The business input activity remains uncertain. The Hoguet law does not provide for it and in case of doubt, the judges assess on a case by case basis.
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The quest for information leading to the signing of a mandate is essential for a real estate agent or property manager. Also, the professional can consider remunerating certain business introducers. But what is the status of these business introducers under the Hoguet law? Is business input in real estate possible? If so, under what conditions? These questions are important because if the business contribution falls under the Hoguet law, the sanctions can then be criminal (illegal exercise of the activity of real estate agent) and civil (loss of the right to remuneration).
I. The principle
Bringing business into commercial law does not pose any particular difficulties. However, when this transaction concerns a regulated activity (real estate, banking, insurance), it must be studied with regard to the scope of said activity. Because without knowing it, the business provider can “enter” within the scope of a regulated activity and therefore be illegally carrying on the activities of real estate agent, banker or insurer. In real estate, it is therefore necessary to analyze article 1 of the Hoguet law which states that “this law applies to natural or legal persons who, in a usual manner, engage or lend their assistance, even on an ancillary basis, operations relating to the property of others and relating to »sales, rental, property management or property management operations.
Let us note above all that this definition is broad and that in case of doubt, it is the judges who will assess the situation submitted to them in a sovereign and case by case basis. There are certain exceptions referred to in article 2 of the Hoguet law which are not repeated here for educational purposes and in view of the format of the article.
A. Remuneration
Compensation is often mentioned on the occasion of business contributions, yet it is not a criterion for the application of the Hoguet law. Indeed, the aforementioned article does not make it a condition for the application of the Staff Regulations. It does not matter whether the business contribution is remunerated or not and regardless of the amount of remuneration. The Paris Court of Appeal recently applied this principle with regard to remuneration of more than 80,000 euros (CA Paris, 1, ch. 8, 5/6/2020, n ° 19/16391). While remuneration is not a criterion, the criterion of habit is decisive: payments made for the benefit of a business provider may constitute proof of habit.
B. Habit
The Hoguet law applies to persons “who, in the usual way, engage or lend their assistance, even on an ancillary basis, to transactions involving the property of others. […] “. Habit is therefore a criterion for the application of the Hoguet law. Thus, a person who brings in business once or even remunerated intermediation will not be covered by the Hoguet law (Cass. 1st civ., 27/1/2001, n ° 99-14005). But if the same person carries out two intermediation operations, he / she falls within the scope of the Hoguet law (Cass. Crim., 2/11/1978, n ° 77-93464). Only the number of times – once – counts, not the periodicity.
C. The profession of the parties
The profession of the parties is also irrelevant to the scope of the law. (cf. in particular CA Bordeaux of 25/11/2020, n ° 18- 00893, and Cass. 1re civ. of 17/12/1991, n ° 90-11935) However, we very often hear that the Hoguet law does not exist. not apply between real estate professionals: it’s true… and false. Because we must not confuse the profession of the parties and the delegation of mandate. The Hoguet law does not apply within the framework of a delegation of mandate but it is exercised when the seller is a real estate agent and he entrusts the sale of his property and its premises to a colleague (Cass. 1st civ ., 23/1/2019, n ° 18-11677), or in relations between a developer and a real estate agent (Cass. 1re civ., 1/7/2020, n ° 19-15009, Cass. 1re civ. , 17/12/1991, n ° 90-11935).
The principle having been established, what about the position of the courts on the very notion of business introducer?
II. The jurisprudential position
Is bringing in business the same as providing support on an ancillary basis to a sale, rental, rental management or trustee transaction?
A. The position of the Cour de cassation
The Supreme Court defines the real estate agency as being the search for clients and the negotiation, or in one of these missions only (Cass. 1re civ., 8/7/1986, n ° 84-15731; Cass. 1re civ. ., 18/6/2014, n ° 13-11543). Thus she judges that the Hoguet law applies ” […] in particular to a business contribution ”(Cass. 1st civ., 17/12/1991, n ° 90-11935).
B. Towards an evolution of jurisprudence?
However, recent decisions of the courts of appeal judge on the contrary that the business provider is not subject to the Hoguet law (CA Aix-en-Provence, 5/1/2021, n ° 19-11033; CA Paris, 1, ch. 8, 5/6/2020, n ° 19/16391). Contrary to the position of the Supreme Court, they make a distinction between the contributor (or the business indicator) and the negotiation. The Chambéry Court of Appeal (6/11/2018, n ° 17-00811) seems to follow this reasoning, while that of Bordeaux agrees with the position of the Court of Cassation by ruling that “the Court can only observe that the transactions for which the commissions are requested came, even as a business contributor, within the scope of the law of January 2, 1970… ”(25/11/2020, n ° 18-00893).
More generally, and at a time of digitalization and platforms, it would be desirable for the Court of Cassation to precisely define the services that fall under the Hoguet law and the others. Indeed, the Paris Commercial Court recently ruled that questioning a prospective buyer on his financing plan and therefore qualifying him, did not constitute a service falling under the Hoguet law, on the grounds that this service was ” truly annex ”to all of the other services offered (dissemination of advertisements, photographs, digitization of the property, virtual visit), which themselves do not fall under the Hoguet law. However, article 1 of the said law does target people who “engage in or lend their assistance, even on an ancillary basis, to transactions involving the property of others and relating” to transactions of sale, rental, management of real estate or of trustee. As this judgment has been appealed, let us therefore wait for the position of the Court of Appeal before possibly that of the Court of Cassation.
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