The Real Estate Agent's Liability

A reservation agreement was signed, through a real estate agent, for the purchase of a chalet. This agreement required the buyer to lease the property to a company. After the sale, the chalet was leased under a commercial lease to a company that stopped paying rent and subsequently went into judicial liquidation. Dissatisfied, the buyer filed a lawsuit. The judges then void the sale on the grounds that the seller knowingly misled the buyer regarding the promised rent guarantee in order to induce the buyer to purchase the property. However, they reject the request to order the real estate agent to guarantee the refund of the purchase price from the insolvent seller. This last point is overturned by the Court of Cassation. While the refund of the purchase price does not in itself constitute compensable damages, a real estate agent whose misconduct contributed, at least in part, to the annulment of the sale on grounds of fraud may be ordered to guarantee payment of the purchase price in the event of the seller’s insolvency.> The Court Ruling