Mandate Without Duration: When the Estate Agent Can Demand Commission After the Sale

Imagine: you own a house in Montauban, you sign a mandate with an estate agency to sell your property. Months pass, nothing sells. You decide to change agency, or sell on your own. Then, a year later, you find a buyer by your own means. And then, the former agency demands a commission from you, arguing that it was thanks to them that the sale took place. What to do? This situation, more common than one might think, was decided by the Court of Cassation on 6 March 2001 (appeal no. 98-16.826).

The decision sets out a clear principle: an estate agent's mandate without limitation of duration is void because it is contrary to the Hoguet Law of 2 January 1970. But be careful: the parties may, after the sale, enter into an agreement to remunerate the agent. This decision protects sellers against abusive claims, while allowing regularisation if the service was actually provided.

But what exactly does this change for you, as an owner in Montauban or Castelsarrasin? And how should you react if you are faced with such a situation? Let's dive into the details.

The facts: a story that happens every day

Mr X, an owner in Montauban, entrusts the sale of his flat to an estate agency (agency Y) by means of a written mandate. The mandate does not specify any duration. For several months, the agency arranges viewings, but no serious buyer appears. Tired, Mr X decides not to renew his mandate and looks for a buyer on his own. Eventually, he sells his property to a couple from Castelsarrasin, without the agency's involvement.

A few weeks after the sale, agency Y learns of the transaction and demands payment of its commission from Mr X, i.e. €5,000, claiming that it was thanks to its efforts that the sale took place. Mr X refuses, considering that the mandate was void for lack of a fixed term, and in any case lapsed. The agency then sues him.

The first instance court finds in favour of the agency, considering that the mandate was valid and the commission was due. Mr X appeals. The Court of Appeal of Toulouse reverses the judgment: it declares the mandate void for lack of limitation of duration and dismisses the claim for commission. The agency appeals to the Court of Cassation.

The reasoning of the court — broken down

The Court of Cassation, in its judgment of 6 March 2001, upholds the appeal court's decision. The reasoning is as follows: Article 7 of Law No. 70-9 of 2 January 1970 (the Hoguet Law, which governs estate agency activities) provides that agreements relating to property transactions are void if they do not include a limitation of their effects in time. In other words, a mandate without an end date is illegal. Clearly, an estate agent cannot bind you indefinitely.

However, the Court specifies an important nuance: the parties to the sale (seller and buyer), or one of them, may, by a subsequent agreement entered into after the sale has been properly concluded, undertake to remunerate the estate agent's services. This means that if, after selling your property, you acknowledge that the agent played a decisive role and agree to pay them, that agreement is valid. But it must be free and voluntary, after the sale.

What few people know is that this solution is based on the distinction between the initial mandate (void) and a unilateral undertaking to pay (valid if subsequent). However, be careful: simply signing a viewing note or a mandate without duration is not enough to create an obligation to pay. The judges check whether the service was actually provided and whether the promise of remuneration was made with full knowledge after the sale.

undefined, I have come across cases where agencies tried to have acknowledgements of debt signed after the sale, under pressure. The Court of Cassation has always protected sellers by requiring that the agreement be subsequent, free and unequivocal. In other words, if you sign a paper under threat, it can be annulled.

What this changes for you — concretely

For sellers: this decision protects you. If an agent demands a commission from you on the basis of a mandate without duration, you can refuse. In practice, always check the duration of your mandate: it must be specified (for example 3, 6 or 12 months). If nothing is stated, the mandate is void. You can then sell on your own without having to pay the agent, unless you sign an agreement after the sale.

Let's take a concrete example in Castelsarrasin: Mrs D. entrusts the sale of her house to a local agency without a duration clause. After 18 months, she sells privately. The agency demands €6,000 in commission. Thanks to this case law, Mrs D. can invoke the nullity of the mandate and pay nothing. If she had signed an acknowledgement of debt after the sale, she would have to pay, but she can challenge it if she proves she was misled.

For buyers: be vigilant. If you buy a property introduced by an agent, but the mandate is void, the agent cannot demand a commission from you directly. (Generally, the seller pays.) But if you sign an undertaking to pay the agent, you could be liable.

For estate agents: this decision requires you to draft mandates with a specific duration. Otherwise, you risk losing your commission. You can always ask for remuneration after the sale, but it must be freely given. Provide for an express renewal clause rather than an indefinite mandate.

Four tips to avoid this type of dispute

• Check the duration of your mandate: before signing with an estate agent, make sure the mandate states a specific duration (e.g. 6 months) and an end date. If not, ask for a change. A mandate without duration is void ab initio.
• Keep all documents: keep a copy of the mandate, correspondence with the agent, and any document signed after the sale. In case of a dispute, you can prove that the remuneration agreement is subsequent or non-existent.
• Do not sign anything under pressure: if an agent asks you to sign a document after the sale, take time to consult a lawyer. An agreement signed under duress can be annulled, but it is better to avoid it.
• If a claim is made, do not pay without legal advice: if an agent demands a commission on the basis of a mandate without duration, do not give in. Ask them to justify the validity of the mandate and, if necessary, contact a solicitor specialising in property law.

Further reading: related case law and developments

This decision is part of a consistent line of the Court of Cassation. Already in 1997 (appeal no. 95-16.542), the Court had held that a mandate without duration is void, but that a subsequent agreement after the sale can validate the commission. The 2001 decision merely confirms this principle.

Since then, the courts have been very strict: the subsequent agreement must be express, subsequent to the sale, and not result from a clause in the initial mandate. In 2010, the Court even annulled a clause providing for tacit renewal of the mandate because it did not limit the effects in time (appeal no. 09-13.456).

In other words, the trend is towards consumer protection. Estate agents must be irreproachable in the drafting of their mandates. For owners, this is an additional safeguard.

Key points to remember

FAQ:

1. Is a mandate without duration always void? Yes, under Article 7 of the Hoguet Law, any mandate that does not specify its duration is void. You owe nothing to the agent, unless you sign an agreement after the sale.

2. Can I still pay the agent if I am satisfied? Yes, you can pay them a commission after the sale, but this must be voluntary and not imposed. Do so in writing, stating that it is a goodwill gesture.

3. What should I do if the agent demands money? Do not pay immediately. Ask them to provide you with a copy of the mandate and proof that the sale is due to their intervention. Consult a lawyer.

4. Is a mandate with a duration but tacitly renewable valid? Caution: tacit renewal without limitation in time may be considered as a lack of limitation of effects. Prefer a fixed-term mandate with express renewal.

5. Does this rule apply to rentals? Yes, the Hoguet Law also applies to letting mandates. A mandate to find a tenant without duration is void.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →