The real estate agent’s right to commission: a new ruling of the Italian Supreme Court

Introduction

On 5 December 2024, the Supreme Court, in Order No. 31187, returned to the issue of the real estate agent’s (or real estate broker) commission.

The Court reiterates that this right arises when the conclusion of the deal is directly linked to the the real estate agent’s activity, in such a way that without his intervention, the deal would not have been concluded.

The real estate agent’s entitlement to commission

The entitlement of the real estate agent to commission is governed by Art. 1755 of the Italian Civil Code, according to which “the real estate agent is entitled to commission from each of the parties if the transaction is concluded as a result of his intervention”.

This statement is closely related to the framing of the figure of the real estate agent (Art. 1754 of the Italian Civil Code) as the one who brings together two or more parties for the conclusion of a deal, without being linked to any of them by relationships of collaboration, dependence or representation.

However, numerous questions and doubts of interpretation have often arisen, especially with regard to the definition of ‘conclusion of the deal’, also with reference to the hypothesis that, over time, several real estate agents follow the same deal.

In other words: who is entitled to collect the commission if two or more real estate agents follow one another in handling the same deal with the same parties over time?

It is precisely on the basis of this question that Order No. 31187/2024 of the Supreme Court provides an answer.

The facts

In the present case, the real estate agency Alfa appealed to the Supreme Court against the decision of the Court of Appeal, which upheld the decision of the Court of First Instance.

The Court of Appeal held that the appellant, real estate agency Alfa, was not entitled to the commission because it had not contributed to the conclusion of the transaction.

In fact, the buyer had learned of the sale of the property not only from the Alfa agency but also from other sources, including the Beta agency.

The ruling also stated that the Alfa real estate agency had not even contributed to the parties reaching an agreement.

Grounds of appeal

Alfa agency, among other grounds of appeal, puts forward one relating to the misapplication of Articles 1754 and 1755 of the Italian Civil Code insofar the Court of Appeal excluded its causal efficiency in the conclusion of the deed.

Alfa real estate agency, on the contrary, considers that its activity was causally linked to the conclusion of the sale deed, which was subsequently carried out by the parties.

The Supreme Court’s pronouncement

The Supreme Court reiterates how the real estate agent’s right to commission exists towards each party, if the deed is concluded as a result of his intervention, and in any case, when the parties (seller and buyer) accept the mediator’s activity and take advantage of it.

For the Court, therefore, also in line with previous pronouncements, the real estate agent must prove the causal link between the his or her activity and the conclusion of the deed.

And thus the right to commission arises whenever the conclusion of the deal is causally connected to the real estate agent’s activity; specifying that the intermediary activity occurs whenever the real estate agent usefully brings the parties together by intervening in the various stages of negotiations.

The Supreme Court, at the same time, emphasises that there is no entitlement to commission in the event that a negotiation initiated with the real estate agent’s intervention is unsuccessful, and the parties subsequently come to the conclusion of the bargain independently and in any event not connected to or conditioned by the his or her activity. In this regard, reference may be made to Article 1755, according to which the real estate agent’s right to commission follows the conclusion of the transaction, which is understood to be any transaction of an economic nature that generates an obligatory relationship between the parties.

Moreover, the judgement concerning the existence of this nexus must be made after the deed is completed and, if necessary, proved by the real estate agent itself.

Thus, the Court excludes that the mere fact of having put the parties in a relationship with each other is sufficient to prove the existence of the causal link.

In this case, in fact, the selling party and the purchasing party were put in contact by the Beta agency, which also provided for a reduction in the purchase price, so as to facilitate the conclusion of the deal by bringing the parties closer together.

According to Art. 1758 of the Italian Civil Code, when the transaction is concluded with the intervention of several real estate agents, each is entitled to a share of the commission.

On the basis of this, the real estate agency Alfa argues that it is entitled to a share of the commission, the transaction having been concluded due to the concurrent interventions of both agencies (Alfa, the plaintiff, and Beta).

The Court reiterates, again in line with other previous guidelines, that this is true when the real estate agents have either cooperated simultaneously and by common agreement; or have acted independently but benefiting from each other’s activity and, moreover, there is an objective causal link between their interventions and the conclusion of the deal.

In the present case, the Supreme Court rejects both grounds of appeal, reaffirming that, the real estate agency Alfa is not entitled to the commission.