The plurality of mediators and the right to commission: Judgment 2878/2018 of the Court of Appeal of Rome

In this article, we examine what is provided for on the subject of plurality of mediators and the right to commission by judgment no.2878 of 2018 of the Court of Appeal of Rome and the most recent case law of the Supreme Court.

Real estate mediation is a fundamental service in real estate purchases and sales. It can sometimes happen that several mediators intervene in the same transaction. This situation raises a thorny question regarding the right to commission: who is entitled to, and to what extent, the mediation fee?

In this article, we will examine what was established by decision 2878/2018 of the Court of Appeal of Rome on the subject of the plurality of mediators and the right to commission, which, although dated, is also confirmed by the most recent case law of the Court of Cassation.

 First of all, some concepts need to be clarified.

WHAT DOES PLURALITY OF MEDIATORS MEAN?

A plurality of mediators occurs when several agencies or individual mediators mediate in the same transaction. This situation may arise, for example, when a buyer and seller use different brokers, or when one agency seeks the cooperation of another to expand its network and expedite the sale.

RIGHT TO COMMISSION: GENERAL PRINCIPLES

In Italy, the mediator’s right to commission is regulated by the Civil Code. Article 1755 of the Civil Code states that ‘the mediator shall be entitled to a commission from each of the parties, if the transaction is concluded as a result of his intervention’ and that ‘the amount of the commission and the proportion in which it shall be borne by each of the parties, in the absence of an agreement, professional rates or custom, shall be determined by the court in equity’.

In the case of a plurality of mediators, the case law of the Court of Cassation has led to the formulation of the principle that if the deal has been concluded through the intervention of several mediators, the right to commission arises for each mediator where the contribution of each of them is causal to the realisation of the deal.

The judgement 2878/2018 of the Court of Appeal of Rome under review traces precisely this case law of the Supreme Court.

The case submitted to the latter concerned a real estate sale for the completion of which the purchasing party had availed itself of the activity of two brokers:

• the purchasing party had initially entered into negotiations for the purchase of the property with a first broker, through whom it had viewed the property several times and subsequently submitted a purchase proposal, which was not accepted by the seller;
• subsequently, she approached a second broker with whom she had first made a second offer to purchase, then accepted by the seller, and then entered into the contract of sale of the property brokered;
• In light of these facts, the first broker had requested the Civil Court of Rome to order the purchaser to pay the sum of €18,400.00 plus statutory interest by way of commission according to Article 1755 of the Civil Code, which, by decree, had granted that request;
• The purchaser appealed against this decree, thus instituting ordinary proceedings in which it raised, among other objections, the non-existence of the mediator’s right to payment of the commission and requested the revocation of the decree. The first mediator had entered an appearance, rejecting the objections and insisting on the legitimacy of the claim, as well as on the mediation activity regularly carried out in favour of the opponents, and requested the confirmation of the opposed injunction decree;
• the Court had rejected the opposition and revoked the injunction, sentencing the purchaser to pay the first mediator the sum of €4,900.00 plus statutory charges, and awarded the litigation costs between the parties.

The Court of Appeal was therefore called upon to resolve this issue:

Is the first mediator entitled to payment of the commission by the buyer or not, and if so, to what extent?

Confirming the first instance judgment of the Court of Rome, the Court of Appeal admits the first mediator’s entitlement to payment of the commission, despite the subsequent intervention of a second mediator, through whom the contract for the sale of the mediated property was then concluded.

Supreme Court decision No. 869/2018 emphasised that the intervention of a second mediator does not break the causal link between the activity of the first mediator and the conclusion of the bargain, therefore, for the payment of the right to commission it is not necessary that the concrete conclusion of the bargain is reached, but it is sufficient to play a decisive and causal role in it.

Consequently, the mediator must relate the will of the parties, albeit in a complex and articulated process over time, and for that relationship to be the indispensable antecedent to the conclusion of the contract, in accordance with the principles of proper causality.

The Court of Appeal found that the first mediator’s causal contribution was realised in initiating contacts between the parties, including an initial viewing of the property by the prospective purchasers, and that it found its maximum concretisation in the formulation of a purchase proposal, albeit not accepted by the seller.

The circumstance that the second proposal made by the purchasers, and then accepted by the seller, had as its counterpart a price slightly different from the first, is not relevant as a factor excluding the causal link between the two mediation activities, since a single element of differentiation is not sufficient to interrupt it.

“… In the opinion of the Court, therefore, does not assume relevance – from the point of view of the impact on the exclusive or concurrent causal efficiency of the work of that mediator – the absolute identity of the conditions under which the negotiation was completed only later, and with the intervention of another mediator, not being a single element of partial differentiation, alone, capable of breaking the causal link between the activity originally carried out by the person who first put the parties in contact with each other and the deal between them concluded.”

As regards the amount of the first mediator’s commission, the Court refers generically to the principle of equity laid down in Article 1755 of the Civil Code.

In the absence of criteria for determining the mediation fee, the Court of Appeal applies the criterion of determining the amount as 50% of the fee paid to the second mediator.

The Supreme Court then specified (see Judgment No. 15484 of 2008) that:

“in matters of mediation, Article 1758 of the Civil Code does not have the character of a special provision with respect to the previous Art. 1755, so that, even when the conclusion of the deal has been determined by the intermediary activity of several persons, the party obliged to pay the commission is always and only each of the parties between whom the deal was concluded, whereas the plurality of mediators entails, given the divisibility of the obligation, the application of the rule under Art. 1314 of the Civil Code; therefore, since each of the mediators, according to the aforementioned Art. 1758 of the Civil Code, is entitled to a share of the commission, the parties shall be entitled to the payment of the commission, Therefore, since each of the mediators, according to the aforementioned Art. 1758 of the Civil Code, is entitled to a share of the commission, the obligor may be considered discharged only when he has paid to each the share due to him, unless the solidarity of the obligation has been agreed upon from the asset side, in which case the payment of the entire commission to only one of the mediators is discharging and the others have an action exclusively against the latter to obtain their share.”

This article has been updated to the latest regulations thanks to the advice of Attorney Mariangela Marrangoni, partner of the Great Synergy network and professionals, who is available to all Great Estate Group clients for legal advice specialising in international law.

The public content of this website is for informational purposes only and is not intended to be all-inclusive, nor to provide legal or other professional advice, nor is it intended for any commercial or client relationship or transaction purposes.

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