18 Oct Dispute on exclusivity clause of real estate agencies

Within property intermediation contracts in which real estate agents are protagonists, mandates signed with the owners are particularly important, in which the agent is entrusted with the management to obtain a buyer and, in short, the operation is successful. In turn, in these mandates, an exclusivity clause can be introduced or not.

That is, you can only charge one agent for the sale, or you can allow the order to several, or it is even possible for the owner to try on his own.

Lately, the validity of the exclusivity clause in the sales order of real estate brokerage has been questioned as to the possible abusive nature of the same since for some it would be questionable that agents would collect their fees even if they were not the ones who found the buyer. It is clear that in force the exclusivity clause the agents are the only allowed for the sale, and in case of breach it must have consequences.

The truth is that this clause is absolutely valid, and this is what Jurisprudence affirms up to the most recent dates, since the exclusivity clause is established as a penal clause that normally entails the payment of the real estate agent’s fees when the contracting party fails to fulfill that assignment exclusively, not being contrary to the law, morality or public order -requirements of the Civil Code-, but compensation for the damages caused to the real estate agent, granting the remuneration agreed in the contract.

The Agent performs from the first moment of the commission a series of activities and procedures such as the necessary appraisal, publication in real estate portals, numerous visits with interested parties that are only compensated when there is success. Hence the need to ensure that you work exclusively.

Criticisms and advantages of the covenant.

Precisely one of the criticisms made is that the owner does not receive an additional compensation in exchange for losing or giving up for a limited period of time the availability of the property. As advantages, however, we can mention the possibility of selling in a shorter term, with the best services and the availability of all means of the agent in that period of time (advertising, visits with potential buyers … etc).

The real estate brokerage contract binds the two parties that sign the agreement, and takes effect from the acceptance of it, in application of the general theory of contracts established by the Civil Code (SSTS 26 February 1994 (RJ 1994, 1198) and May 30, 1996 (RJ 1996, 3864. It should be made clear that there is no contractual imbalance, as it does in other sectors, banking, insurance, etc. As a result, judges are reluctant to apply the regulations of the General Law for the Defense of Consumers and Users. 

Since it is a contract in which the free will of the parties prevails, they have the ability to set in it the conditions they deem appropriate, and among them this exclusivity pact linked to the right to receive the fees of the agency.

Mandatory writing councils.

So that it is not possible to question the validity of the clause, it is important the wording of the clause to be clear, comprehensive and express, that is to say, that from its literal interpretation there is no doubt about the meaning in which it is established, detaching from a simple clause, by which certain effects are established and signed by the property.

That is, with the referred nuance that the agency will receive fees although the management has finally been made by the owner, so that there can be no doubt about what was the will of the parties at the time of signing the contract. In addition, it is recommended that term in which mandate excusively is entrusted be brief, being advisable three or six months, having the agent total freedom to revoke it, in such a way that links for a limited period of time, justified by the TS with regard to the order, the real estate mediator begins to make a series of steps that involve an investment of time and money – opening of the technical sheet, advertising, visits, etc. – that must be compensated.

Therefore, the drafting of the contractual documents is relevant to be able to defend our work and activity so, if you need prior advice, do not hesitate to contact our tema of Navarro Llima Abogados.

Héctor González y Victoria Usón.

Lawyers