A Property24 reader says his elderly mother signed a sole mandate, without understanding “what she was signing”.
“What can I do if the agent doesn’t want to give me a copy of the sole mandate?”
According to the reader, “The agent did not explain to her what she was signing. He didn’t even go through the sole mandate contract with her and now he doesn’t want to give me a copy of the contract. What do we do in this instance?”
Property Expert Jaco Rademeyer, from Jaco Rademeyer Estates, responds says, “A sole exclusive mandate is an agreement where the seller gives just one agency the sole right to market the property, for a limited time only.
“If another estate agent sells the property during this period, and the mandate states that the estate agent has ‘sole and exclusive selling rights’ or ‘sole right to sell’ or ‘sole authority to sell’, the estate agent with the sole mandate can claim damages from the seller, which could be equal to the commission that he could have earned if he sold the property.
“The seller therefore renounces the right to sell the property himself during this exclusive mandate period. The seller needs to do his homework to ensure he appoints a reliable and competent agent, that will do everything legally possible to sell the house.
“The benefits of having a sole mandate is that there will only be one agent responsible for the property, which means a more focused marketing effort, only one payable commission, one person has access to the house, there is only one contact person which makes communication more seamless, there is no pressure to accept a lower offer as the agent has an incentive to negotiate to receive the best possible price for the home and finally one agent controls all the buyers which creates competition among the buyers resulting in getting the best possible offer.
The Consumer Protection Act
Rademeyer explains that the Consumer Protection Act (CPA) regulates the relationship between the agent and seller and for this reason, the mandate must adhere to the requirements set out in the Act.
“Most notably and in relation to the question at hand, the mandate must be in clear and understandable language (Section 22), the agent must explain the meaning and consequences of the material provisions of the mandate and provide the seller with a copy thereof (Section 50 (2)(b)).
What can the seller do if the agent fails to comply with the Consumer Protection Act?
The seller may lodge a complaint with the agent, preferably in writing. If the complaint is lodged by telephone, ask for an e-mail address in order to confirm the conversation about the complaint in writing.
If the complaint is not resolved by the agent within a reasonable time period, the seller may lodge a complaint with the National Consumer Commission and the agent or agency could be fined up to 10% of their annual turnover for the previous financial year.
The Estate Agency Affairs Board
Rademeyer further explains that the Estate Agency Affairs Board (EAAB) states that an estate agent who has obtained a written mandate from a client must, without undue delay, furnish the client with a copy of the mandate (clause 6.2.3 of their code of conduct).
“Unfortunately, it does not invalidate the mandate if the agent did not comply with the code of conduct, but the Estate Agency Affairs Board could enforce a penalty/sanction.
What must a seller do if he feels that his agent has acted unprofessionally?
“Complaints may be lodged with the EAAB, where an investigation and hearing may be conducted. If found guilty, the estate agent may be fined, reprimanded, or his fidelity fund certificate may be withdrawn. The contact details of the Estate Agency Affairs Board are:
Telephone number: 087 285 3222. Website address: www.eaab.org.za
“In conclusion, the agent must without undue delay, provide a copy of the signed mandate to the seller and the meaning and consequences of the material provisions of the mandate must be explained before signing thereof. Failing which, the seller may report the agent to the National Consumer Commission and/or the EAAB where he will be fined accordingly,” says Rademeyer.
Article courtesy of Lexis Digest and property24