WHAT'S A SOLE MANDATE & HOW DOES IT WORK?
Before we dive into this topic, it’s important to understand that an estate agent may not sell your – or any property – unless they have a mandate from you, the owner. A mandate gives the property practitioner the legal authority to advertise and present the property to prospective buyers.
We have, in other articles, discussed the difference between an open and sole mandate, and the advantages of the latter. In this article, we’ll focus on what’s involved in a sole mandate. For context, though, let’s summarise and refresh our memories:
- A sole mandate gives a single agent or agency the exclusive rights to sell your property. An open mandate, on the other hand, does not stop the owner from mandating multiple agents to market the property to prospective buyers.
- Understanding that an open mandate is not more beneficial than a sole mandate is counterintuitive. This is one of those instances where competition does not necessarily get results. A sole mandate, which is time-bound, puts pressure on the agent to sell the property before they must compete with colleagues and/or competitors. This way, both the agent and the seller get the best return on their investments of time and money.
A sole mandate is a contract
A sole mandate is a legal agreement between the property owner who wishes to sell or rent their property and the estate agent or agency they contract, to market and sell it on their behalf. The legal contract must typically include the following:
- It must be in writing
- It must be signed by the seller. It can also be signed electronically (in terms of the Electronic Transactions and Communications Act, 2002)
- It must include an expiry date
- It must provide for an option to extend the period during which the agent has exclusive rights to market the property. However, in terms of the Consumer Protection Act, the mandate may not be for longer than 24 months in total. If the mandate is extended, this must also be in writing
- It must allow the agent the option to continue marketing the property (i.e. render the same service) when the sole mandate expires
- It must state the commission or fees the estate agent will get if they sell the property.
- Once signed by both parties, the seller must receive a copy of the contract
Cancelling a sole mandate: possible consequences
If the need arises, you can get out of a sole mandate. The cancellation of the agreement before the due date is governed by the Consumer Protection Act (Act 68 of 2008) which allows for two possible ‘outs’:
- All direct marketing agreements are subject to the 5-day cooling-off period. So, if you’ve signed a sole mandate on the 10th of December, and on the 14th you wish to cancel, you are within your rights to do so, and with immediate effect.
- Outside the cooling off period, if you decide that the sole mandate isn’t working for you, you must give 20 working days written notice to cancel it.
If you wish to terminate a sole mandate with immediate effect, you can only do so if the property practitioner is in breach of any of the terms in your contract, and/or if they are not abiding by the Property Practitioners’ Code of Conduct. You will then have to provide evidence that the estate agent hasn’t done their job. For example, they have not marketed the property as they had promised to do so in the agreement. In this case, and if the seller is sufficiently unhappy about a property practitioner’s conduct, they can lodge a complaint with the Property Practitioners Regulatory Authority (PPRA).
Penalty clauses work both ways
Because a sole mandate is a legal agreement, if either of the parties is in breach, there can be serious consequences. While a seller can report an estate agent to the PPRA, the agent can also enforce the terms of the sole mandate if the seller does not honour their side of the agreement.
For example, if the mandate is not cancelled by mutual agreement and in writing, and the property owner either sells the property privately or through a competitor agent, the original property practitioner would be within their rights to claim commission from the seller. This means that if you don’t cross your Ts and dot all your Is, you could end up paying double the commission.
A last word
When using a reputable agent, signing a sole mandate is the most effective way to sell your home. Working through only one agent streamlines the process for you and keeps the agent motivated and focused on selling your home. Reach out to your nearest RE/MAX office to find a professional property practitioner who can make your selling experience as seamless as possible.
People also ask
What laws govern a sole mandate?
The Property Practitioners’ Code of Conduct spells out the requirements of all mandates dealing with the sale of fixed property in South Africa. These requirements are also included in Regulation No. 45735 the Property Practitioners Act 22 of 2019 which came into effect in February 2022. Sole mandates fall under clause 34.3 of these regulations and clause 3 of the code of conduct.
How do you get a mandate?
You get a mandate by approaching a registered property practitioner to sell your home on your behalf, and then signing an agreement (sole mandate) with them that gives them the authority to do so.
What is the buyer’s mandate?
When a prospective buyer contracts a property practitioner to act on their behalf to find and offer to buy properties in which they might have an interest. In South Africa, however, we rarely use buyers’ mandates.