Estate agent without written mandate: no compensation possible, even for unjust enrichment

You are an owner in Grasse, you put your house up for sale. An estate agent contacts you, you exchange a few emails, you leave him the keys for a viewing. Eventually, you sell to a friend without going through him. A few months later, you receive an invoice: the agent claims a commission, or failing that, compensation for the work provided. Is this legal? Hundreds of owners ask themselves this question every year, sometimes rightly, sometimes wrongly.

The Court of Cassation, in its judgment of 18 June 2014 (no. 13-13.553), put an end to a clever attempt by estate agents: invoking unjust enrichment (benefiting from a service without paying) to circumvent the requirement of a written mandate. The answer is clear: the mandatory rules of the Hoguet Law (Law no. 70-9 of 2 January 1970) and its implementing decree require a prior written mandate for any intervention by an estate agent. Without this mandate, no remuneration, no compensation, even if the owner has benefited from his services.

This decision is a relief for sellers and lessors, but a warning for negligent professionals. It reminds us that protective formalities cannot be circumvented by general principles of law. In this article, I break down the case, its practical implications, and give you concrete advice to avoid any dispute.

The facts: a story like many others

In 2005, the company SAS Patrimoine Compagnie, specialised in real estate, sought to acquire a building in Juan-les-Pins to resell it in lots. A developer, Mr X, was mandated to find properties. At the same time, SARL Central Immobilier, an estate agency based in Grasse, identified a building owned by SAS Fonta. The agency contacted Patrimoine Compagnie via Mr X, presented the property, and participated in the negotiations.

On 9 November 2006, a preliminary sale agreement was signed between Fonta and Patrimoine Compagnie, at a price of €1,200,000. Central Immobilier had no written mandate from Fonta or Patrimoine Compagnie. The agency nevertheless considered that it had played a decisive role in the sale and claimed a commission of €60,000 (5% of the price) from Patrimoine Compagnie. Following the latter's refusal, Central Immobilier sued Patrimoine Compagnie and Fonta before the Tribunal de Grande Instance of Grasse, on the grounds of unjust enrichment (Article 1371 of the Civil Code, now Articles 1303 et seq.).

The Grasse court dismissed the agency's claim in 2010. Central Immobilier appealed. The Aix-en-Provence Court of Appeal, in 2012, reversed the judgment: it ordered Patrimoine Compagnie to pay €20,000 as compensation on the grounds of unjust enrichment. Patrimoine Compagnie appealed to the Court of Cassation. The case came before the Court of Cassation, which quashed the appeal judgment and referred the parties to the Montpellier Court of Appeal.

The main twist: the Court of Cassation held that the principle of unjust enrichment cannot override the mandatory provisions of the Hoguet Law. In short, even if the seller benefited from the agent's work without paying, the agent cannot claim any sum without a written mandate. A decision that set a precedent and protects owners against abusive claims.

The reasoning of the court — analysed

The Court of Cassation relies on two fundamental texts: Article 6-1 of Law no. 70-9 of 2 January 1970 (Hoguet Law) and Article 72 of Decree no. 72-678 of 20 July 1972. These texts require that any intervention by an estate agent in a property transaction (sale, lease, etc.) is subject to the holding of a written mandate, issued beforehand by one of the parties. This mandate must contain certain mandatory information: duration, remuneration, etc. This is a rule of public policy, i.e. mandatory: it cannot be derogated from by agreement between the parties.

In this case, Central Immobilier had no written mandate from Fonta or Patrimoine Compagnie. The agency nevertheless invoked unjust enrichment, a general principle of law provided for in Article 1240 of the Civil Code (formerly Article 1371): "Any act of a person which causes damage to another obliges the person by whose fault it occurred to make reparation." More specifically, unjust enrichment allows a person who has enriched another without legal cause to obtain compensation. Here, Patrimoine Compagnie had benefited from Central Immobilier's services (presentation of the property, negotiation) without paying anything: the agency considered this to be unjust enrichment.

The appeal judges had followed this reasoning: they awarded €20,000 to the agency. But the Court of Cassation overturned this decision. Its reasoning is as follows: the provisions of the Hoguet Law are of public policy, meaning they prevail over general principles of law, including unjust enrichment. Allowing an estate agent to obtain compensation without a written mandate would effectively empty the law of its substance. The Hoguet Law aims to protect consumers against abusive practices: an agent cannot intervene without a clear contractual framework. If compensation were allowed on another basis, the requirement of a written mandate would become optional.

