Real estate agent: the rules of the profession

The profession of real estate agent is governed by strict rules because it plays a crucial role in the property sector.

The profession of real estate agent plays a crucial role in the property sector, acting as an indispensable intermediary between buyers, sellers and tenants. To ensure the security of transactions and the protection of consumers, strict regulations govern this profession.

In particular, the Hoguet Act imposes precise conditions and obligations, such as holding a professional licence, taking out professional civil liability insurance and complying with written mandates. These elements ensure that real estate agents act with integrity and competence. Understanding these rules is essential not only for professionals, but also for consumers who wish to navigate the property sector with full confidence.

In this article, we will explore the conditions required to practise as a real estate agent, the obligations towards consumers, as well as the remuneration arrangements associated with this profession.

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The conditions required to be a real estate agent

In order to practise as a real estate agent, certain conditions must be met, thereby ensuring the legitimacy and competence of professionals in the sector. Act No. 70-9 of 2 January 1970, often referred to as the “Hoguet Act”, defines these essential conditions. First of all, the real estate agent must hold a professional licence, which is issued by the Chamber of Commerce and Industry (CCI). This licence attests not only to the agent's professional qualifications, but also to their good standing, two essential criteria for ensuring the reliability of intermediation in property transactions.

At the same time, the agent must also take out professional civil liability insurance. This insurance is essential, as it protects clients against any errors or negligence on the part of the agent. In the event of a dispute, this cover ensures that the consumer has financial recourse. It should be noted that the absence of such insurance exposes the agent to penalties and may jeopardise their income.

Another condition is the requirement to establish a written mandate before acting in a transaction. This document, signed and valid, must clearly stipulate the duration of the mandate, the agent's remuneration and the conditions relating to the assignment. Real estate agents must also ensure that all mandatory legal particulars are complied with, in accordance with Article 92 of the implementing decree of the Hoguet Act.

Finally, a further point not to be overlooked concerns the financial guarantee, which the agent must also establish with a banking institution or a professional organisation. This financial security, which serves to demonstrate that the agent manages their funds with full transparency, is essential to inspire confidence in clients.

These conditions, although strict, primarily serve to ensure adequate protection of clients and to maintain the integrity of the property market. In the remainder of this article, we will address the specific obligations of real estate agents towards consumers.

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The obligations of the real estate agent towards consumers

When discussing the obligations of the real estate agent, it is crucial to address the duty of transparency and information, which lie at the heart of the relationship between the professional and the consumer. Indeed, the Hoguet Act, notably through its provisions, underlines the importance for the agent of providing clear and precise information regarding the properties offered, as well as the conditions of the transaction. This includes, for example, presenting the characteristics of the property, its legal status, and the fees and commissions associated with the transaction.

Compliance with the mandate is also a fundamental aspect of this relationship. A real estate agent must ensure that the mandate binding them to their client is duly executed. This mandate, whether for sale or rental, must state the agent's remuneration, which is essential to avoid any misunderstanding when concluding the transaction. Furthermore, it is essential to maintain good communication practices with the client throughout the process, so that the client is kept informed of developments and any changes concerning their transaction.

With regard to professional civil liability, the real estate agent must carry out their activities with appropriate diligence. In the event of fault or negligence, the agent may incur liability for any loss suffered by the consumer. To this end, the professional civil liability insurance that you are required to take out plays a protective role for clients, ensuring them cover in the event of a dispute.

It should also be emphasised that the real estate agent must act with loyalty and impartiality towards their clients. This means that they must not favour one client to the detriment of another and that they must act in the interest of each one, while complying with the legislation in force. Such practices are essential to building a relationship of trust over the long term.

Finally, continuing training is a moral and sometimes legal obligation for real estate agents. In order to ensure that they remain up to date with developments in property regulations, agents must regularly take part in training. This not only enables them to serve their clients better, but also to ensure that their practices comply with the law.

The obligations of real estate agents towards consumers play a genuine role in the proper functioning of the property market. This responsibility towards the client is a solid foundation for trust in transactions. In the remainder of this article, we will examine in greater detail the subject of real estate agents' remuneration and the specific features of the mandate.

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How is a real estate agent remunerated and what are the specific features of the mandate?

The remuneration of a real estate agent is of particular importance, both for professionals and for consumers. It is mainly based on the commission system, which represents a percentage of the sale price or of the rental amount. Under the regulations, real estate agents must inform their clients of the amount of the commissions before any transaction, thereby ensuring essential transparency in the business relationship. This use of commissions is governed by the Hoguet Act, which also specifies that the agent must obtain a written mandate before acting on behalf of a client.

The mandate, which may be non-exclusive or exclusive, is a key document establishing the relationship between the real estate agent and their principal. Under an exclusive mandate, the agent has the exclusive right to negotiate for the property, whereas a non-exclusive mandate allows the principal to entrust the sale to several agents. Implementing Decree No. 72-678 of 20 July 1972 specifies that this mandate must include information such as the duration of the engagement, the agent's remuneration and the conditions for handling funds. It should be noted that every mandate must be signed by both parties, which ensures compliance with the contractual obligations.

The collection of fees must follow precise rules. For example, in the case of a sale, the fees may only be claimed once the transaction has been fully concluded, generally at the time of signing the deed before a notary. The law also imposes ceilings on fees for residential leases, providing that the costs borne by the tenant must not exceed a certain amount per square metre, depending on the geographical area. These remuneration rules are intended to protect consumers from potential abuse while ensuring that real estate agents receive fair compensation for their services.

It is also essential to mention that the real estate agent has a duty to advise, which requires them to ensure the regularity of the transaction. This means that they must verify the validity of the information provided in the mandate, the conformity of the documents relating to the transaction, as well as compliance with the legal obligations that may affect the amount of the remuneration. The Hoguet Act and its implementing decrees reinforce the regulatory framework governing these aspects, thereby ensuring a framework of trust for all parties concerned.

In short, the remuneration of real estate agents, as well as the arrangements relating to the mandate, are not merely financial matters. They also involve legal and ethical considerations that ensure the protection of consumers.