The Hoguet Law

LAW No. 70-9 (JANUARY 2, 1970)

The regulation of the conditions of the practice of activities pertaining to certain transactions concerning buildings and businesses.

Title I : The practice of activities concerning the mediation and management of buildings and businesses.

• Article 1

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 3 I (JORF, July 2, 2004).
  
  The provisions of the present law apply to all persons, physical or moral, who lend themselves to or give their aid on a regular basis, even as an accessory, to any transaction affecting the goods of others and relative to :
  1. The purchase, sale, exchange, leasing or sub-leasing, seasonal or otherwise, furnished or unfurnished, of existing buildings or those under construction ;
  2. The purchase, sale, or rental of a business ;
  3. The transfer of a livestock or farm equipment lease ;
  4. The subscription, purchase, [or] sale of stock or capital shares of property companies that give rise to the allocation of the premises, either by possession or by ownership ;
  5. The purchase or sale of non-negotiable capital shares when such assets include a building or business ;
  6. Building management.
  7. With the exception of press publications, the sale of lists or files relative to the purchase, sale, leasing or sub-leasing, furnished or unfurnished, of existing buildings or those under construction.
  8. The conclusion of all contracts regarding the shared possession of a building governed by articles L. 121-60 and following the Consumer Code.

  • Article 1-1

    Created by Ordinance no. 2004-634 (July 1, 2004), article 3 II (JORF, July 2, 2004). For the purpose of application of the present law, a seasonal rental is considered to be the concluded lease of a building for a maximum and non-renewable duration of ninety consecutive days. When these transactions are performed by an intermediary, rental conditions are determined by a decree of the Council of State.

• Article 2

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 4 (JORF, July 2, 2004).
  
  To members of professions, of which the list shall be determined by decree, in consideration of the practice of their professional activities as well as any financial guarantees they offer for the practice of this activity ;
  To all persons, or their spouses, who, in a non professional capacity, lend themselves or their aid to transactions concerning goods over which they have legal rights, divisible or indivisible ;
  To all persons acting on behalf of their spouses, a relative in order of succession, or on the behalf of protected majors or minors [and] under the conditions defined by Titles X and XI of the Civil Code ;
  To the legal or statutory representatives of building societies governed by Articles L. 212-1 and following of the Building Code [and] for the completion of first transfers of capital shares or stocks.
  To holders of a travel agent license, by virtue of Law no. 92-645 (July 13, 1992), regulating the conditions of the practice of activities concerning the organization and sale of trips or vacation packages [and] for the conclusion of all contracts regarding the shared possession of a building governed by Articles L. 121-60 and following of the Consumer Code.

• Article 3

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 5 (JORF, July 2, 2004).
  
  The activities listed in Article 1 may not be practiced except by physical or moral persons holding a professional license that has been approved by the prefect and which lists the transactions that they may perform. This license may not be issued to anyone except to physical persons who meet the following conditions :
  1. Provide proof of their professional credentials ;
  2. Provide proof of a financial guarantee permitting the reimbursements of funds, goods and chattel, or securities, and which specifically enumerate the latter ;
  3. Provide proof of insurance against the financial consequences of their civil and professional responsibility ;
  4. Are not disqualified through one of the conditions of validation or violations of practice defined hereafter in Title II.
  The financial guarantee mentioned in the heretofore Item 2 results from a written contract supplied by an insurance company that specializes in this area, by a credit-granting agency, or by one of the institutions listed in Article L. 518-1 of the Fiduciary Code. The methods of fixing the amount of said guarantee shall be determined by a decree of the Council of State. A license will be issued to moral persons only if the aforesaid persons meet the requirements described in Items 2 and 3 above, and if their legal and statutory representatives meet the requirements described in Items 1 and 4 above. The manager of each business, branch, agency, or office must produce a business plan prior to receiving a license. In addition, this person must meet the requirements set forth in Items 1 and 4 above.

• Article 4

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2 (JORF, July 2, 2004).
  
  All persons authorized by a professional license to negotiate, mediate or act on behalf of the latter, will be upheld by their qualifications and to the extent of their powers within the conditions fixed by a decree of the Council of State. The foregoing acts are subject to the provisions of Title II of the present law.

• Article 5

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2 (JORF, July 2, 2004).
  
  The persons named in Article 1 who receive or possess sums of money, goods, stocks or bonds, or those persons who distribute them during the course of the transactions specified in the aforesaid article in whatever capacity and in whatever way, must respect the conditions set forth by the decree of the Council of State, notably the formalities of recordkeeping and the delivery of receipts, as well as other obligations issuing from this mandate.
  
  

• Article 6

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 6 (JORF, July 2, 2004).
  
