Commission Paid in the UK - They can be Recovered

[Donny]

I have just recently recovered money, (via a County Court verdict) from a UK company who were paid money (stupidly by me) in the Uk for their introdcution/hand holding.  This fee was not mentioned on the Acte de Vente and was held to be an illegal commission/contract by the District Judge.

This only applies to french properties purchased since 1st January 2004.

I know that a lot of people have also been caught out by this in the past and I would be happy to pass on details of the French Jurist who took the case for me.  PM me and I will reply with the details.

Don

 

[Will]

Was that a large company that includes its own fee (typically £2500 + VAT) in the 'all-inclusive' prices it advertises, though it expects this fee to be paid up front? Or one of the smaller UK-based agencies? (note - most UK referral agencies take their commission from the agent in France, and do not charge the buyer.)

I was always under the impression that although taking extra fees like that was of doubtful legality in France, because all of that part of the transaction was undertaken in England it was permissible under English law. Plus the fact that the large company I am thinking of is quite open about its fee, so although many would consider it unneccessary expense, one is hardly 'caught'..

[Donny]

Hello Will

My argument was that because the property was advertised as a house for sale (all inclusive price) and that the 'agency involved did not specify what service they provide for their fee, I was entitled to assume that this was a legitimate Agency fee in France.

The company involved was a UK Ltd company although operating in France.  I saw that their commission was not on the Acte de Vente and asked the French Estate Agent and he said this was ok.  I later find out that it is illegal.

The District Judge found that I can have my money back for two reasons.
   1.   The contract with the UK agency is illegal in English Law because it is a 'prima facie' fraud against French Law, the country in which the goods/property are permenantly located.
   2.  He also found that the UK Agency were found to be operating illegally in France as they were unknown to the French Authorities (Tax etc) although their business was primarily concerned with the sale of French Property.

I don't know of the company you refer to.  If they do charge an illegal commission then take them on.  Why you can't name them?

Regards

Don

[Charlotte3]

Hi Donny,

You don't say whether the company involved actually did any work for you, but I assume they did if you paid their fee.

Surely it's a bit "off" to accept their help to buy a property and then take them to court later because you found that the transaction was illegal.

Neither is it moral (given the situation I hesitate to say illegal) to engage someone to do work for you and then not pay them.

In your shoes I would have been miffed, but put it down to experience. After all you did get the house you wanted and presumably with their help. Perhaps you should have checked them out properly before you engaged them!

It seems to me that in this argument one side is no better than the other.

Aly

[Donny]

Hello Aly

I saw the property on the company's website at an all inclusive price.  I contacted them on my visit they accompanied me to a French Estate Agency.  I was unaware that they were charging a fee over and above the normal tariff.  I bought my property on the basis that it was a legal contract.  Had their fees been included on the Acte de Vente then I would not have envisaged a problem.

The consequence of my going ahead with the acte de vente (the French Agents were complicite in this) could have been disasterous for me.  In signing the Acte de Vente I signed a clause which stated that no other money has been paid to anyone else other than that on the Contract.  Both I and the Agent were aware that I had paid  a commission seperately the English Company and that is was not mentioned on the contract. I questioned the French Agent and representative about this at the Notaire's office but they said that this was normal practice and not necessarily required to be on the document. The contract was 'translated' by the UK Agent representative at the Notaire's office but I cannot recall her mentioning the particular clause which is commonly known as the 'sous la table clause'.

I intially started investigating this because the UK Company did not send me a receipt.  I saw a French Avocat because they had the agent who works in France and thought I could have it resolved.  It was only when I learned of what I had got into that I started taking action.  A consequence of mis-leasding the Notaire/French Authorities can be sequestration of your property.

In those circumstances I was not prepared to have my home taken and decided to take the issue to Law to have myself exonerated from the Fraud.

Finally, I found out that the French-based representative is not working legally in France. Another one of us ripping off the French system.  I make no apologies for bringing these people to book.

