If an urban right of pre-emption is exercised, the estate agent's commission will be borne by the pre-empting body, provided that the agency commission is stated in the declaration of intent to sell.
On the other hand, the issue is more delicate in cases where it is necessary to purge an existing tenant's right of pre-emption. Is the estate agent's commission due when the offer to sell issued by the lessor mentions the commission in addition to the sale price?
Your estate agent, NEW DEAL IMMOBILIER, would like to answer this question in this article.
Before going any further, we would refer you to the article on the sale of an occupied property to find out more about the tenant's pre-emptive rights, and how they apply.
The estate agent's commission is null and void in the event of pre-emption by the tenant
According to case law, the offer to sell is null and void if it requires the tenant, who has pre-emptive rights, to pay the commission due to the estate agent.
An estate agent commissioned by an owner to sell a property occupied by a tenant therefore runs the risk of seeing its commission evicted in the event of pre-emption.
The solution adopted by the Cour de cassation seems logical. The estate agent's commission must be justified by the fact that he has put the property up for sale and negotiated with a third-party buyer. The same does not apply to an existing tenant. In this case, the estate agent's remuneration would appear to be unjustified.
However, to avoid working in vain and seeing their commission cancelled at the last minute, estate agents can protect themselves.
Conventional protection for estate agents' commission in the event of pre-emption by the tenant
There is a way to protect estate agents from having their commission evaded.
When drafting sale mandates and deeds of sale, the estate agent's commission should be passed on to the purchaser for tax reasons. In this way, the agency fees are not taken into account when calculating the registration duties payable on a property sale. Conversely, if the seller is responsible for the commission, this increases the tax base accordingly.
For these reasons, agency fees are usually borne by the buyer. This is not a rule, and even less so a rule of public order, so it is entirely possible to pass this cost on to the seller, even if this increases the tax base.
To safeguard its commission, the estate agent should sign a sales agreement stipulating that the agency fees will be paid by the vendor. In addition, when issuing the offer to sell to the tenant, care should be taken to ensure that the property is offered at a price that includes the agency fees, without this being apparent.
For example, you should avoid stating €350,000 including agency fees, but only €350,000 without any other indication (regarding the price). Stating a price with the words "agency fees included" could be interpreted (as has already been the case) as meaning that the estate agent's fees will be passed on to the tenant, even if the mandate states the opposite.
If the above measures are scrupulously followed, in the event of pre-emption by the tenant the estate agency will be remunerated directly by the owner, in accordance with the mandate.