Commission? Think again

Antonio Flores argues that Real Estate agents are not entitled to commission for registering a client with a property owner or developer

LAST UPDATED: 12 Jun, 2015 @ 07:04
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Antonio Flores
Antonio Flores

REAL Estate Agents (REA) in Spain have long thought that if they register a client with a property owner or developer (irrespective of whether they show them the property), they have an automatic right to receive a commission.

However, and it may come as a shock to many, this is not the case, according to specific case law on the matter. The following rulings explain this:

Appeal Court in Oviedo (22/2/1996):

[…] Only the broker that has effectively concluded the contract between buyer and seller is entitled to retribution, rejecting ‘equitable remedies’ to the broker who, having intervened in some capacity in the contract has nonetheless failed to close an agreement.

Appeal Court in Oviedo (27/2/1998):

[…] the elucidation of who is entitled to the commission where several REAs intervene is not an easy one for, although several REAs may have ostensibly taken part in the negotiations, it is only the REA whose actions were decisive to perform the instruction who will be entitled to a commission payment.

[…] In a transaction where the principal has hired several REAs, it is not always easy to establish which of those specific actions, as carried out by each REA independently, produce the desired result of successfully closing the deal. The Court is of the opinion that where this situation occurs, it is a question of fact whether a specific REA action was decisive in securing the closing of the deal, in other words, the causation of the exchange of contracts between buyer and seller even if, in practice, coexisting actions or other particular factors of other REAs could have helped achieve the result.

Supreme Court (23/2/1965):

[…] Where several independent brokers concur with each other in a transaction, remuneration will have to be paid to the one whose action was a cause, even if not exclusive, of the success of the intermediation, i.e. the exchange of contracts. Not upholding this view risks transmuting the very nature of a brokerage into a type of services contract where remuneration would be paid irrespective of the result of the conclusion of a sale, thus depriving brokerage agreements from the risk-of-failure element that is inherent to any aleatory contract.

The most immediate consequence of the application of this case law is that the commonly known action of “registering a client”, on its own, does not entitle the agency to receive a commission. On the contrary, a REA needs to prove that his endeavours have materialised, specifically, in the exchange of a purchase sale agreement (of whichever description).



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Lawyer Antonio Flores is the legal columnist for the Olive Press. Antonio has been practising law since 1997, year in which he began working for a large law firm in Marbella as a Property Lawyer. In 1998 he left the company he had joined a few months earlier, and used his knowledge and the experience gained to build his own practice. He is known throughout the community as independent, reputable and trustworthy. Through a combination of strong work ethics, determination and international exposure, his competence of Spanish Law is unparalleled and demonstrated through his fluency in English and Spanish.

14 COMMENTS

  1. Is this guy a member of Podemos? Or just a plain socialist?
    He is constantly coming out with positions challenging the rights of hard working people to be paid for their work and disrupting the economics of the free flow of commerce and capitalism? The last thing the “finally” recovering real estate market needs is another socialist dictating who gets paid and how for their work.
    If it was up to him and the new leftists Councils & Mayors, I suppose all hard working people’s money should be distributed equally to those on the government doll supposedly in need, while watching football all day from their sofas…
    Whether they work or not.

  2. “Work” Rubicon? Scam more like! Mccarthy-style ranting can’t disguise a personal interest in grabbing money for doing sweet F.A. This clarification of the law (long overdue) has nothing to do with left versus right politics, it is simple justice. Estate agents have far too much influence on the property market, considering their lack of qualifications to be in such a position.

    • Nothing to do with politics? Are you really that naïve? Can’t imagine how any sane, hard-working person would want to give even more control to the government to manage commercial affairs? It’s the bureaucratic and often corrupt governments who have too much influence. But who knows, maybe you’re waiting for your forthcoming Podemos hand-out, or a lawyer’s check after suing your neighbor’s dog for peeing in your garden?

  3. Jane and Rubicon. Are we both reading the same article? This is about preventing “estate agents” from making money for doing nothing. How come you Jane, of all people, approve of those hugely concerned with flogging dubious properties? Have you switched sides?
    Antonio Flores has a good reputation in standing up for hard-done-by victims of Spanish property scams and is the furthest thing from a leftie activist. Besides which, he is merely explaining the ramifications of a legal clarification. What’s the point of shooting the messenger?

    • Stefanjo, certainly not, I just thought Rubicon’s description sounded like the self serving and business unfriendly Junta de Andalucia. I was certainly not condoning dubious tactics, over charging or property scams all of which are conveniently overlooked by the Spanish authorities.

    • Stefano, perhaps you have a point. However, I quote “although several REAs may have ostensibly taken part (i.e. worked on the deal) in the negotiations, it is only the REA whose actions were decisive to perform the instruction who will be entitled to a commission payment.”. Let me ask you Stefano, what is the exact definition of “whose actions were decisive”? And how exactly will that very subjective standard be determined in a Spanish court?

      Furthermore, with all the corruption going on around us still, is blaming the real estate agents really where the problem s? That’s like blaming the mice for being eaten by the cat.

      Perhaps another consideration for those “principals” mentioned in the article, would be to stop listing your properties 20 times with different agents and also behave more responsibly. Dou want also want a court to determine that, what is considered “to be responsible” behaviour?

      If what you say is true about Mr. Flores, seems to me he could spend his time better addressing where the actual corruption is. And it’s not the mice, but the cats who rule the roost.

  4. This change/clarification means that the seller need not dish out fees to every Tom Dick and Harry. Only one agent will be entitled to a fee, the rest can fight it out between themselves. The hungriest chick will get the worm. About time a cushy sinecure was removed from these chancers, the onus to pay them is removed from the seller.
    Of course estate agents aren’t completely culpable in all these legal disasters, but they aren’t the minor players you depict Rubicon. In fact, some are the gateway to what follows, through the ministrations of developers, builders, local politicos, years of stress and distress and in the worst case, the final bulldozer.
    If you take the time to look into Antonio’s past blogs/articles, you will see he has frequently pointed the finger at ALL those responsible for the blatant criminality in the Spanish property system.

    • Fair enough. I will take a deeper look at the blogs of Mr. Flores. However, while you make some valid points, I still stand by my point that more big government, politicians and opportunistic lawyers are not the solution. Where, perhaps with the exception of Mr. Flores (we will see from his blogs), they are far more culpable for the problems past and present, than real estate agents or anyone else for that matter.

      • I would add that the Junta de Andalucia are responsible for the so called illegal property scandal and subsequent demolitions. They knew what was going on for years but just sat back and did nothing while innocent people bought land and newly built properties which the Junta fully intended to declare illegal at a later date and once they had milked it for all it was worth. This premeditated act has to be the scam to end all scams.

  5. Jane, I did read somewhere many years ago, prior to WWII that a general strike was called in Germany. Hitler invited all the strike leader to a meal and after the meal had them marched outside, placed against the wall and had the lot shot. No strike and problem solved. Do you you think something of that nature could be used against the Junta de Andalusia, perhaps not so drastic but a possible threat.

  6. Correct Rubicon, I inadvertently left out the biggest baddies of all from my list of miscreants, namely, bent lawyers. Although it’s a toss-up between them and bent politicians. as Jane points out.
    There are so many grubby fingers in this pie, that it’s hard to keep track.

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