Defining Real Estate Mandates

Defining Immovable Property Mandates

At its core, a mandate is a fixed term agreement with an end date (legally binding contract, enforceable by law), or authority given by one party (legal owner of an immovable property, his representative with a power of attorney or the executor of his estate, herein referred to as “the seller”) to another (the agent or agent company, “agency”) to act on their behalf for a specific purpose—most commonly selling or buying property, or representing clients in various transactions. 

No mandate to sell may contain an automatic extension after the end date of the contract. The mandate has to have the agreed end date clearly indicated on the mandate. A rental mandate may not have any clause stipulating that the rental agent or agency has a sole or exclusive mandate to sell the property should the seller decide to sell the immovable property.

Because the mandate is a fixed term contract, it is subject to the Consumer Protection Act (CPA) (Act 68 of 2008) , its rules and regulations, which means that a sole, a joint or exclusive mandate may be cancelled within the term of the contract, giving the agent or agency 21 working days’ notice of the cancellation of the mandate. However, the seller will be liable for any costs pertaining to administration and advertising, as well as commission payable to the agent or agency should they sell the property within the 21-working days’ period, or prior to cancellation. A seller would typically terminate the contract should he not be satisfied with the service of the agent or agency or should his financial position / personal position change during the term of the mandate.    

The key terms included in the mandates describe the level of exclusivity, rights, and obligations attached to the authority of the agent or agency.

What Is a Sole Mandate?

A sole mandate is an agreement in which the seller appoints a single agent or agency to market and sell immovable property. During the term of the mandate, only that appointed agent or agency has the right to market the property and earn commission if a sale is made.

Characteristics of a Sole Mandate:

• Only one agent or agency is authorized to handle the sale. The agent may at his sole discretion share commission with a non-mandated agent should the latter procure a buyer for the property.
• The seller cannot appoint other agents to market the property.
• The agent has exclusive rights during the agreed period.
• The seller is generally bound to pay the agent’s commission if the property sells within the mandate period, regardless of who finds the buyer, provided the agent was the procuring cause.
• Should the seller be the cause of the sale (a buyer procured by the seller), the seller is not obliged to pay the agent / agency any commission, provided that the seller does not make use of the services of the agent or agency to facilitate the sale
• Should a buyer however contact the seller directly because of the agent’s online advertisement, “for sale” board or the like, the seller is still obliged to pay commission to the mandated agent or agency.
• Should a buyer who was introduced to the property by the mandated agent (during the fixed term of the mandate) make an offer to the seller after the mandated period expires, the seller is still liable to pay commission to the agent. 

Advantages of a Sole Mandate:

• Motivates the agent to put in maximum effort, knowing they are the only one authorized.
• Clear delegation of responsibility, reducing confusion about who is handling the sale.
• Potentially faster or more effective sales, as the agent is fully committed.

Disadvantages:

• The seller cannot seek other offers from other agents simultaneously, which might limit competition. However, if the agent or agency does not perform their duties as agreed to in the mandate (marketing the property as per the agreed mandate, or not adhere to the marketing plan agreed to), the seller may cancel the contract.
• If the sole agent fails to sell within the period, the seller may remain stuck or have to re-advertise.

What Is a Joint Mandate?

• A joint mandate has the same characteristics and rights as a sole mandate, except that two agents are given the right to market and sell the property on the same terms as above.

What Is an Exclusive Mandate?

An exclusive mandate is similar to a sole mandate in that only one agent or agency is appointed to sell or represent the seller. However, the key difference lies in the additional rights and obligations attached. The exclusive mandate to sell can be signed with a single agent or agency or with a group of associated agents, such as the Multi Listing Agency Groups (e.g. MLS – Multi Listing Services, prevalent in Gauteng and Free State).

In essence an exclusive mandate is “a-sole-mandate-on-steroids”. Agents either procure a sole mandate OR an exclusive mandate. A “sole and exclusive mandate” does not exist. 

Characteristics of an Exclusive Mandate:

• The agent or group of agents has / have exclusive rights to market and sell the property.
• The seller may not sell the property himself.
• The seller cannot appoint another agent during the mandate period.
• If the seller sells the property independently or through another agent during this period, they are still liable to pay the agreed commission.
• The agreement often specifies very clear terms, including the agent's rights even if the sale occurs without their direct involvement, as long as it happens during the endorsement period, or as a result of a buyer that was introduced to the property by the agent during the mandated period.
• Should the agent, agency or group of agencies however not perform their duties according to the agreed marketing plan in the mandate, the seller has the right to terminate the contract based on breach of contract or claim specific performance from the agent or group of agencies. It is therefore imperative that a specific marketing plan is agreed to with an exclusive mandate.
• An exclusive mandate to two agents or agencies still remains an exclusive group mandate, stipulating the two agencies that have the exclusive right to sell the property.

