Brokerage in civil law

Abstract

The subject with which we are concerned in this dissertation is that related to 'is-senserija fil-kamp civili'. In introducing this topic a brief overview of the legal history was appropriate. The first chapter discusses the issue related to the juridical nature of brokerage. Initially a number of theories were examined followed by a detailed examination of various judgements delivered by the Maltese courts in this connection. This first chapter concludes by establishing the obtainable position in Malta wherein it is laid down that for one to be able to speak of a contract of brokerage the following elements must be present : [a] : the conclusion of the transaction; [b] : the intermediary activity must have been demanded, or accepted, even tacitly, by both parties; [c] : the activity of the intermediary brought the parties to the 'in idem placitum consensus'. The affinity of brokerage to other institutes is the matter discussed in the second chapter wherein comparison was made with the institute of agency, procacciamento di affari, the activity of the nuncius and mandate. In the third chapter we discussed the provisions of the law which regulate this institute, these being section 1361 (2), section 1362 and section 2148 of the Civil Code and section 11 of the Rent Restriction (Dwelling Houses) Ordinance (Chapter 116). The issue with which these provisions are mostly concerned is that related to the quantum of brokerage fees payable, and in discussing this issue we went further then what is established by law in that, besides the amount of brokerage fees due on the occasion of a sale transaction, we also discussed the quantum of brokerage fees due in connection with a lease transaction and emphyteutical grants. The principles established were the following : [a] : as regards sale of movables 1% brokerage fees are due whilst in the case of immovables 2%, unless agreement as to a different amount had been entered into; [b] : on the occasion of a lease agreement of furnished dwelling houses the quantum of brokerage fees payable is that equivalent to one half (1/2) of a month's rent, unless otherwise agreed upon; if the dwelling house being let is unfurnished then the quantum of brokerage fees is determined by applying 1% on the total rent for the period agreed upon; in both cases the amount of brokerage fees due can never exceed the equivalent of one half of a month's rent. If the subject of the lease agreement is a commercial premises, then the amount of brokerage fees due are the equivalent to 1% of the total rent for the period agreed upon, unless there exists an agreement specifying otherwise; [c] : as regards perpetual emphyteutical grants the amount of brokerage fees due is that of two thirds (2/3) of a year's ground rent, or 2% of the ground rent capitalised at 3%. If any premium has been paid a further 2% on the premium is due; on the occasion of a temporary emphyteutical grant the most reasonable criteria to be followed is that of multiplying the annual ground rent by the number of years for which the grant was made, and then applying 2% on this amount. [d] : in connection with the issue as to who is to pay such brokerage fees the general principle is that it is to be paid one half each by the contracting parties, but this can be varied by an agreement specifying otherwise; [e] : the prescriptive period within which a broker can sue for brokerage fees due to him is established at eighteen (18) months. Compensation for services rendered is the issue discussed in the fourth chapter, wherein it is established that if the elements necessary for the right to brokerage fees to exist then the following principles are to apply: [a] : if the transaction was concluded, but by another intermediary or under different terms and conditions then those originally proposed, an the intermediary had rendered the intermediary activity upon specific appointment, then the broker is entitled to compensation on the basis of mandate or locazione d'opera; [b] : if the transaction was not concluded but had reached the stage wherein the parties had arrived at the 'in idem placitum consensus', usually evidenced by the fact that the parties had entered into a 'konvenju', the broker is entitled to compensation by way of brokerage; [c] : if the transaction ends at a stage where the parties have not reached any form of agreement, the intermediary is entitled to compensation on the basis of mandate or locazione d'opera if he had acted upon a specific appointment. [d] : the determination of the amount of compensation due is determined by the Court 'arbitrio boni viri'. In concluding this dissertation we examined any possible amendments which could be introduced, basing such exercise on the obtainable Italian position.