- 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 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 have 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 is not 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 has not 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 honor 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 do not cross your T’s and dot all your I’s, 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.
