Questions
Who pays the agency fees when a hotel is sold?
Updated
There is no single rule. Depending on the transaction, the intermediary’s fees are borne by the seller or by the buyer. What does not change is where this is written down: in the mandate, signed before any work begins, and then in every document sent to buyers.
Our own rule takes two sentences. Fees are set in the mandate in line with our fee scale. Who bears them is stated in the mandate and disclosed to the buyer at the first exchange.
What French law requires
In France, any intermediary involved in the sale of a hotel, its property, its business or the shares of the company that owns them is governed by the loi Hoguet. Several of its requirements concern fees directly:
- a written mandate, held before any work starts, stating the fee or how it is calculated, and which party bears it
- a fee scale displayed and available to the public
- a fee payable only if the transaction actually completes
- on documents, the details that allow the framework to be checked: professional licence, issuing chamber of commerce, financial guarantor
These details are a first check, for seller and buyer alike. Without a compliant written mandate, an intermediary has no right to any fee.
Seller or buyer: what difference it makes
Who bears the fees changes how the price is presented and read.
| Fees borne by the seller | Fees borne by the buyer | |
|---|---|---|
| Price presented | Fees included: the seller receives the price less the fees | Net to the seller: fees are added to the price |
| Cost to the buyer | Price, deed costs and duties | Price, fees, deed costs and duties |
| What the seller should check | The net amount actually received | That the total cost stays fundable for the target buyers |
The difference matters to the buyer: it feeds into their total acquisition cost, their financing plan and what they ask of their bank. The choice may also affect the basis for duties and each party’s tax position. This is checked with the notary and the accountant as at the date of the transaction.
How the buyer is informed
A buyer should not discover the fees at signing. In our files, the fee statement appears from the teaser onwards, then in the information memorandum. It mirrors the mandate and the published scale exactly: who pays, what percentage or fixed amount, on what basis.
A letter of intent is therefore drafted with full knowledge. The negotiation is about price and terms, not about a cost that surfaced along the way.
What the fees pay for
Transaction fees pay for running the sale: a reasoned valuation and sale strategy, preparation of the sale documents, selection and vetting of buyers, organisation of visits and the data room, negotiation, and coordination through to completion.
They are separate from deed costs and registration duties, which follow their own rules. The legal documents themselves are the work of the notary and the lawyer. We coordinate the timetable and the paperwork with them.
Why raise it at the first meeting
Because the answer shapes the asking price. A seller who thinks in net terms needs to know how the price will be presented. A buyer needs to compare opportunities on a like-for-like basis. Settled in the mandate and stated from the start, the subject does not resurface just when each side is trying to protect its position.
Our fee scale and regulatory details are published on the fees page. To discuss a specific transaction, a confidential conversation is the simplest start.
Planning a sale?
Let’s talk, in confidence.
Other questions
How do you sell a hotel discreetly?
By entrusting the sale, under an exclusive mandate, to an adviser who publishes nothing: no listings or portals, an anonymous teaser, an NDA before any identifying information, and qualified buyers approached one at a time. Staff and the market hear of the sale only when the seller decides.
Should you sell the property or the business of your hotel?
It depends on what you own and what you want to keep. Selling property and business together reaches the widest range of buyers. Selling the business alone requires a sound commercial lease. Selling the property alone means selling an investment backed by rent. If one company owns it all, you can sell its shares.
How long does it take to sell a hotel?
There is no standard time frame. It depends mainly on file preparation, the structure chosen (property, business or shares), the strength of the buyer and the conditions to be satisfied before completion. A sale runs in three phases: preparing, finding and negotiating with the right buyer, then signing and completing.