  
  1. The contracts concluded with the persons heretofore named in Article 1 and concerning the transactions that are listed in Items 1 through 6 must be drawn up in writing and must conform to the provisions of the decree of the Council of State. The following transactions are subject to the provisions of Article 1325 of the Civil Code: the conditions under which such persons are authorized to receive, deposit or return sums of money, goods, [or] stocks and bonds at the time of the transaction; the means of re-issuing the account; the conditions of remuneration, as well as information regarding the party who will have charge of these matters. No goods, bonds, stocks, or sums of money, either from sales commissions, research fees, administrative fees, marketing fees or mediation fees of any kind are due to the persons named in Article 1, nor may they be required or accepted by them, unless one of the transactions named in the aforesaid article has been effectively contracted and documented in a single, written act clarifying the agreement of the parties. However, when a mandate is accompanied by an exclusivity clause or a penal clause, or when it includes a clause by which terms a commission will be payable by the principal party, such a clause will be applicable within the conditions which shall be fixed by decree, even when the transaction is concluded without the aid of an intermediary.
  2. Between those persons who lend themselves to the activity defined in Article 1, Item 7, and their client[s], a written contract must be established. In accordance with Article 1325 of the Civil Code, the original of the contract shall be returned to the client and shall define the characteristics of the researched good, the nature of the services promised to the client and the amount of remuneration incumbent on the latter. No sum of money or remuneration of any sort is due to a person who lends themselves to the activity defined in Article 1, Item 7, nor may it be required by them prior to the satisfactory fulfillment of their obligation to provide complete lists or files, regardless of whether such a contract’s execution be immediate or successive.

• Article 7

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2 (JORF, July 2, 2004).
  
  All contracts and promises concerning the transactions named in Article 1 shall be rendered null and void when they are not completed within the specified duration of the contract.

• Article 8

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 7 (JORF, July 2, 2004).
  
  All persons holding an administrative permit conforming to the aforementioned law of July 13, 1992, and who practice the activity of seasonal rental of furnished buildings, with the exception of tourist contracts, are hereby granted a professional license in accordance with Article 3 of the present law, provided that this activity is subordinate to their principal activity. For the practice of this activity, such persons must apply for a financial guarantee permitting the reimbursement of funds and stocks and bonds, and they must hold a valid insurance policy guaranteeing the financial consequences of their civil and professional responsibility that are at risk by virtue of this activity. The practice of these activities is governed by the provisions of the present law and all precedents regarding its application.

Title II : Disqualifications from the practice of activities concerning the mediation and management of buildings and businesses.

• Article 9

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 8 (JORF, July 2, 2004).
  
  No one who lends themselves to or gives their aid on a regular basis, even as an accessory, to transactions concerning the goods of others named in Article 1, can practice those functions if they have been convicted within the last ten years :
  1. Of a crime.
  2. Of a sentence of less than three months imprisonment without parole for :
     1. One of the offenses listed in Book III, Title I of the Penal Code and for the offenses described in special laws and punishable by recommended sentences for swindling or confidence tricks ;
     2. Harboring and receiving, or one of the offenses classed with or closely related to harboring and receiving that are listed in Book III, Title II, Chapter 1, Section 2 of the Penal Code ;
     3. Money laundering ;
     4. Active or passive corruption, influence peddling, theft, [or] embezzlement ;
     5. Counterfeiting or falsification of share certificates or other financial securities issued by the government, including falsification of official seals ;
     6. Participation in criminal conspiracies ;
     7. Narcotics trafficking ;
     8. Procuring or one of the offenses listed in Book II, Title II, Chapter 5, Sections 2 and 2A of the Penal Code ;
     9. One of the offenses listed in Book II, Title II, Chapter 5, Section 3 of the Penal Code ;
     10. One of the offenses concerning the governance of commercial businesses listed in Book II, Title IV of the Commercial Code ;
     11. Bankruptcy ;
     12. Usury ;
     13. One of the offenses covered under the Law of May 21, 1836, concerning the prohibition of lotteries, and by the Law of June 15, 1907, regulating gaming in the clubs and casinos of seaside resorts, spas, and health resorts, and by the Law No. 83-628 (July 12, 1983) regulating games of chance ;
     14. Offenses concerning the legislation or implementation of financial transactions abroad ;
     15. Fiscal Fraud ;
     16. One of the offenses listed in Articles L. 111-34, L. 241-1, L. 241-2, L. 261-17, and L. 311-16 of the Building Code ;
     17. One of the offenses listed in Articles L. 115-16 and L. 115-18, L. 115-24, L. 115-30, L. 121-6, L. 121-28, L. 122-8 to L. 122-10, L. 213-1 to L. 213-5, L. 217-1 to L. 217-3, L. 217-6, and L. 217-10 of the Consumer Code ;
     18. Offenses defined by Article L. 353-2 of the Fiduciaries Code ;
     19. One of the offenses listed in Articles L. 324-9, L. 324-10, and L. 362-3 of the Labor Code ;
     20. Attacks on Automated Information Systems as defined in Book III, Title II, Chapter III of the Penal Code.
  3. Of the discharge of one’s duties as a public official or minister.

• Article 10

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 6 (JORF, July 2, 2004).
  
