Real estate agents and financial verification

Real estate agents must confirm a buyer's ability to pay for a property, but they are not classified as banking intermediaries. This responsibility arises from their advisory role in real estate transactions.

Regulatory clarifications on financing roles

During the 2010 reform of consumer credit, organizations in credit brokering and housing asked regulators to clarify the roles of professionals handling financing requests. Some bankers then created short training programs under the status of accessory intermediaries, primarily to protect individuals from legal penalties.

Legal limits on real estate professionals' roles

The Banking and Financial Regulation Law of 2013 clarified the boundaries of real estate professionals' roles. These laws emphasize that real estate agents are not responsible for credit intermediation but must ensure they do not overstep their advisory duties.

Hoguet Law and real estate liability

Under the Hoguet Law, real estate agents can be held accountable if they enter a binding agreement to sell a property without confirming the buyer's ability to pay. This obligation is part of their advisory duty when handling a sales mandate.

Definition of credit intermediation

The Monetary and Financial Code, updated in 2013, defines credit intermediation as the activity of presenting, proposing, or helping to conclude banking operations or payment services. This includes all preparatory work and advice related to such services.

Independent credit advisory in France

European legislation on mortgage credit introduced independent credit advisory services, which were later integrated into French law by ordinance No. 2016-351. These services provide personalized credit recommendations but require a specific legal status, the IOBSP, to be offered.

Verifying buyer solvency and legal consequences

Real estate professionals are legally required to ensure a buyer's ability to meet financial commitments. Failing to do so may result in liability claims and the use of professional civil liability insurance, though this is separate from credit intermediation.

Document requirements and legal boundaries

While verifying a buyer's income and debt is necessary, the process must be proportionate and not overstep into banking advisory roles. Legislation also requires real estate professionals to justify the origin of funds and report suspicious transactions to Tracfin if needed.

Contractualizing and identity verification

Real estate professionals must avoid contractualizing when identity verification is impossible, affecting both buyers and sellers. Since 2016, they are not allowed to offer independent credit advisory services, as defined by the Mortgage Credit Directive.

Risks of overstepping in credit matters

Real estate professionals who closely assist buyers in credit matters without proper status risk engaging in illegal credit intermediation. This can lead to legal sanctions. Instead, they should define internal processes to verify a buyer's solvency and seek help from banking brokers when necessary.

Practical approaches to compliance

A practical approach includes asking coherent questions, defining a clear purchasing process, and maintaining good partnerships with financial institutions. This helps meet legal requirements and ensures a professional transaction for both buyers and sellers.