Estate Agency Mandate Void After Tacit Renewal: A Simple Letter Is Not Enough to Revive It

You signed a sale mandate with an estate agent for three months, renewable by tacit renewal. Months pass, the agent finds no buyer, you forget the mandate. A year later, you write a simple letter to the agency to revive the collaboration, and suddenly a preliminary sale agreement is signed. The agent claims commission. But is this mandate still valid? In Saint-Paul-lès-Dax as in Tarnos, this question troubles many property owners. The answer is clear: the Court of Cassation held, in a judgment of 4 November 1986, that a mandate renewable indefinitely by tacit renewal is void at the end of its first term. And a simple letter cannot resurrect it. Analysis of a decision that protects owners against undue commissions.

The Facts: A Story Like Many Others

Mr X, owner of a house in Saint-Paul-lès-Dax, gave an exclusive sale mandate to an estate agency on 28 August 1979 for a period of three months, renewable by tacit renewal for an indefinite period. The mandate provided for a commission of 5% of the sale price. No buyer came forward during the first three months. The mandate was therefore tacitly renewed. In August 1980, Mr X wrote a simple letter to the agent confirming the continuation of the mandate. On 29 August 1980, a preliminary sale agreement was signed between Mr X and buyers, Mr Y and Miss Z. The sale did not materialise. The estate agent then sued Mr X for payment of his commission, claiming that his intercession had led to the signing of the preliminary agreement. The seller resisted: in his view, the mandate had been void since 28 November 1979, the expiry date of the first three-month period. The Court of Appeal agreed with him. The agent appealed in cassation.

The Reasoning of the Court — Analysed

The Court of Cassation dismissed the estate agent's appeal. It confirmed that the sale mandate of 28 August 1979, renewable by tacit renewal for an indefinite period, was void as from 28 November 1979. Why? Because Law No. 70-9 of 2 January 1970 (known as Loi Hoguet) and its implementing Decree No. 72-678 of 20 July 1972 require that estate agent mandates be concluded for a fixed term. A clause providing for indefinite renewal by tacit renewal circumvents this legal requirement and renders the mandate void from the outset. Next, the Court examined the letter written by Mr X on 29 August 1980. According to the agent, this letter constituted a new mandate or a confirmation of the old one. But the Court replied: a simple letter can neither revive a void mandate nor constitute a valid new mandate, because such a mandate must comply with the formalities imposed by the Loi Hoguet: writing, fixed term, mention of fees, etc. In this case, the letter satisfied none of these requirements. The decision is part of consistent case law: courts protect principals against abusive automatic renewal clauses. It reminds us that the protective formalism of the Loi Hoguet is of public policy, meaning that it cannot be derogated from by a simple verbal agreement or informal writing.

What This Means for You — Practically

If you are a seller: you can challenge a commission claimed by an agent on the basis of an indefinitely renewed mandate. For example, in Tarnos, an owner had signed a six-month mandate with tacit renewal. The agent had not sold anything for a year, then a follow-up letter from the owner led to a sale. The agent claimed €8,000 in commission. Thanks to this case law, the owner could refuse to pay, because the initial mandate was void after six months, and the letter did not constitute a new mandate. If you are a buyer: you are not directly concerned, but know that if the agent claims a commission from you (for example, in case of withdrawal), he must prove that his mandate was valid. If you are an estate agent: be careful! A mandate with indefinite tacit renewal is a time bomb. Always provide for a fixed term, and if you wish to extend, have a new mandate signed in due form. Time limits: the nullity is retroactive. You can take legal action within 5 years from the signing of the mandate (ordinary limitation period). Amounts at stake: in this case, the commission was several thousand euros. Today, with properties at €200,000, a 5% commission amounts to €10,000.

Four Tips to Avoid This Type of Dispute

• Insist on a fixed-term mandate without tacit renewal. If the agent proposes automatic renewal, ask for a clause providing for a limited duration (e.g., 6 months, renewable once). Refuse indefinite renewal.
• Never sign a simple letter to extend a mandate. As the Court reminds, a letter does not replace a formal mandate. Insist on a new written contract with all mandatory particulars (duration, price, commission, etc.).
• Keep all documents. Keep the initial mandate, any correspondence, and note the expiry dates. In case of dispute, you will have evidence.
• Consult a lawyer before signing an exclusive mandate. A professional can detect unfair clauses and advise you on negotiating terms.

Further Reading: Related Case Law and Developments

This 1986 decision of the Court of Cassation has been confirmed by several subsequent judgments. For example, in a judgment of 21 February 1990 (No. 88-15.234), the Court held that a mandate of indefinite duration is void even if the principal has accepted successive renewals. The trend is consistent: courts protect the principal against automatic renewal clauses, which are considered contrary to public policy. In 2020, the Court of Cassation further strengthened this protection in a judgment of 15 October (No. 19-17.456), specifying that the nullity of the mandate for lack of a fixed term can be invoked by the principal at any time. For the future, it is likely that the legislator will tighten the rules, in particular by requiring an express renewal every year. In the meantime, this case law remains the reference for all disputes relating to estate agency mandates.

Frequently Asked Questions

• Can I recover the commission paid to the agent if the mandate was void? Yes, you can claim reimbursement on the basis of unjust enrichment (Article 1302 of the Civil Code). You have 5 years from the payment.
• What should I do if the agent sues me for payment of his commission while the mandate is void? You must raise the nullity of the mandate before the court. The agent will have to prove that the mandate was valid. If he cannot, his claim will be dismissed.
• Is a verbal mandate valid? No, the Loi Hoguet requires a written document. A verbal mandate is void, and the agent cannot claim any commission.
• Can I give a new mandate to the same agent after the expiry of the first one? Yes, but you must sign a new written contract with a fixed term. A simple email or letter is not enough.
• What are the risks for the estate agent if the mandate is void? The agent loses his right to commission and may even be ordered to pay damages for misleading commercial practices.

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