EU law does not preclude capping an estate agency commission at 4% of the sale or rental price, said the Court of Justice of the European Union on Thursday 27 February in a judgment examining a Slovenian law on estate agency services.
However, “that legislation [must] not go beyond what is necessary to attain the objectives which it pursues”, says the Court.
The latter was in response to a request from the Slovenian Constitutional Court concerning the constitutionality of a national law capping the commission charged for these services in the event of the purchase, sale or rental of a property and stipulating that, in the case of purchase or sale, the commission may not exceed 4% of the contract price.
Under this law, an intermediation contract that does not comply with this capping is considered null and void.
The Slovenian court’s request for a preliminary ruling concerned the interpretation of Article 15 of the directive on services in the internal market.
The case was brought by AEON nepremiČnine e.a. and STAN nepremičnine, providing property intermediation services, and by the National Council of the Republic of Slovenia.
The Slovenian court’s doubts relate more specifically to the capping applied to intermediation services for a single-family home, flat or residential unit purchased or rented by a natural person.
The Court of Justice points out that a measure such as that provided for in the Slovenian law may be accepted if it “is not discriminatory, (...) is justified by an overriding reason relating to the public interest and is [proportionate]”.
And it considers the condition of non-discrimination satisfied, since the capping on commissions applies regardless of the nationality or location of the registered office of the property services provider.
“The cap on commissions (...) is not discriminatory since that cap applies irrespective of the location of the registered office of the property company concerned. [As far as justification is concerned,] the cap [appears likely] to promote the accessibility of adequate housing at affordable prices, [given that] the amount of the commission (...) is likely [to be] reflected in the sale price or rent”, summarises the Court.
This is particularly important for “vulnerable persons, namely young people, and more specifically students, as well as for the elderly. [This measure can also] protect consumers having regard to price transparency and the lack of available housing”.
Further information: https://aeur.eu/f/fob (Original version in French by Solenn Paulic)