A FEW months ago I signed a contract with an estate agent on the Costa Blanca (Javea), which authorized him to sell my house for a very low price, because at that time I was in a hurry to dispose of the property.
He has now told me that he has found a buyer, but I have responded, informing him that I no longer wish to sell the property at that price and he has told me that I have to pay his fees anyway even if I refuse to sell. Is this correct?
Thank you for your enquiry.
First of all, we must point out that in order to give you proper legal advice, we would need to study the contract you signed with the estate agent but our general observation on the situation, which should not be taken as formal legal advice is as follows;
- Contracts that are usually signed with estate agents requesting their assistance in the sale of a property are considered as mediation contracts in Spanish law.
- In these contracts, the estate agent is obliged to search for and locate potential buyers, who are willing to purchase the property under the conditions determined by the seller.
- Unless otherwise agreed, the right to charge the agent’s fees does not depend on the completion of the purchase, but will become enforceable, at such time as the agent has contributed to the signing of the contract, (in this case normally a purchase) and even if later on, the sale is not completed.
- In this case, if the only reason why the purchase contract has not been entered into between you and the buyer is because you refuse to sell it under the conditions previously agreed with the agent, there could well be a legal claim against you.
It could be considered by the Spanish courts, (in the event that the agent presents a legal claim against you), that the agent complied with its mediation work by finding a buyer willing to purchase the property in accordance with the instructions given by you and therefore, the estate agent is entitled to collect its fees if your decision to ‘pull out’ means that no purchase contract has been signed.
In this regard, the Spanish courts have ruled on this matter in various judgments, (such as the judgment of 12/20/2018 of the Provincial Court of Seville) confirming the above by stating;
“The agent would also be entitled to the fees claimed, because as is said in the claim and as it has been fully proven, the agent carried out the instructions given in full, but the purchase contract was not signed due to the unilateral decision of the defendants.”
Therefore, if you are an estate agent or the owner of a property in Spain who wishes to sell, you must be aware that it is essential that you agree the correct wording of any contract between sellers and agents.
This is imperative since the wording of the agreement will indicate whether the agent’s fees could be claimed for and what would happen in the case of a refusal to sell and whether the fees should be paid or not in case the purchase is not completed correctly, etc.
Clearly it is in in your best interest to ensure that the correct wording is included in order to protect your position and to avoid future legal court claims.
If you wish to be properly advised in relation to the negotiation and drafting of this type of mediation contract for the sale of a property, contact us and we will help you.
The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.
Carlos Baos (Lawyer)
White & Baos
Tel: +34 966 426 185
White & Baos 2019- All Rights Reserved.