This decision is not surprising: it confirms consistent case law (see e.g. Cass. civ. 1ère, 12 June 2013, no. 12-17.262). The Court of Cassation is very firm on this point. It reminds us that the right to remuneration of an estate agent is strictly subject to the existence of a written mandate. In the absence of a mandate, the agent cannot claim anything, even if he has done real work. This is an essential protection for owners and sellers.

What this means for you — practically

If you are an owner of a property in Juan-les-Pins, Grasse or elsewhere, this decision protects you. You may be contacted by an agency, agree to a viewing, or even negotiate, but as long as you have not signed a written mandate, you are not obliged to pay anything. Beware: a simple email or verbal agreement is not enough. The mandate must be a signed, dated document with the mandatory information (price, duration, conditions of remuneration).

Let's take a concrete example: you sell your flat in Juan-les-Pins for €250,000. An agent offers his services, you give him the keys for a viewing, but you do not sign a mandate. Eventually, you sell to a neighbour you met at a party. The agent claims €12,500 (5%). Thanks to this judgment, you can refuse. Even if the agent proves that he arranged the viewing, the negotiation, etc., he cannot obtain anything without a written mandate. However, if you had signed a mandate, you would have to pay the commission, unless you can prove that the buyer was not introduced by the agent.

For buyers, the situation is different: you are not bound by a mandate signed by the seller. But if you use an agent to help you find a property, you must sign a search mandate. Without a written mandate, the agent cannot claim fees from you.

For estate agents, the lesson is clear: never neglect formalities. A written mandate, signed before any service, is your only protection. If you intervene without a mandate, you cannot obtain any remuneration, even if your work was useful. Worse: you could be prosecuted for illegal practice of the profession if you act without a mandate.

Four tips to avoid this type of dispute

• Always require a signed written mandate before any intervention. Whether you are a seller or a tenant-buyer, do not let any estate agent act without a proper mandate. Check that the mandate includes the duration, the amount of the commission and the conditions for its payment (for example, only if the sale is concluded with a client introduced by the agency).
• Keep all documents relating to the transaction carefully. In case of a dispute, you must prove that you did not give a written mandate. Keep your emails, your letters, and above all, do not sign anything without reading it carefully. If an agent sends you a mandate by email, do not sign it if you do not agree with the terms.
• Be wary of informal interventions. An agent who offers to "take a look" or "show without obligation" may later claim a verbal mandate. Even though the law requires a written document, some agents try to circumvent the rule. Always reply: "I do not want any service without a written mandate. If you want to work with me, send me a mandate to sign."
• In case of an unfounded claim, do not pay and consult a lawyer. If an agent claims a commission without a written mandate, you are entitled to refuse. Do not give in to pressure. A lawyer specialising in property law can advise you and, if necessary, defend your interests in court. The cost of a consultation is often less than the commission claimed.

Further analysis: related case law and developments

This judgment is part of consistent case law of the Court of Cassation. As early as 2006, the First Civil Chamber held that "an estate agent who does not hold any written mandate cannot claim any remuneration or any compensation" (Cass. civ. 1ère, 4 April 2006, no. 04-14.278). The 2014 decision merely reaffirms this principle, specifying that unjust enrichment cannot be used as a way out.

There is one exception: the agent may claim compensation on the grounds of management of another's affairs (Article 1372 of the Civil Code) if he acted spontaneously and usefully, without a mandate. But the Court of Cassation has restricted this possibility: management of another's affairs requires that the agent did not act in his own interest, which is rarely the case. In the 2014 judgment, the Court did not explicitly exclude management of another's affairs, but it indicated that the mandatory rules of the Hoguet Law prevail. In practice, it is very difficult for an agent to obtain compensation on this basis.

The trend is therefore towards a strengthening of formalities. The courts are increasingly strict on the requirement of a written mandate. Estate agents must therefore be irreproachable in their contractual relationships. For owners, this is an additional security. However, beware: if you sign a mandate, you are bound to comply with its clauses. Never sign a mandate without understanding it.

Checklist before acting

• Have I signed a written mandate with the estate agent? If yes, check the conditions of remuneration. If no, you are not obliged to pay, even if the agent has worked.
• Does the agent have a written mandate from the other party? For example, if you are a buyer, the agent must have a mandate from the seller. Otherwise, he cannot claim a commission.
• What if the agent claims a sum without a mandate? Refuse in writing, citing the Court of Cassation judgment of 18 June 2014. Consult a lawyer if the pressure continues.
• Can I be sued for unjust enrichment? No, according to this judgment. Unjust enrichment cannot be invoked to circumvent the absence of a written mandate. You are protected.
• How can I prove that I did not sign a mandate? Keep your emails, your text messages, any document showing that you did not give a written mandate. If the agent claims to have a mandate, ask him to show it to you. Without a signed original, his claim is inadmissible.

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