No-cure-no-pay rule
The fundamental principle of mortgage brokerage established by Article L.519-6 of the Monetary and Financial Code: the broker may not collect any client remuneration before the loan is actually obtained and funds are disbursed by the notary. Any advance payment of study fees, retainers, or fees before this stage is illegal and criminally sanctioned. This principle protects the borrower and distinguishes the broker from other intermediaries.
Key points
- Based on Article L.519-6 of the Monetary and Financial Code.
- No study fee, retainer, or advance payment may be charged before notarial disbursement.
- Violation of this rule is a criminal offence.
- This principle distinguishes the broker from other intermediaries who may invoice per task.
Frequently asked questions
At what precise moment may the broker legally invoice their fees?
The right to remuneration arises only after the authentic deed of sale is signed at the notary and the loan funds are actually disbursed. The borrower's signature of the loan offer alone is insufficient; it is the disbursement of funds that triggers the right to invoice.
Why do some intermediaries charge fees before the loan, when this is prohibited for IOBSP brokers?
The no-cure-no-pay rule applies specifically to persons registered in the IOBSP category under the Monetary and Financial Code. Some intermediaries present themselves as financing advisers or commercial agents and operate outside the IOBSP perimeter, sometimes illegally. A duly ORIAS-registered broker can under no circumstances circumvent this obligation.
What happens if the loan is obtained but the sale ultimately does not go through?
If the loan offer is accepted but the sale is cancelled before the authentic deed is signed, funds are not disbursed and the broker may not collect their fees. This is one of the inherent risks of the no-cure-no-pay model: work performed remains unpaid if the transaction fails for reasons outside the financing.
In practice
A broker successfully negotiates a favourable rate and the loan offer is signed by the borrower; however, their €2,000 fee becomes billable only on the date the authentic deed is signed at the notary and funds are concurrently disbursed.
Official sources
- Article L519-6 CMF (no funds before disbursement) · Légifrance
- Article L519-1 of the Monetary and Financial Code · Légifrance
- Prudential supervision and resolution authority · ACPR (Banque de France)