Beware of Broker Contracts

Broker or intermediation contracts They are not covered by any specific law. They have developed over the years and through practice, consequently They are subject to jurisprudence of the various cases being analyzed in the Courts. Furthermore, Brokerage Contracts present a high litigation rate, precisely because they are not covered by our legal system. We will analyze them so that consumers are fully aware of their rights and obligations, thus avoiding future problems.

These types of contracts follow similar criteria to service or management contracts, but they don’t fall under either category. It’s a flexible contract that can and should have genuine transparency, so the client is truly aware of the responsibilities involved and the resulting consequences. It’s important to know that The mediators or intermediaries do not act on behalf of the owner or prospective buyer, given that for that, a specific power of attorney is needed.

Case Law has made it clear that, once the purchase and sale agreement has been signed by both parties, the agreement has been perfected. Consequently, the mediator’s fees are due because the objective has been achieved: connecting the buyer and seller so they can complete the property sale. In other words, if a Real Estate Agent introduces a buyer and seller and has a signed brokerage agreement with the seller (for example), then they will have fulfilled their objective by bringing the parties together. Once the sale is finalized, the broker agreement will be considered complete.

Therefore, the completion of the action can occur at that very moment if possession is transferred, or later, for example, if possession is transferred on a later date or if the sale is carried out with deferred payment. This includes the fact that the mediator’s fees are not subject to the conditions that the buyer and seller may establish between themselves in the sales agreement. Similarly, any difficulties that may arise after the act has been completed do not preclude the accrual of the mediator’s fees. The law follows logic and common sense; therefore fees are earned when the purchase agreement is signed and not with a reservation of a property, which in practice is very common.

Often, buyers or sellers try to avoid intermediaries and, consequently, payment for their services. In these cases, it may be possible to compel the client to pay the fees. This applies if it can be proven that both the buyer and seller…They let time pass so that the term of the Broker Contract would expire, thus formalizing the sale and avoiding payment of Broker Fees; they could ultimately be required to pay these fees. Or, if it can be proven that a sale is finalized with one of the clients the intermediary introduced and who was initially rejected, the intermediary fees could be demanded. This is all due to the bad faith of the party involved, since the work was indeed carried out. This and other similar situations mean that intermediary fees can be accrued, even if attempts are made to avoid them.

On the other hand, if There is just cause for the revocation of the mediation contract the termination of the contract, as stipulated in the contract or as generally applicable to all contracts, will always be acceptable, and both parties will amicably terminate the existing business relationship, as with any other contract. Even if the termination is amicable, certain amounts may be due for damages for work performed up to the date of termination. Any amount for such damage must be clearly specified in the contract.

There may be doubts about who is actually responsible for paying the fees, but case law has clearly established this in various rulings, indicating that, The person who entrusted or commissioned the management to the intermediary is obligated to pay the amount to the mediator. Sometimes, this is recorded in a visitor sheet, engagement letter, contract, emails, etc.

Do not forget that because these contracts are not included in our legal texts, we must keep in mind all the clauses contained therein, because they will be governed by the will of the parties.

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