In this episode, Glenn Janssens discusses the terms and conditions governing estate agents’ commission when buying or selling property in Spain. He explains who is liable to pay the commission, how Spanish contract law and customary law work, and at what point an estate agent is entitled to their fee.
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Key insights & topics
- Who pays the commission?
- Basic rule (Article 1257 of the Spanish Civil Code): A contract is binding only on the signatory parties. As the estate agent usually acts on behalf of the seller, the commission is, in principle, payable by the seller.
- Exceptions: A buyer only pays a commission if a search request or purchase mandate has been explicitly signed, or if the estate agent clearly informs the buyer of local customs before the viewing (such as in Valencia city, where the commission is often shared).
- Fees and Customary Law
- Freedom of contract: Estate agency agreements are non-standard contracts. Fixed fee scales (such as those set by the API) have been prohibited under competition law since 2009.
- Competitive rates: Under customary law, the commission on a sale is generally between 3% and 5% (excl. VAT) of the sale price. For lettings, this is 1 to 2 months’ rent.
- Costs included: Expenses such as advertising, photography and travel are included in the commission and may not be charged separately, unless otherwise agreed in writing in advance.
- When is the commission payable?
- Case law: According to the Spanish Supreme Court, the commission is payable as soon as there is mutual agreement (for example, upon signing a booking contract or contrato de arras).
- Risk when jumping off: If the sale falls through due to the buyer’s actions (e.g. failure to secure financing), the estate agent is, in principle, entitled to their commission. This does not apply if the sale is rescinded on legitimate legal grounds (such as structural or illegal defects) by virtue of a condition precedent.
- Top tip: Ensure that the agreement explicitly states that the commission is only due and payable upon the execution of the notarial deed.
Advice & Contact
Are you unsure about a tenancy agreement, or are you dealing with a pushy estate agent? Contact Confianz to protect your interests.
