HAVET & VANHUFFEL – Association d’avocats
The Court of Justice of the European Union held in a judgment of 27 February 2025 (Case C-674/23) that Article 16 of the Charter of the European Union, which guarantees the freedom to pursue an economic or commercial activity, freedom of contract and free competition, and covers, inter alia, freedom of prices and Article 15, (3) of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market do not preclude the capping, by law, of the commission of a real estate agency at 4% of the sale or rental price, provided that that legislation does not go beyond what is necessary to achieve the objectives which it pursues and that there are no other less restrictive measures to enable to achieve the same result.
A question referred for a preliminary ruling by the Constitutional Court of Slovenia (decision of 26 October 2023), concerned the compliance of Article 5 of the Slovenian Law on Real Estate Intermediation, which provides for a maximum remuneration for real estate agents of 4% of the transaction price, with the European regulations on the freedom of prices and services.
Article 5 of that law is worded as follows:
« (1) The maximum remuneration authorised for intermediation may not exceed 4% of the contract price in the case of the acquisition or sale of the same property, but this limit shall not apply where the contractual value of the property is less than EUR 10,000.
(2) The maximum remuneration authorised for intermediation may not exceed 4% of the contractual value for a lease of the same property, and in any event may not exceed the amount of one month‘s rent and less than EUR 150. The contractual value mentioned in the previous sentence is the product of the amount of the monthly rent and the number of months for which the property is rented.
(3) A real estate company may invoice the principal for intermediation services only on the basis of a real estate intermediation contract.
(4) An intermediation contract contrary to paragraphs 1, 2 and 3 of this Article shall be null and void.
(5) A clause in a contract of sale, lease, leasing or any other type of contract (hereinafter referred to as « contract« ) contrary to paragraphs 1, 2 and 3 of this Article shall be null and void.
(6) The Minister responsible for housing may, by regulation, and in agreement with the Minister for the Economy, set the criteria for pricing real estate intermediation services within the limits of the maximum remuneration authorised for intermediation referred to in paragraph 1 of this Article. (7) The provisions of paragraph 2 of this Article shall not apply to immovable property intermediation contracts concluded between economic operators. »
For the defenders, the cap on fees for real estate intermediation services aims, on the one hand, to promote the accessibility of adequate housing at affordable prices for vulnerable people, namely young people, in particular students, as well as the elderly and, on the other hand, to contribute to consumer protection by strengthening price transparency.
For the applicants in the main proceedings, less restrictive measures which they consider to have been possible, namely an increase in the number of social housing units intended for rental, the subsidisation of renting on the market and tax, zoning and other regulatory measures to encourage the construction of social housing. The Commission, for its part, refers to measures to support the supply of affordable housing or to provide buyers and tenants with useful information on intermediation tariffs, so that this state intervention was not contrary to European legislation.
For the Court of Justice of the European Union, Article 16 of the Charter includes the freedom to pursue an economic or commercial activity, freedom of contract and free competition and covers, in particular, the freedom to determine the price charged for a service.
However, the freedom to conduct a business is not an absolute prerogative, but must be taken into account in relation to its function in society. That freedom may thus be subject to a wide range of measures by the public authorities which may establish, in the public interest, limitations on the exercise of economic activity, provided that that legislation does not go beyond what is necessary to attain the objectives which it pursues and that there are no other, less restrictive measures capable of achieving the same result.
Therefore, in the Court‘s view, Article 15(3) of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market, read in the light of Articles 16 and 38 of the Charter of Fundamental Rights of the European Union, must be interpreted as not precluding national legislation which, With regard to the acquisition or rental by a natural person of a single–family dwelling, apartment or residential unit, provides for a cap on the commission applied to real estate intermediation services:
– in the context of the acquisition or sale of immovable property with a contractual value of EUR 10 000 or more, at 4% of the price provided for in the contract and,
– in the case of a rental, to 4% of the product of the amount of the monthly rent and the number of months for which the property is rented, it being understood that that commission may not exceed the amount of one month‘s rent, provided that that legislation does not go beyond what is necessary to achieve the objectives which it pursues and that there are no other less restrictive measures to achieve the same result.
According to the Court of Justice of the European Union, it will therefore be for the referring court, the Supreme Court of Slovenia, to examine:
whether the amount resulting from the cap on fees for the real estate intermediation services at issue in the main proceedings is set at a level that is too low to cover the costs of those companies and to enable them to make a reasonable profit and to allow price competition;
whether there are other measures, less restrictive than the cap on fees for real estate intermediation services, that can achieve the objective of the cap, which is to promote the accessibility of adequate housing at affordable prices for vulnerable people.
To consult the judgment, follow the following link: https://curia.europa.eu/juris/document/document.jsf?text=&docid=295848&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=21656477.