It was an eventful morning at the Simbithi Country Club on Thursday (31 January), with the AMC Hunter INC team presenting another successful Let’s Talk Legal talk to a room of industry players, brokers and agents.
The floor was opened by the newly appointed directors of AMC Hunter INC, Monique Gresse and Sarikha Singh, who welcomed the crowd, giving them an update of the goings-on in the world of conveyancing at AMC Hunter INC.
An insightful presentation by Megan Pillay (Absa Provincial Implementation Specialist) and Avril Richardson (Absa Home Loan Specialist) followed. The Absa representatives’ talk focussed on the buy-to-let market and home loans for residential property investors – informing the audience on a new offering from Absa that grants finance using future rental income, as well as tenant and property management solutions.
With the stage set and interests peaked, Karien Hunter (well known Durban property lawyer and businesswoman) commenced with her enlightening presentation on the latest case law of ‘Effective Cause’, and how agents/brokers could secure their commissions.
Effective Cause Of Sale
According to Section 26(a) of the Estate Agency Affairs Act 112 of 1976, “No person shall perform any act as an estate agent unless a valid fidelity fund certificate has been issued to him or her and to every person employed by him or her as an estate agent and, if such person is a company, to every director of that company.”
Hunter then went on to explain what an effective cause of sale was and how this was pertinent to claim commission on the purchase of a property successfully.
“The effective cause of sale is that an agent must introduce a purchaser to the property, who must be willing to purchase the property and the eventual result must be the sale of that property to the purchaser, ” said Hunter.
She further discussed various scenarios and cases where agents had lost out on commission due to properties eventually being sold through different agencies. However, it was noted that in some instances the commission was actually due to the initial (introductory) agent as they had put the buyer in contact with said property.
To prove that an agent/broker is entitled to that fee, they must first show what activities they performed that introduced the buyer to the property. “Have that paper trail to show what you did. In most cases, the court will uphold this,” Hunter said.
The talk ended with Hunter reiterating that all agents and brokers have to ensure that all of their paperwork is up to scratch and to secure evidence of effective cause.
Afterwards, those who attended were asked to comment; this is what they had to say:
“I thought it was excellent. I thought it was very good, she was fast and furious and to the point.” Gigi – Harcourts Equity Morningside
“It was very interesting because I have been in a few of those situations but the lawyers I dealt with, some of them didn’t have the guts to sort it out. And I had to split commission, and I realise now that I was entitled to the full commission.” Monique – Rawsons
“Very informative and very relevant right now. Our agency has had recent similar issues in the recent past, and it was very important that we all came here today to find out the legal standing on this.” Nicole – Lew Geffen Sotheby’s Realty International
“ I thought it was very informative and thoroughly enjoyed it.” Brian – Engel & Volkers Dolphin Coast
“ Very informative. Tricky situations were presented, and I learned a lot, in terms of who comes first, what happens with the commission, how the commission is based and who gets the mandate. I think that was the most important part, the person who introduces the buyer to the seller or property is entitled to the commission.” Wish – Swindon Property