Don

[Will]

The company cannot be named due to forum policy. I notice you didn't name the agency either. That I was thinking of is an old-established company that is often quoted in articles on French property and French life. It makes no secret of its fees, and if people do not like paying them they have only themselves to blame - a little very simple research would show that it is still possible to buy a house in France without going through such a company. Many who have used the service are perfectly happy with the service they have received.

If such organisations are deemed 'illegal' I think those most likely to lose out will be buyers and sellers of houses in France. Buyers because they will not have the easy, hassle-free, option (albeit at a cost) for what can be a difficult transaction in an unfamiliar country with a very different house buying system from that they are used to. And sellers because they will be denied some effective marketing to British buyers. And it will potentially put others who help, for a fee, in the French property business, in a difficult position. That includes legal and financial advisors, hand-holding and property search agencies, even in some cases the 'granny network'.

I have never used one of these companies. In fact as I have close connections with French property sales I could argue that I may have a vested interest in putting companies like this out of business. But as they provide a service for those who need it I don't see the point in querying what I understand to be an open, up-front charge, and your court action seems to be muddying the waters rather than scoring a victory. I don't see many rushing to congratulate you either here or on another forum where you have posted the same information.

Edit - I am more than a little confused; you imply that you have not signed the acte de vente - presumably you did sign a compromis de vente , which binds you to the purchase, and on which the  fees would have been identified and summarised. You also say that the French agent is acting illegally in France - in which way? And if so, this is surely a matter for the French authorities rather than the British courts, and is potentially serious because it implies that the notaire is also complicit in illegal activities in France. Neither do I understand what the significance is of the 2004 date.

[cooperlola]

It is interesting this.  When I bought here, I did use such a company.  Not because I couldn't do it myself but simply because I did not have the time as we were closing a house-sale here to finance the purchase and working full-time.  I was glad to just have somebody I could e-mail or phone, who was happy to pop into the property and discuss all sorts of things with the owners/agent/notaire etc.  I paid something like 1500 euros for the service which included translations etc and the day we moved in the phone/electric/water etc was all in our name and we were ready to go.  I did not then and still do not, begrudge the money.  I would not dream of attempting to get this money back as I was well aware of it before I begun.  I agreed to pay and knew what I was getting for my money and how much it would be.  That was the agreement - they did what they said they would at the price they quoted.  That seems like pretty fair business practice to me.

[bloodyestateagent]

Hi Don,

Congratulations!

If it is the same company that I'm thinking of then this is long overdue. (this company charges a lot more than 1500 euro, more like 8500 Euro)

This company preys on peoples insecurities - both the clients and the people that they find to work for them in France. A lot of money is spent on spin and PR, both to attract clients and also to attract people who want to earn a living in France. Once you have paid your fee, be it the 'hand holding' fee or a 'training' fee, they are happy. A lot of people who buy a property and use the service are disappointed at the end at how much 'extra' is actually done for the cash. Most people are just fairly miffed, not many feel strongly enough to investigate further or take legal advice. I doubt if many people who have bought through this company would buy a second time through them. Similarly, the vast majority of people who work with this company do so for less than 2 years.

There is a lot of bad feeling towards this company, form previous customers, previous partners and local French agents.There would be a lot of people glad to see this lot go out of business, myself included.

 

[cooperlola]

I admit the OP's case seems different as what was included in the hand holding price was not specified, although it still begs the question as to why he did not enquire about what he was getting for the money in the first place. 8,500 euros seems excessive Bl**dy..., you're right!  Who in their right mind would agree to pay this amount - presumably in the case of these people it varies according to the price of the property (not the case with the company I used - it's a flat rate)?  It still all seems a bit rum to me that you can agree to pay for something, that something is provided, and you can then wriggle out of paying afterwards!  If I offered something for sale at £100 and it was only worth £1, wouldn't the buyer just be a mug for purchasing it from me in the first place?

