page / Why do you need to use an estate agent?
/ Hidden costs in buying property / Conveyancer,
transfer process and documents required
An estate agent is said to have a mandate when he accepts an instruction or authority from a client to render a particular estate agency service for a client. On acceptance of the mandate, a legally binding contract is established between the estate agent and his client.
Generally a mandate need not be in writing but can be verbally. The following two mandates must, however be in writing:
1. A sole mandate including a sole and exclusive mandate.
2. A mandate, which embodies a power of attorney to include certain transactions on behalf of the client.
It is never the less always sound business practice to record all mandates in writing as this avoids disputes regarding existing terms.
A person is entitled to appoint as many estate agents as he wish, unless he has given a sole mandate to a specific estate agent. The code of conduct defines a sole mandate as a “incorporating an undertaking on the part of the person giving the mandate not to confer a similar mandate on another estate agent before the expiry of a determined period”.
A sole mandate to sell or let a property is therefore a contract between an estate agent and a client where the client agrees:
1. Not to appoint another estate agent to sell his property until the contract has terminated.
2. And to appoint that specific estate agent to sell or let his property only.
Should the client sell his property through another estate agent during the sole mandate period, he the client commits breach of contract. The estate agent can then claim damages from the client, depending on the circumstances, which may or may not be equal to the commission which the estate agent would have earned had the property been sold or let by him.