Mandates: ask "who" and "how" first

Private Property South Africa
Lea Jacobs

Sellers need to understand that when they sign a mandate with an agent to sell their property, they are agreeing to all the terms and conditions contained in this legally-binding document.

When a seller agrees to allow an agent to market and sell his property, he should clarify beforehand what he is signing.

Firstly, there are different types of mandates and the selling process could prove to be a costly exercise if the seller signs a sole mandate and then proceeds to sell the property through another agent or agency. Sellers in this instance stand the chance of having to pay commission to both the agent who sold the home and the agent who secured the sole rights to sell the property in the first place.

Ask before signing

The Institute of Estate Agents often receives queries from sellers regarding the mandate they have signed with their estate agent. However, Annette Evans, regional general manager of the Institute’s Western Cape branch, notes that questions should preferably be asked before the mandate is signed and not after.

"Mandates, whether sole, dual or multiple agent mandates, are legal contracts between the sellers of the property and the agent involved," she says. "Once the document is signed, it is taken that the parties have read, understood and accepted all the conditions in that agreement and cannot be questioned later."

She notes that changes to a mandate have to be in writing and attached to the original mandate, so that if any dispute arises, there is written proof of what agreements were reached. “According to the Consumer Protection Act, mandates may be cancelled but this is dependent on many factors determined by the Act, which need to be ascertained prior to signature.”

Disputes

When asked what sort of disputes could arise, Annette said that it could be the percentage of commission charged, whether another agent is allowed to market the home, or what the agents will be doing to market the home, to name a few.

Commission often becomes a thorny issue, particularly if the property is sold for less than the asking price or if the property is sold very quickly. Regardless of the circumstances, the time to query the percentage of commission charged is before the mandate is signed and not when it comes time to pay the agent for the work done.

Agents have obligations

That said, agents should provide and stick to a clear, solid marketing plan. Issues such as how often the property will go on show and when and when the property will be advertised are important. A seller has every right to withdraw a mandate if the agent concerned is not keeping his side of the bargain. However, this must be done in writing. In the case of a sole mandate, sellers can't simply change their minds and go with another agent without taking steps to cancel the original sole mandate agreement.

The importance of reading the fine print cannot be over emphasised in these instances. Sellers need to understand exactly what they are signing and if they are unsure, should ask the agent for clarification. As always, choose your agent carefully, make sure that they are not only up to the task of selling your home, but are suitably qualified and have a valid Fidelity Fund certificate that allows them to legally sell property in this country.

Looking for a new tenant?

Advertise your property to rent FOR FREE quickly and easily on our website.

Find out more

Share:

Found this content useful?

Get the best of Private Property's latest news and advice delivered straight to your inbox each week

Related Articles

How does the Consumer Protection Act affect estate agents?
A corporate commercial attorney, Jose Delgado, explains what impact the CPA has on buying and selling for estate agents.
Mandates explained
A Mandate is an instruction or authority from a client to an estate agent, to render a particular estate agency service. Learn more about the different kinds of mandates.
Change is on the cards
The way estate agents advertise a property, what they tell the buyer and how they deal with the seller is all set to change when the Consumer Protection Act (CPA) comes into force.
;