After signing the contract, he reneged, but the agency fee cannot be evaded.
Compiled from: Shandong High Court, People's Court Daily
Northwest Real Estate Company provided housing listings and property viewing services to buyer Ms. Hou, facilitating her signing of a house purchase contract. However, Ms. Hou later refused to buy the house, citing urgent need for money and inability to afford it. Northwest Real Estate Company sued in court, demanding Ms. Hou pay an intermediary service fee of 450,000 yuan. Recently, the Haidian District People's Court in Beijing concluded the case, ruling that Ms. Hou pay an intermediary fee of 100,000 yuan.
Case Review
Northwest Real Estate Company alleged that in 2022, Ms. Hou expressed interest in purchasing a villa. The company then provided intermediary services for Ms. Hou, offering multiple properties and arranging several on-site viewings, ultimately facilitating the signing of a house purchase contract between Ms. Hou and the homeowner for a villa valued at 30 million yuan. Northwest Real Estate Company signed an intermediary contract with Ms. Hou, stipulating an intermediary fee of 450,000 yuan. Later, Ms. Hou decided not to buy the house due to cash flow issues and privately terminated the house purchase contract with the homeowner, ignoring the company's request for payment of the intermediary fee. Northwest Real Estate Company argued that it had provided and completed the intermediary services for Ms. Hou, and although she ultimately did not purchase the house, she should still pay the full intermediary fee.
Ms. Hou argued that the housing sale contract was not established, so she should not pay the agency fee.
After trial, the court held that Northwest Real Estate Company had provided Ms. Hou with services such as housing sale information, transaction procedures, transaction risks, market consultation, and on-site property inspection, and had facilitated the signing of a housing sale contract between Ms. Hou and the homeowner. Since Ms. Hou terminated the housing sale contract due to her own reasons, not because of any defect in the services of Northwest Real Estate Company, Ms. Hou should pay the agency service fee to Northwest Real Estate Company as stipulated in the housing intermediary contract. Northwest Real Estate Company acknowledged that it had not yet provided services such as property verification, purchase qualification verification, assistance with online signing, and property transfer to both parties of the sale contract. Therefore, the housing sale contract was not actually fully performed, which objectively reduced the workload and cost of Northwest Real Estate Company's subsequent services. Thus, the court exercised its discretion in determining the amount of agency fee Ms. Hou should pay to Northwest Real Estate Company. The court ultimately rendered the above judgment.
After the judgment was announced, neither party appealed. The judgment has taken effect.
[1] Civil Code
Article 961
An intermediary contract is a contract in which the intermediary reports to the client opportunities for entering into a contract or provides intermediary services for the conclusion of a contract, and the client pays remuneration.
[4] Author's Opinion
A real estate agency company provides services and enters into an intermediary contract, i.e., an intermediary contract, with the client. Based on the above legal provision, once the contract is established, the intermediary shall perform its intermediary obligations in accordance with the client's instructions. Once the intermediary's activities yield results, the client is obligated to pay remuneration.
In this case, under the intermediary services of Northwest Real Estate Company, Ms. Hou had already signed a house purchase contract with the homeowner. Due to personal reasons, Ms. Hou failed to complete the transaction, but this does not affect the lawful establishment of the intermediary contract between Ms. Hou and Northwest Real Estate Company. Therefore, Ms. Hou should pay the corresponding service commission to Northwest Real Estate Company. However, considering that in the general home-buying process, in addition to the services listed in the intermediary contract, the intermediary company would also provide services such as property verification, purchase qualification verification, assistance with online signing, and property transfer. Since Ms. Hou did not continue to perform the contract, Northwest Real Estate Company did not provide these services, objectively reducing the workload and cost of subsequent services for Northwest Real Estate Company. Therefore, the court determined that Ms. Hou only needs to pay an intermediary fee of 100,000 yuan.
