Understand the distinctions between sole and joint mandates, meet all sale conditions, and clarify agent roles to avoid double commission liability. Protect your interests for a successful property sale.
Understanding Mandates
When selling a house, a Seller enters into a mandate with an estate agent. This can be a sole mandate, where only one agency is involved, or a joint mandate, where multiple agencies are appointed to market and sell the property.
Commission Eligibility
According to Section 26(1) of The Estate Agency Affairs Act 112 of 1976, agents can only earn commission if they possess a Fidelity Fund Certificate. The court case of Wakefields Real Estate (Pty) Ltd/ T Baboolal and B Baboolal clarified that an agent's entitlement to commission hinges on whether they were the effective cause of the sale.
Validating Sales and Conditions
For a sale to be legally binding, all suspensive conditions in the sale agreement must be met. If these conditions are not satisfied, the agreement is void, returning both parties to their original positions, and the Seller is not liable for the estate agent's commission.
Avoiding Double Liability
Double Liability for commission may arise in a joint mandate scenario. If one agent introduces the purchaser but the sale is finalized through another agent, it must be determined if the first agent was still the effective cause of the sale. If both agents contributed to the sale's completion, the Seller could be responsible for paying commission to both agents.
Navigating the complexities of estate agent mandates and commission structures is crucial for Sellers to avoid potential pitfalls, including double liability.
Understanding the distinctions between sole and joint mandates, as well as the importance of fulfilling all sale conditions, can help ensure a smoother transaction.
By clarifying the roles of each agent involved and confirming who qualifies as the effective cause of the sale, Sellers can protect themselves from unexpected financial obligations and ensure a successful property sale.
Let us help you navigate the complexities of estate agent mandates with confidence. Contact us to find out more.
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