Real Estate Commission Right: a Toscano Case Study

This month’s article is inspired by a dispute between one of our agencies and a client regarding the failure to pay the remaining commission due following the conclusion of a preliminary sales agreement. The matter was recently addressed by the competent judicial authority.

After signing the preliminary contract as the prospective buyer, the client refused to pay the remaining commission amount set out in the commission agreement previously signed. According to that agreement, the balance was to be paid upon the execution of the final notarial deed of sale. The client justified the refusal by claiming that the services provided by the agency did not comply with what had been promised.

After several unsuccessful payment reminders, the agency requested and obtained from the competent court the issuance of a payment order (decreto ingiuntivo) for the outstanding amount. The client opposed the payment order before the same court through a formal writ of summons, requesting the annulment of the payment order and the reimbursement of the commission deposit already paid. The agency duly appeared in the opposition proceedings to contest the client’s claims and request confirmation of the payment order.

In essence, the client’s objections consisted in attributing responsibility to the agency for the fact that, after the preliminary contract had been signed, it emerged that the property subject to the sale:

• was subject to a landscape protection restriction;
• had structural issues that prevented the issuance of an occupancy certificate.

However, the documents produced in court showed that the parties had nevertheless completed the transaction, subject to the non-exercise of the right of pre-emption by the Ministry of Cultural Heritage and Activities (a condition that was ultimately verified), and by renegotiating the original sale price (essentially, the seller granted the buyer a discount).

The agency argued that it had never been aware of the structural defects and that, in any case, the statutory right of pre-emption had not actually prevented the completion of the sale.

After examining the case, the judge ruled as follows:

• the client ultimately proceeded with the completion of the sale, for which the commission had been expressly acknowledged;
• the right to commission is unquestionable since “for the mediator’s right to commission to arise, it is sufficient that the conclusion of the transaction can be linked to the work carried out by the mediator in bringing the parties together, provided that such activity represents the useful result of the mediator’s conduct and is subsequently valued by the parties. It is irrelevant whether the mediator’s work was completed in an efficient and suitable manner after the expiry of any contractual term, since the existence of such a term does not indicate the principal’s intention to reject the mediator’s activity performed beyond that deadline” (Italian Supreme Court, Civil Division, no. 5348/09).

Based on this principle, repeatedly reaffirmed by the Italian Supreme Court of Cassation, the court found that the agency’s right to commission was fully justified. In this case, there was no doubt that the sale agreement concluded by the opposing party was causally connected to the activity carried out by the agency.