What is a mandate?
A Property Practitioner is said to have a mandate when they accept an instruction or authority from a client to render a particular estate agency service. Upon acceptance of the mandate, a legally binding contract is established between the Property Practitioner and their client.
Essentially, a mandate is an exclusive contract between a seller and a Property Practitioner that allows the practitioner to market a specific property and find the right buyer for the house at the highest price in the shortest amount of time. This agreement gives the practitioner the right to handle all legalities involved in the sale of the property.
How is a mandate given?
Generally, a mandate need not be in writing but can be verbal. The following two mandates, however, must be in writing:
- A sole mandate, including a sole and exclusive mandate.
- A mandate that embodies the power of attorney to include certain transactions on behalf of the client.
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 be signed by the owner or owners.
It is nevertheless always sound business practice to record all mandates in writing, as this avoids disputes about the existing terms.
A seller is entitled to appoint as many Property Practitioners as they wish unless they have given a sole mandate to a specific Property Practitioner.
Validity of a mandate
A mandate remains in effect until it is withdrawn or until the expiry of a stipulated period.
A sole and/or exclusive mandate can be withdrawn at any stage unless it states clearly that it is irrevocable.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 remains valid for the duration of the mandate period. When the mandate period lapses, so does the sole and/or exclusive mandate.
For any mandate to be valid—whether an open, sole, or exclusive mandate—it is required that the mandate grantor intended to give that mandate.
Legalities and wording
A mandate must:
– Contain a description of the property.
– State that it is a sole and/or exclusive mandate.
– Be in writing (clause 3.3.1 of the Code of Conduct).
– Have an expiry date as a calendar date (clause 3.3.2).
– Address the legal implications of the sale of property during the currency of the mandate (and sometimes thereafter) by the seller or a third party to the exclusion of the practitioner (clause 3.10.1). The font cannot be smaller than the balance of terms.
– Outline the marketing obligations assumed by the practitioner in the performance of the mandate (clause 3.10.2). The font cannot be smaller than the balance of terms. The suggested wording is:
“The seller must confirm that they are the sole owner of the property, and if they sign in a representative capacity, they warrant that they are duly authorised to do so.”
– Include a clause dealing with the effects of removing the property from the market during the mandate period.
– It is recommended to incorporate a listing of defects in the property to be filled in and signed by the seller.