Legal Counsel in European Real Estate Conveyances: Brokers and Notaries

Purpose - Real estate conveyances are accomplished in different ways and by different players in the EU member states. In Sweden, the key player is the broker, whereas in France and other civil law countries, the notary has that role. The purpose of the paper is to examine the scope and nature of the non-litigious legal counsel buyers and sellers of residential real estate can expect to receive from the broker under the Swedish regime, compared to the notary under the French regime. The purpose is also to discuss and evaluate the two regimes, with respect both to the desirability of legal counsel in residential real estate conveyance, and to assigning those tasks to the broker and the notary respectively.Methodology/approach - The paper is based on my doctoral thesis presented in January, 2013. The study is a comparative legal study conducted in two steps: first, the role of the broker is compared to that of the Latin notary in nine civil law countries. After that, the duty to counsel of the broker is juxtaposed with that of the French notary. Being a legal study, it is based on legal sources such as statutes, case law, and jurisprudence.Findings - The Swedish broker and the Latin notary are both held to a duty of impartiality and a duty to counsel. The duty to counsel of the Swedish broker and the French notary consists in four sub-duties: to conduct verifications and ascertain certain facts, to disclose relevant information, to give adequate advice, and to draw up the necessary deeds. The desirability of mandatory legal counsel, as well as the choice of assigning counseling role to the broker or the notary, has clear economic implications. However, it is less than clear whether or not regulation of the examined kind is conducive to economic efficiency. One problem is that the existing models fail to take into account central factors such as one's ideological view on consumers' rights and state intervention in the marketplace. Therefore, it seems a more fruitful enterprise to evaluate the regimes' institutional robustness; that is, their ability to fulfill their intended purpose. For instance, the incentives of the key players may be detrimental to the proper functioning of the regime. Future research should focus on institutional robustness.Originality/value - The paper highlights an important, though often neglected, factor for evaluating the regimes for conveyances, namely impartial legal counsel to consumers.