Real estate mandate in Luxembourg: prefer a written mandate to an oral one

In Luxembourg, although a verbal real estate mandate is in principle permitted, it is recommended to conclude a written mandate for several reasons. A written mandate provides a clear basis for cooperation between the real estate professional and the client and protects both parties in the event of misunderstandings or disputes.

In addition, a written contract facilitates compliance with legal requirements, such as anti-money laundering legislation in Luxembourg. In this article, we will examine the benefits of a written real estate mandate and the key elements that should be included.

Benefits of a written mandate:

a) Clarification of responsibilities and expectations

A written mandate allows the responsibilities and expectations of each party to be clearly defined. The terms of the mandate can include details of the services to be provided by the property professional, the client's obligations and payment terms.

b) Legal protection in the event of a dispute

In the event of a dispute or disagreement, a written mandate provides legal evidence of the agreements reached between the parties. This can be crucial in resolving disputes and protecting the rights of both parties.

c) Compliance with the law

A written mandate helps to ensure compliance with legal requirements, such as anti-money laundering legislation in Luxembourg. It also ensures that data protection and confidentiality obligations are respected.

Key elements to be included in a written real estate mandate

a) Type of mandate

It is important to specify whether the mandate is exclusive or non-exclusive. An exclusive mandate means that the client agrees to work with only one real estate professional to sell or buy a property, while a non-exclusive mandate allows the client to work with several agents.

b) Duration of the mandate and termination conditions

The duration of the mandate must be clearly stated, as must the conditions for termination. This includes the required notice period and any penalties for early termination of the contract.

c) Scope of services to be provided

The mandate should specify the services to be provided by the real estate professional, such as promoting the property, negotiating offers and coordinating viewings.

d) Amount of commission and terms of payment

The mandate should specify the amount of commission the real estate professional will receive and the terms of payment, including any advances or additional fees.

e) Obligations of the client

The contract should also describe the client's obligations, such as providing documents necessary for the sale or purchase of the property, attending viewings and providing accurate and complete information.

f) Data Protection and Confidentiality

The mandate should address data protection and confidentiality issues and specify how the client's personal information will be handled and protected.

In summary, although a verbal real estate mandate is permitted in Luxembourg, it is preferable to opt for a written mandate in order to ensure transparent and secure cooperation between the parties, as well as compliance with the applicable regulations. By taking the time to draw up a complete and detailed written mandate, real estate professionals and their clients can work together in complete confidence and avoid misunderstandings and potential disputes.

Key elements to be included in such a mandate include the type of mandate, duration, scope of services, fees, client obligations and data protection and confidentiality provisions. Ultimately, a well-drafted written mandate is an invaluable tool in ensuring the success of a property transaction and protecting the interests of all parties involved.