UNDERSTANDING MANDATES



A mandate is not an every-day concept to many people. In fact, one of the subjects that seems to baffle most uninformed sellers, is the mandate they have with their real estate agent. And yet is it something we actually work with every day in other aspects of our lives.

Green property line
WHAT IS A MANDATE?
“Mandate” simply means “an agreed upon capacity to do” something, or “an authorisation to act given to a representative“.
A mandate, where a real estate agent is concerned, is essentially a marketing agreement between the seller or buyer and the agent. Many other professionals also act on a mandate, whether oral or written. Think about it:
 
When your plumber, builder, surgeon, banker, lawyer or attorney does something you asked them to do, he or she is acting on your mandate.
 
Your representative is only authorised to act in accordance to the mandate he or she received. That is why you don’t wake up with a new roof when you give your builder a mandate to build a braai! It is important however to have the mandate in writing to ensure everyone knows what their roles and responsibilities are.

Green property line
HOW IS A MANDATE GIVEN?                                                                                                                  Property Network Navigate Top
A mandate can be given by either an oral or written statement to the effect that you give the agent or agency an instruction to find a buyer for your property.
 
Example:
You tell your estate agent that you have been thinking of selling.
She says, “Would you mind if I bring someone who might be interested?” and you say that that will be fine.
You have just given the agent an oral open mandate to sell your house!
 
An open mandate can and should also be given in writing. A letter to your estate agent informing them that your house is for sale, and inviting them to introduce potential buyers, is an example of a written open mandate. Some real estate agencies have written open mandate forms which they will fill in and ask you to sign. A written open mandate gives the agent a clear instruction and eliminates any misunderstandings.
 
Some mandates must be written mandates to be valid. Sole and exclusive mandates must be in writing to be binding. These written mandates must contain a description of the property, a description of the mandate period, state that it is a sole and/or exclusive mandate, and must be signed by the owner or owners.
 
Even with an open mandate, it is preferable to have the details in writing so that there are no misunderstandings later. Similarly, your builder will specify in his quote that the braai is to be facebrick and not plastered. Putting a mandate in writing, gets you assurance that you both have understanding on what is expected and what not.

Green property line
VALIDITY OF A MANDATE                                                                                                                       Property Network Navigate Top
 
An open mandate stays in effect until it is withdrawn, or until another mandate comes into effect that conflicts with the first mandate.
 
If you, for example, give one agency a sole mandate, the open mandates given to other agencies are no longer valid.
 
A sole and/or exclusive mandate can be withdrawn at any stage, unless it states clearly that it is irrevocable. A sole and/or exclusive mandate also only stays valid for the duration of the mandate period. When the mandate period lapses, so does the sole and/or exclusive mandate. Important to remember – never sign an open ended mandate unless you are sure that is what you are wanting. Most professional agencies will only require you to sign a mandate for three months.
 
For any mandate to be valid, whether an open, sole, or exclusive mandate, there is a requirement that the mandate grantor must have intended to give that mandate. In other words: If you were duped into signing an Mls, sole, or exclusive mandate while intending to give an open mandate, that mandate is not worth the paper it is written on!
 
This should not be seen as an easy way out of a sole mandate though. It can turn into an ugly court dispute that can become very costly. Rather read through and understand every document before you put your signature to it.

Under the Consumer Protection Act, you may give 20 working days notice to cancel an agreement and the same applies to mandates given to an agent. Most agencies will hold you to this 20 day requirement, but we at Property Network allow any seller to cancel giving 7 days notice. Make sure you check the cancellation terms before sigining.

Green property line
TYPES OF MANDATES                                                                                                                          Property Network Navigate Top
 
SELLERS
A Seller has four choices in how they want to market their home and are completely within their rights to ask their agent to explain the pros and cons of each. Remember, that a mandate, once signed, is a contract between you and the agency and you cannot simply change your mind about its provisions later and revoke it.

Click on each choice to read more.
 
Choice #1 To sell the property themselves as a private seller
This is simple enough with the owner undertaking all advertising, viewing etc. Please make sure though that you are fully aware of legal implications and so on.
 
Choice #2 An Exclusive (Sole) Mandate to sell your property
 
Choice #3 A Multi Listing Service Mandate
 
Choice #4 An Open Mandate
 
BUYER MANDATES                                                                                                                                    
Property Network Navigate Top
Not so common in South Africa but we are catching up fast with the rest of the developed world, whereby a buyer will appoint an agent either with an open or exclusive mandate to actively seek and assess properties on their behalf. See full detail on Buyer Mandates here.

More informed and wise buyers will seek to work with one agent only, whether with a written mandate or not - for more info as to why go here



Back the Legal Advice Centre for all your legal answers
CDPE Qualification - What does it mean

Subscribe to Newsletter property network
property blog port elizabeth south africa
property network on facebook

BE A REAL FRIEND
SHARE THIS WITH SOMEONE



property advice centre
property network feedback page
hazel smith estate agent property network