Real Estate Brokerage Agreement

The real estate brokerage agreement is concluded in writing. For the written form to be satisfied, the exchange of signed letters, signed faxes, as well as e-mail messages, is sufficient.

The agreement must:

a) Include the details of the contracting parties, their tax identification number, as well as the General Commercial Registry (G.E.MI.) number of the broker. In the case of cross-border provision of brokerage services, the register and the competent authority or organisation with which the broker is registered, according to the legislation of the country of establishment, shall be stated.

b) Determine the identity of the object of the mediation or indication of an opportunity, the type of the main contract to be concluded, as well as the amount or percentage of the brokerage fee, which is freely negotiable and is not subject to minimum statutory limits.

The use of general terms and conditions in the brokerage agreement is governed by the provisions of Article 2 of Law 2251/1994 (A’ 191).

Unless otherwise specified, the duration of the brokerage agreement is twelve (12) months, with the right of extension for a further six (6) months, following a unilateral written declaration by the principal. After its expiry, a new agreement may be concluded between the same contracting parties. If the duration of the agreement is longer than the above specified duration, either contracting party has the right to terminate it without penalty after the lapse of twelve (12) months.

The effects of termination occur after the lapse of three (3) months.

An exclusive brokerage agreement is permitted, within the framework of which the principal does not have the right to assign an instruction with the same content to another broker, nor to act himself or through a third party on his behalf for the search of an opportunity for as long as the agreement is in force, while the broker has the obligation to act for the performance of the instruction. Exceptions from the non-activity of third parties on behalf of the principal are possible only if they concern natural or legal persons expressly named in the agreement. The exclusive brokerage agreement may not have a duration exceeding eight (8) months, with the right of extension for a further four (4) months, following a unilateral written declaration by the principal, and after its expiry a new agreement may be concluded. If the main contract was concluded during the term of the exclusive brokerage, it is presumed to have been concluded through the indication or mediation of the exclusive broker, unless the main contract was concluded with one of the persons expressly referred to in the exclusive brokerage agreement, for whom it was agreed that personal activity by the principal is possible. In this latter case, the broker has a claim for reimbursement of all expenses incurred for the promotion of the property, plus reasonable compensation, which may not exceed one third (1/3) of the agreed fee, without the total amount exceeding one half of the agreed fee. If the main contract was concluded within three months from the expiry of the term of the exclusive brokerage and, in the meantime, the principal has given an instruction to another broker, then a fee is owed to the first exclusive broker only if it is proven that the conclusion of the contract was due to his own actions.

The real estate broker has the right to claim the agreed fee upon conclusion of the main contract, provided that he himself mediated in its conclusion or indicated the opportunity for its conclusion, irrespective of the type of the main contract finally concluded for the property. If several brokers, in cooperation with each other, indicated or mediated, then the fee is owed only once, paid by the principal to one of them, against whom alone the others have the right to turn and, in the absence of an agreement between them, it is distributed among the brokers according to each one’s contribution to the conclusion of the contract. If several brokers, to whom the principal successively gave different instructions, successively indicated the same opportunity, only the broker who first indicated the opportunity is entitled to claim a fee. If the percentage of contribution of each broker to the conclusion of the contract cannot be proven, then the largest of the fees agreed by the principal under his different instructions is distributed equally among the brokers. In brokerage for the construction of immovable property by way of consideration in kind, the broker is entitled to claim the full fee upon conclusion of the preliminary construction contract, unless otherwise agreed.

If, for the same property, a contract different from that provided for in the brokerage agreement is concluded, the contract ultimately concluded is presumed to be the result of the broker’s mediation.

The brokerage agreement must expressly state whether the broker may also act for the principal’s counterparty. If, despite the absence of the above agreement, the broker contracts also with the other party, the principal is entitled to refuse payment of the agreed fee or to claim the return of the fee already paid.

In every bilateral contract concerning immovable property, which is concluded by notarial deed, a solemn declaration under Article 8 of Law 1599/1986 by the contracting parties is incorporated as part of its content, stating whether or not a real estate broker mediated in its conclusion and, if so, the broker’s details, his General Commercial Registry (G.E.MI.) number and tax identification number, as well as the amount or percentage of the brokerage fee.

The parties to a contract relating to immovable property are not obliged to pay a fee to persons who provided brokerage services without the requirements of Article 198 and paragraphs 1, 2 and 3 of this Article being met.

The principal is obliged to notify the broker of the conclusion of the main contract at least one day before its conclusion; otherwise, he is liable to compensate the broker for any damage caused by the failure to give timely notice.

An action brought by the broker against his principal seeking the award of a brokerage fee shall be served on the broker’s Income Tax Office; otherwise, the hearing is inadmissible.