Advantages of an Exclusive Mandate:

• It provides greater security for the agent, encouraging them to invest resources.
• Usually, the agent invests more in marketing and promotion because they are assured of commission regardless of how the sale occurs.
• The seller benefits from dedicated marketing efforts.

Disadvantages:

• The seller takes on some risk of paying a commission even if they sell the property themselves or through another means during the mandate period.
• The seller must trust the appointed agent's capability and integrity.

Key Differences Summarized

What are the risks of an open mandate? 

• Agents may not be as committed as when they have a sole, joint or exclusive mandate or give feedback to the seller on a regular basis
• Agents may advertise at different selling prices, trying to undercut each other
• The seller could be liable for double commission should a buyer be introduced to a property by one agent and decides to buy through another agent. Please just take note that introduction to the property is not always the effective cause of sale. The agent who is the effective cause of sale will be awarded the commission should the matter go to court (different scenario’s apply).
• The seller may have to get involved with infighting between agents or agencies.
• Not all agents are equal. If you as the seller decide to go this route, please ensure you appoint duly registered and qualified agents with good moral and ethical values to market your property. 
• You have the right to ask for a copy of a valid Fidelity Fund Certificate for the agent issued by the PPRA (Property Practitioners Regulatory Authority) in South Africa. FFC numbers indicate the status of the agent and the year in which the certificate is issued. FF Certificates are valid for 3 years from January to December.

FFC number combinations are as follows – 

FFC 2025172435 (year issued is 2025, 1 after the year indicates the number belongs to an agency, 72435 will be the PPRA count in line of agency registrations)

FFC2025214273 (year issued is 2025, 2 after the year indicates the person is the principal agent at the agency, and the rest is again the PPRA count)

FFC2025351422 (year issued is 2025, 3 after the year indicates the person is a full status agent at the agency, and the rest is again the PPRA count)

FFC20257001650 (year issued is 2025, 7 after the year indicates the person is a candidate agent at the agency, and the rest is again the PPRA count). No candidate agent may sign mandates or Agreements of Sale without the supervision of a full status or principal agent.

2023-Certificates are still valid until 31 December 2025.

• Ensure that all agents you deal with have a completed copy of the prescribed, mandatory PPRA property information declaration completed and duly signed by ALL property owners (and all buyers upon signing an offer). Ensure you disclose all latent and patent defects you are aware off.
• When signing an offer, please place all agreements and conditions in writing as not every person’s word is his honour. If it is not in writing it is non-existent. Protect yourself. Read through the entire document. Rather ask a trusted or knowledgeable person to go through an offer document or agreement of sale with you if you are unsure of feel uneasy about signing the contract. Once you have signed in acceptance, it becomes a legally binding document. Unfortunately, ignorance is not an excuse in the eyes of the law.  (You have the right to ask the selling agent to explain the conditions of the contract to you.)
• Ask your agent/s on what the cost of selling your property will be before you place your property on the market to sell (not only the commission percentage) – bond cancellations costs, 4 months’ rates and taxed payable to the town council in advance to obtain a clearance certificate, HOA and/or Sectional Title Clearance Certificates, costs to obtain certificates of compliance (gas installation, electric wiring, electric fence, solar installation, plumbing, borer, etc),  updated approved building plans, repairs, etc. If your property’s title deed is missing, there is time and costs involved to replace same before the property can be transferred into the name of the buyer. Disclose any interdicts of life rights / usufructs registered against the title deed of your property, as that will incur additional costs to remove before registration. There could also be the matter of occupational rent should you wish to stay on longer that date of registration of the buyers move in earlier.

Why appoint an agent to sell you property?

When you have a tooth ache, a rotten tooth that needs to be pulled, or need mouth surgery, do you do it yourself or do you see a qualified dentist or periodontist? When your appendix bursts or you have pneumonia, do you visit a medical doctor or go to the emergency room of a hospital? Do you let a broker handle your investment portfolio or stick your money under the mattress or in your Phala-Phala bank?

If you have a personal doctor, a personal dentist, a personal banker, a personal broker, a personal lawyer or advocate, why do you not have a professional, duly qualified, personal real estate agent? I rest my case.

Liane Ellis +27825801338               Ellis Real Estate (Pty) Ltd [2014/072542/02]