[Deimos]

It can get difficult to discuss companies when the company concerned cannot be named. However, one indicator that suggest some may have guessed incorrectly are "French representative". The large company I suspect people are thinking about does not have French representatives but rather a number of independent French companies (franchise operations). These are owned by individuals in France and are French registered businesses. The company concerned does quote all inclusive prices and their "add-on" is quite a lot - but it is for legal and translation services and is not an "up-front" fee. similarly, the large operation I suspect people are thinking about do send out invoices for their fee (in fact they are quite thorough about it). Similarly, with the "large operation" the contract is translated in the UK before visiting the notaire.

Certainly I am not leaping to the defence of the company I think people are assuming it might be. I used that company for reasons being aware of their additional costs. I ended up getting a refund not because of any "legal issues" but rather that the UK side of their operation failed to complete some critical aspects of the work they were meant to do for their fee. I believe they have changed UK personnel now and I have no reason to assume that the problems continued.

When different people search for properties in France their personal circumstances vary and different companies offer different levels of assistance at different costs. As I had limited time from work I needed a lot of help on the French side as I could not spend ages visiting - and in that regard I got what I paid for and was (mostly) happy.

Ian

[Charlotte3]

Cooperlola,

Well said on all points!

We too used such a company and I paid 10,000ff for their service. Now I come to think of it, their fee wasn't mentioned on our paperwork either. Having said that, we couldn't have done it without them due to work etc.

We were right royally ripped off by the chap we dealt with (house not on mains drains as stated in their brochure, nothing connected as promised etc.etc.) , but we put it down to experience. We too considered legal action againts them, but being in France it would have been too complicated for us at that time (didn't speak French) and they were not legally registered in France we were advised it would be a waste of time.(Chap we dealt with was actually registered as a gardener).  We could have had the sale annulled, but we would have been left with no home, so that wasn't an option.

Anyway, six years on, we wouldn't be anywhere else. (Still hate his guts though!!)

Aly

 

[oglefakes]

I once (unwittingly) got in an unlicensed taxi from an airport to a city hotel.

The guy was polite and helped take the bags out the boot, smiled at the kids, gave advice etc.

He performed his service well, something that I was unable to do at the time because I was busy (being a tourist).  Had we been in an accident en route, he would not have been insured for paying customers and I would be gobsmacked if he paid any tax.

Just because he performed a 'service' successfully, am I now hypocritical to think poorly of him?  After all, there was a verbal contract in place and I knew he was going to charge a 'fee', it was discussed prior to the service being performed. I only found out later that in the eyes of the law he was operating illegaly.

If Donny's 'driver' disclosed a fee, performed a service (and no one was hurt along the way) this is sort of negated by the fact that they wouldn't provide a receipt, were asking Donny to sign a piece of paper saying he hadn't paid any 3rd parties, appear not to be compliant with local licensing and funnily enough lets not forget, a judge agreed.

There are various comments in general saying how artisans shouldn't accept any cash in hand payments, as everybody pays in the long run (I mean the ones who are legit, but don't disclose every bit of cash they get, not the 100% on the black ones), but somehow Donny is being hypocritical about trying to be kosher in major transactions.

I think Donny did the right thing.

Cheers

[Deimos]

I notice the OP commented that he paid a fee for "introduction/hand holding" to the UK company. I would understand this to mean he was fully aware of what he was paying for and that an introduction/hand holding fee would have nothing to do with the price of the property. The fact that the UK company concerned quoted an "all inclusive price" I would understand to mean that the price includes their "introduction/hand holding" fee - thus I would not expect it to be include din the Acte de Vente. Seems to me that you can sign to say that no other money has been paid for the house as you were paying for the "introduction/hand holding". My understanding is that the "no othe rmoney paid" thing is to avoid people paying less that the house value (and thus less tax) and making up the difference with a cash transaction to the owners (bypassing the notaire/agent/etc and thus agoiding loads of fees that were actually due).

I cannot help but feel that the the fee has had to be refunded "on a technicality". I agree with others that if I agree to pay for something at av given price it is a bit off to subsequently find a way of avoiding paying the previously agreed fee after the services have been provided "on the technicality".

Ian

[Russethouse]

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