Mac Mahon Avocats is a Paris business law firm at 33 avenue Mac-Mahon, Paris 17. Its lawyers advise real estate agencies & property managers businesses on prevention of difficulties, out-of-court procedures, formal insolvency proceedings and distressed disposals under French law. This page sets out the applicable legal framework; it does not constitute legal advice.
Sales agencies, real estate networks and franchises, self-employed agent networks, property managers, condominium managing agents, letting management and short-term rental operators.
Estate agency is a regulated activity under the Hoguet Act of 2 January 1970 and its implementing decree of 20 July 1972: a professional licence issued by the chamber of commerce, a financial guarantee and professional indemnity insurance. Transaction income depends on sales volumes and interest rates, while letting and condominium management generate recurring fees. Financial difficulty immediately raises the question of maintaining the licence and financial guarantee, and of funds held on behalf of third parties.
| Procedure | Entry condition | Duration | Legal basis |
|---|---|---|---|
| Ad hoc mandate | No cessation of payments | Set by the court president, renewable | Art. L. 611-3 Commercial Code |
| Conciliation | Actual or foreseeable difficulties; cessation of payments for 45 days at most | 4 months + 1 month | Arts. L. 611-4 to L. 611-16 |
| Safeguard | Insurmountable difficulties, no cessation of payments | Observation period 6 months, extendable to 12 | Art. L. 620-1 et seq. |
| Rehabilitation | Cessation of payments, recovery possible | Observation period up to 18 months | Art. L. 631-1 et seq. |
| Liquidation | Cessation of payments, recovery manifestly impossible | Variable; business continuation 3 months, renewable | Art. L. 640-1 et seq. |
A declaration of cessation of payments must be filed within 45 days of that state arising, unless a conciliation request is filed within the same period (Art. L. 631-4 of the French Commercial Code).
The licence is granted subject to competence, good standing, insurance and financial guarantee conditions (Act No. 70-9 of 2 January 1970). Insolvency proceedings do not entail automatic withdrawal, but the loss of the financial guarantee or a court-ordered management ban may prevent the business from continuing. Each situation must be reviewed against the applicable statutory conditions.
Those funds are held for third parties and must be kept in segregated accounts. They are not intended to be merged with the debtor's available assets; the mandatory financial guarantee is designed precisely to cover the representation of such funds, on the terms of the guarantee contract.
The general meeting of co-owners remains competent to appoint a new managing agent, and the president of the judicial court may appoint a provisional administrator at a co-owner's request where there is none (Act No. 65-557 of 10 July 1965). Transfer of funds and records follows the rules applicable to an outgoing agent.
Commissions arising before the opening judgment are pre-opening claims to be filed within two months of BODACC publication (Art. L. 622-24 Commercial Code). Post-opening services useful to the continuation of the business fall under the priority regime for post-opening claims (Art. L. 622-17).
Yes. A portfolio of mandates may be transferred out of court or under a court-approved sale plan (Art. L. 642-1 Commercial Code), subject to the terms of the mandates concerned, information of the principals and the buyer holding the required professional licences.
Yes. An ad hoc mandate (Art. L. 611-3) and conciliation (Art. L. 611-4 et seq. Commercial Code) are confidential and allow bank debt, rent and public debt to be addressed before cessation of payments; conciliation remains available within 45 days of that state arising.
Phone: +33 1 45 03 20 20
Email: accueil@macmahon-avocats.fr
Address: 33 avenue Mac-Mahon, 75017 Paris, France