Estate Agents – How secure is your Mandate?

Estate agents can, and should, only sell and market properties where they have secured a mandate, and which mandate should be confirmed in writing. Without a mandate in place, an agent has no claim for commission – even if the agent was the effective cause of the sale.

The five golden rules of making sure a mandate to sell is valid and enforceable:

1. An agent should have a mandate from the actual owner of the property – if the property is registered in the name of the wife and the agent has a signed mandate from the husband such agent has no authority to sell the property and no entitlement to commission.

2. If an agent secures a mandate from anyone other than the owner, for example, someone who has purchased a property but has not as yet taken transfer, an agent would be entitled to commission, provided the person giving the mandate is in a position to pass transfer of the property.

3. If the property forms part of a deceased estate, the agent must obtain a mandate from the executor of the estate, a mandate from the heirs of the estate is not sufficient.

4. An agent should know exactly what they are selling, and cover all eventualities. For example, on a mandate to sell a commercial property, the mandate should also cover the possibility of a sale of shares of the property owning company, as opposed to just the sale of the property in question.

5. Present the owner of the property with a marketing plan and execute the plan – if not, the owner may have cause to cancel such mandate by virtue of non-performance.