Buyer disappears after signing property deal in France - should estate agents be liable?

What happens when a potential buyer signs a preliminary sales agreement and then disappears into thin air? Is the estate agent partly responsible?

This was the situation faced by a couple in Roubaix (Nord). They had signed a preliminary sales agreement for their property with a man, named only as Mr Y, for €850,000 in January 2020.

The 33-year-old buyer had described himself as a filmmaker when he asked an estate agency in nearby Marcq-en-Baroeul to help find him a house, according to a report in Le Monde. 

He claimed he had a maximum budget of €900,000 and would pay in cash. 

The preliminary sales agreement he signed included a deposit of €10,000, and a penalty clause of €115,000, split into €85,000 for the buyer and €30,000 for the estate agency, payable if he refused to sign the final deed.

Rather than complete the purchase, Mr Y disappeared and it transpired that he had given a false address. The couple selling their property sued him, but he did not appear in court. 

They also argued that the estate agency should take some liability, as it did not verify Mr Y’s financial situation or profession. 

A Lille court ruled in their favour in principle, but did not grant them the €85,000 compensation they were seeking. 

No explanation was given as to why Mr Y committed to the purchase prior to his disappearance.

What checks must estate agents do?

“Legally an agent needs to check the IDs of a buyer and their financial status, ie. that they have funds in accounts in their name,” said Carol Ann Wheeler, an estate agent at Wheeler Property in Lot-et-Garonne. 

“If we were suspicious, we would go further with investigations.”

She said she had been fortunate not to come across many unscrupulous buyers, but once refused to deal with a prospective client when she realised their LinkedIn profile was fake. 

“After asking further questions, the buyer became very aggressive so it was easy to spot them! They went to a competitor to ask them to let the vendor know we refused to deal with them. Then they arranged a visit with the competitor.

“We shared what we had found out with the other agency and explained why we refused to work with the ‘buyer’. Unfortunately, they didn’t believe us and sat waiting for the mystery buyer, who didn’t exist and was never heard of again.”

These are far from the only fraudsters using false identities to scam sellers or buyers.

In 2024 we reported on a couple in northern France who were conned out of their savings for a home deposit after scammers stole a bank adviser’s identity and offered them an attractive deal. They handed over the entire €26,000 of their savings.