale, carrying out the visit the property and inform the buyer and the seller of the content and consequences of the promise of sale and the deed of purchase that he will draft.
The need for a written mandate: an activity incidental to his activity
To accomplish his mission, the lawyer must first ensure compliance with the ethical rules governing this activity.
Thus this activity can only be the related activity of the main activity of assistance and representation of the lawyer.
Indeed, the lawyer is not a real estate agent and his job remains that of defending the interests of his clients, however he may be required during his activity to help his client to sell or rent a property within the framework of its activity.
For this he remains subject to the drafting of a written mandate which details the entirety of his intervention and in particular:
The precise identification of the customer:
The definition of the mission (research, negotiation, advertising conditions, signature limits or not)
The identification of the property
The conditions of the planned operation (transfer price, negotiation, etc.)
Accountability (how the lawyer must justify his actions with his client)
The lawyer's remuneration (amount and terms)
The duration, terms of termination and consequences
• He is a lawyer first and foremost, who will support his client in the negotiation and drafting phases of deeds in the context of a real estate transaction.
• His intervention in a real estate transaction is always mainly legal: he assesses the operation legally, gives legal and tax advice and assists in the drafting of legal documents.
• On an ancillary basis, the lawyer will carry out an intermediary operation between his client and the contracting party, like other real estate professionals.
• The lawyer can, in his accessory mission of intermediation, ensure on your behalf the search for a contracting party whatever the type of real estate transaction envisaged: the purchase, the sale, the taking or the renting of property for residential, professional or commercial use.
Is a real estate transaction attorney a real estate agent?No.
• The profession of agent lawyer in real estate transactions differs from that of real estate agent.
• The lawyer advises and assists his client legally when he plans to carry out an acquisition, sale or rental transaction with a partner to be sought, which the real estate agent does not do, who carries out a simple transaction of intermediary.
• The attorney-at-law also carries out his mission within the framework of specific ethical obligations such as independence and professional secrecy, to which real estate agencies are not bound.
• The attorney-at-law is required to comply with the rules of conflict of interest and can therefore only act for his client and only receives fees from him, unlike real estate agencies.
• Why use a real estate transaction lawyer?
• Its added value is mainly legal.
• The agent lawyer will legally secure his client's transaction, in addition to his ancillary mission of intermediation.
• In practice :
- Do you want to sell your business or your right to lease?
• The real estate transaction lawyer will carry out a legal, fiscal and social audit of the planned transaction and will advise you on the terms and consequences thereof.
• Once this preliminary audit has been carried out, he will be responsible for looking for a buyer by carrying out, under his responsibility, visits to the property and collecting offers.
• He will finally draft, alone or as joint drafter with the purchaser's counsel, the drafting of legal acts, independently and impartially.
• - Do you want to sell your apartment?
• You can entrust the real estate transaction lawyer with the mandate to find a buyer for you.
• He will then carry out the operation from start to finish: meeting and transmission of the mandatory documents, search and selection of candidates, advertisements and visits to the property, negotiation of the purchase offer with the buyer, if applicable , drafting of the promise of sale.
• If the drafting of the final deed falls within the competence of the Notary, the intervention of a Lawyer is nonetheless useful insofar as he will provide you with advice and assistance.
• You will thus have a single point of contact in all phases of the operation.
• Do not underestimate the importance of the legal and fiscal aspect that a real estate sale can have: the exact determination of the legal characteristics of the building sold in terms of town planning, environment, right to build, conditions of the sale when the property depends on an inheritance or conventional joint ownership, the qualification with regard to the matrimonial property regime of the seller, the tax regime of the sale, transfer duties and the consequences in terms of capital gains, are all questions you need to have addressed before embarking on a real estate sale.
• The real estate transaction lawyer is there to advise and assist you.
• How much does a real estate transaction lawyer cost?
• A written mandate is signed beforehand with the client which will define the nature of the main legal mission of the lawyer, the terms and conditions of the operation, the amount and method of remuneration of the lawyer, as well as the duration of its mandate.
• The fees of the agent lawyer in real estate transactions are freely negotiated with the client but in practice they represent a percentage of the value of the property.
• If the transaction is not concluded, the lawyer may only receive fees for any advice and deeds drawn up.
