Estate Agent - 'Entremise'

[Tonyf]

Can someone help me on this one.  I was recently discussing, with an estate agent friend (French) the various UK referral agents that advertise on the net.

Baiscally, they have photos of the houses and when you express an interest they refer you to the french Immobilier who shares the fees with the uk agent.

I am told that if there is a fee sharing agreement then the UK agency are obliged to be a registered enterprise in France as would any Commercial Agent.  The sharing of fees is apparently called 'entremise'.  He said that he would like to link with these agents but none of them are interested in coming on board because of the french registration.

The sharing of fees he was referring to is the fees on the disclosed tariff and no the uplift fees that at least one estate agency in Lassay Les Chateaux (50%!) has written on his tariff.

I don't think many of the big boys are registered in France, anyone know?

[Will]

I think this is one of those many grey areas in European law. I would suggest that because the referral agencies are based in Britain, carry out their business in Britain, and have no physical presence in France, they come entirely under British law, rather than French. They act perfectly legally in British terms and have no obligation to register as a French business, indeed to do so would cause additional problems. A French-registered agent commercial of course is subject to French law, so different provisions will apply even though the actual work carried out is rather similar. However I am not a lawyer so that's just a layman's opinion.

I do know of certain agences immobiliers in France, for which referrals from such agencies form a significant proportion of their business, which have been subject to controles, and this has not caused any problems. It's probably one of those subjects with valid points on both sides of the argument that could be discussed at length without any firm conclusion.

If one wanted to play devil's advocate I suppose it might be argued that the French agencies are acting illegally by using the services of a foreign company that would not be able to operate in the same way within the French legal framework. But if one thought like that then all sorts of areas of international trade would be considered illegal in France and respected French-based international organisations, like the one I was talking to in Paris yesterday, would be forced out of business, at great loss to the French economy.

[Tonyf]

Thanks Bill

Your final paragraph is most worrying for the french because, let's say that the French Agent charges 50% in addition to their fees to accommodate the UK collaborator and pays them from his commission.

Assuming that is it correct that monies should be paid via the Notaire and that these commissions payable to the french agent are noted on the Acte de Vente (the full amount as per his tariff)

Is the French Agent then subject to charges on the gross amount?

Strange one this.

 

[Will]

Tony, a very interesting question and one which I certainly cannot answer. The final paragraph in my last post was merely speculation, a 'what if?' sort of situation that I don't think has ever been officially queried.

The practice of charging what is effectively a vastly different commission to direct clients and those referred via a third party is one which I personally feel is somewhat dodgy, though the company that reportedly does this is an established French agency, claiming to be affiliated to FNAIM, so I am sure it must be within the law.

I use the word 'reportedly' because I have not heard of anybody actually being charged this extra 50% (that's not to say it doesn't happen of course, just that I haven't heard of it). We had some recent B&B guests who agreed a purchase and signed a compromis through a branch of that agency, and the extra 50% was never mentioned - but for all I know they may have just walked in off the street rather than been referred to the French agency.

Of course, I don't know what agreements this agency has with any referral agencies it works with, but most of the arrangements I have heard of pay a bit less than 50% of the agency fee to the referrer. So in this case it is either a 'nice little earner' for the French agency or, indeed, it does have to charge the client more than it pays the UK agent to accommodate the extra charges to which you refer.