  The conditions of disqualification listed in Article 9 also apply to :
  1. Any person who has received a pronouncement of personal bankruptcy on his or her behalf, or any other measure prohibited under the conditions enumerated in Book VI of the Commercial Code ;
  2. Judicial administrators or representatives of receivership and liquidation who have been the object of a decision resulting in disbarment as defined by Articles L. 811-12 and L. 812-9 of the Commercial Code ;
  3. Current and former members of liberal professions governed by legislative or regulatory statutes whose license is protected and who have been the object of a decision resulting in the suspension of their license for a duration of at least six months.

• Article 11

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 8 (JORF, July 2, 2004). In cases of conviction by a foreign court, if the verdict has been rendered for an offense that, under French law, constitutes a crime or one of the misdemeanors listed in Article 9, the Criminal Court of the condemned’s jurisdiction may declare, upon the request of the Public Prosecutor and after having both confirmed the regularity and the legality of the judgment and called the interested party before the council chamber, that said party is no longer capable of practicing his or her professional activities. This disqualification applies equally to all non-rehabilitated persons who have been banned from the practice of professional activities by a foreign court when such a judgment is also enforceable in France. To that end only, the Public Prosecutor may initiate a request for an exequatur before the Supreme Court of the condemned’s jurisdiction.

• Article 12

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2 (JORF, July 2, 2004).
  
  No person whose practice of a professional activity is excluded by the present law may practice those activities under the guise of a third party, nor may they be employed in any capacity, neither by the establishment for which they worked, nor by the establishment that they directed, managed, administrated or which has their signature on file, nor may they manage, direct, or administer any moral person exercising this activity. They may no longer be employed as buyer, manager, or renter of their former business.

• Article 13

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 9 (JORF, July 2, 2004).
  
  All persons exercising a profession or activity named in Articles 1 to 4 who incur a disqualification must cease their profession or activity within a period of one month from the day that the judgment of incapacity takes effect and notice has been given to them. This period may be reduced or suspended by the court that issues the judgment. The jurisdiction pronouncing the judgment of incapacity may reduce the duration of this period without prejudice to the provisions of Article 132-21, line 2 of the Penal Code.

Title III : Penal Sanctions.

• Article 14

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 10 (JORF, July 2, 2004).
  1. The following acts are punishable by six months imprisonment and a fine of 7,500 Euros :
  2. To lend oneself to or give one’s aid on a regular basis, even as an accessory, to the transactions listed in Article 1 without holding a valid license issued in accordance with Article 3, or after such a license has been restored, or if the aforesaid license has not been restored after a declaration of competence from the appropriate administrative body ;
  3. For all persons who are responsible for the management of an establishment, branch, agency, or office, and have not submitted a business plan that includes the professional activities listed in Article 3, line 10 ;
  4. For all persons who act as the legal or statutory representative of a moral person who lends themselves to or give their aid on a regular basis, even as an accessory, to the transactions listed in Article 1, without fulfilling or having ceased to fulfill the requirements defined by Article 3, Items 1 through 4.
  The acts of negotiating, mediating, or undertaking commitments on behalf of a person holding a professional license is punishable by the same measures, unless these actions are authorized by the provisions of Article 4 heretofore.

• Article 15

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 10 (JORF, July 2, 2004).
  
  The act of practicing or attempting to practice a professional activity in violation of disqualification resulting from the application of Articles 9 through 12 is punishable by the measures prescribed in Article 313-1 of the Penal Code.

• Article 16

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 10 (JORF, July 2, 2004).
  
  The following acts are punishable by two years imprisonment and a fine of 30,000 Euros :
  1. To receive or possess at the time of the transactions listed in Article 1, in whatever capacity or manner, sums of money, goods, or stocks and bonds that are :
  1. In violation of Article 3 ;
  2. In violation of the conditions described in Article 5 regarding the maintenance of records and the delivery of receipts when such documents and receipts are legally required ;
  2. To require or accept sums of money, goods, or any type of securities in violation of the provisions of Article 6.

• Article 17

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 10 (JORF, July 2, 2004).
  
  The act of hindering a public servant in charge of an audit during the course of his or her duties by refusing to surrender requested documents, particularly banking and accounting documents, as well as written contracts, is punishable by six months imprisonment and a fine of 7,500 Euros.

• Article 18

  Modified by Ordinance no. 2004-634 (July 1, 2004), article 2, article 10 (JORF, July 2, 2004)
  
  Moral persons may be held legally responsible for the offenses listed in articles 14, 15, 16, and 17 under the conditions defined by Article 121-2 of the Penal Code.
  Moral persons incur the risk of the following punishments :
  1. A fine according to the conditions defined by Article 131-38 of the Penal Code ;
  2. The penalties prescribed in Article 131-39 of the same Code.
  The ban named in Item 2 of this last Article covers activities which give rise to offenses, when the latter has been committed during the practice of an activity or at the time of its practice.

Title IV : Miscellaneous provisions.

• Article 19

  Amended by Ordinance no. 2004-634 (July 1, 2004), article 11 I (JORF, July 2, 2004).

• Article 19

Modifieby Ordinance no. 2004-634 (July 1, 2004), article 11 II (JORF, July 2, 2004).

The conditions of application of the present law shall be determined by a decree of the Council of State.
Formerly : Law 70-9 1970-01-02, Article 20