Liability of the broker for fees
An authorized broker has ordered a purchase contract for a seller at a notary’s office of the city of Zurich. The purchase contract could not be notarized subsequently. However, the notary’s office invoiced the broker for the fees. This is not an isolated case, which is why there is great legal uncertainty among brokers.
According to law, the fees are owed by the person who requested the official act. In the case of changes of ownership, they are owed equally by both parties. As a rule, a seller commissions an estate agent with the sale (purchase) of a property and grants him/her a power of attorney for this purpose. Based on the power of attorney, the broker is authorized to represent the seller in dealings with third parties. If an estate agent orders a purchase contract from the notary’s office, he does so in the name of the seller. In this way the seller – and not the broker – orders a contract of sale. It does not matter whether the broker has a general power of attorney or an authorization for individual actions. Accordingly, the notary’s office can only charge fees to the seller if the purchase contract is subsequently notarized publicly. In the opinion of the legal advisor of SCREA Zurich, a legal basis for the payment of fees by the broker is not apparent.
The Notary Inspectorate Zurich has discussed the matter with the notaries. They are of the opinion that the brokers require an official act within the meaning of Art. 29 para. 1 of the Notaries Act when they order a purchase contract for the seller (or buyer). In the opinion of the legal adviser, this view is wrong and completely ignores the relationship of representation between the broker and the seller (or buyer), which is obvious according to brokerage. The notary inspectorate does not make a clear statement on the matter. The suggestion that it should issue a directive to eliminate this legal uncertainty as the supervisor of the fee schedule (Art. 30 para. 1 of the Notary Public Act) was rejected. Rather, the Notary’s Inspectorate referred the matter to the Directorate of Finance, where an appeal can be lodged against a specific order relating to notary’s fees. From the legal advisor’s point of view, this proposal is unacceptable, since a case must first be awaited and the broker concerned would also have to bear the costs of an appeal or at least pre-finance them. It can be assumed that a letter to the financial directorate would have little effect.
In summary, the notary’s office inspectorate is not prepared to eliminate the legal uncertainty. The legal uncertainty can therefore only be removed by appealing to the Directorate of Finance or by amending the Notaries Act. After all, the Notary Inspectorate has noted the problems for a future amendment of the law. Until the legal uncertainty is removed, we recommend the following procedure to our members:
If an estate agent orders a purchase contract for a client in the future, he/she must explicitly state in writing that he/she is acting in the name and on behalf of the client and that the client (and not the estate agent) is thus requesting the official act as defined in Art. 29 para. 1 of the Notary Public Act. The broker should also submit a power of attorney to the notary, which explicitly authorizes him to order a purchase contract for the client.
However, if the broker wants to have absolute certainty that no fees will be imposed on him, the procedure outlined above is not sufficient. In order to obtain the greatest possible security, the broker would have to prepare the order of the purchase contract in the name of the client and have it signed by the client. Also the direct order by the client without preparation by the broker is possible. However, this is not a service and is probably not in the interest of the broker. At best, the customer could in both cases refer the notary public to the broker for further preparation, whereby here again it would have to be ensured in a suitable manner that the broker is not suddenly perceived by the notary public as the orderer of the official act.
Note on the text: The clarifications on the subject of “Liability of the broker for fees” were made on behalf of the SCREA Zurich and the Swiss Chamber of Real Estate Agents SCREA to the renowned law firm “Quadra Rechtsanwälte AG, Zurich”.
