The mediation agreement is a legal document that defines the terms and obligations between the client (seller or lessor) and the real estate agency. This contract defines the type of services provided by the agency, the duration of the contract, the amount of the commission or fee charged by the agency, as well as the rights and obligations of both parties.
It is necessary that the agreement reached orally be precisely formulated and made official by the signatures of the real estate owner and the responsible person in the agency. Most often, it is the executive director or another authorized person in the agency, with a mandatory stamp to make the contract valid. The mediation agreement has a specific form, and this document defines all the facts that are important for legal work. Each mediation agreement contains the provisions of the agency's
general terms of business, but in order not to burden the contract, the general terms of business are made available to the client, and by signing the contract, he confirms that he agrees with them. It is a standard practice, and the general terms and conditions of business should be prominently displayed on the intermediary's business premises as well as on the agency's website.
Agreements on mediation in traffic and rental of real estate are concluded between the owner, whether he is a legal or natural person, and the agency as an intermediary. Therefore, agents, as natural persons, are not intermediaries but are engaged to work for an intermediary—an agency. Therefore, the owners must be aware of this fact so that persons working outside the legal framework would not mislead them and conclude invalid contracts with them.
The basic items contained in the contract on mediation in traffic and rental of real estate are:
Contractual parties (part of the contract in which the data of the real estate owner and the agency are specified)
Subject of the contract (it is necessary to specify precisely the information about the property that is the subject of sale or lease)
Contract duration (most often contracts are concluded for one year with the possibility of extension)
Initial price (the price of the real estate at which it will be advertised and offered to clients is defined, and can be adjusted at the request of the owner or with the suggestion of an intermediary, with the obligatory consent of the owner)
Commission and fees (the agency commission is expressed as a percentage and is calculated about the price reached in the purchase agreement, and in the case of a lease agreement, it is usually the amount of one monthly rent, and it is possible to agree on fees regardless of the success of the mediation)
Obligations of the agency (the services that the agency will provide to the principal during mediation are specified and most often include marketing services, advertising, negotiation, and presentation of real estate, i.e. all those actions that must be undertaken to realize the legal work)
Obligations of the principal (the owner of the real estate undertakes certain obligations and they are reflected in the fact that he submits ownership documentation to the intermediary for review, allows tours of the real estate in the manner agreed with the intermediary, pays the intermediary commission and other fees if they are agreed upon, as well as respecting the items of the contract)
Termination of the contract (each contract is concluded for a certain period, but under certain conditions, it can be terminated, while previously assumed obligations should be regulated regardless of the termination of the contract)
Other provisions (relating to specific details, dispute resolution, and laws applicable to matters not defined in the contract)
There are two types of agency contracts: standard and exclusive. You can get acquainted with their details and differences in the text found at this link.
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