A Mandate is instruction or authority from a client to an estate agent, to render a particular estate agency service.
It is a legally binding contract between the estate agent and his client, that need not be in writing unless in the case of a sole and exclusive mandate, or a power of attorney to conclude certain transactions on behalf of the client. It is always a good idea to record all mandates in writing anyway.
There are different kinds of mandates.
1. Open Mandate
Many different estate agents can have a mandate to market your property, meaning that one estate agent cannot claim to have the sole right to market it.
2. Sole Mandate
If you give an estate agent a sole mandate to market your property, it means that the seller cannot give a similar mandate to another agent before a certain deadline. If another agent sells or lets your property during this period, the agent with the sole mandate can claim damages from you, which may be equal to the commission they could’ve earned on the sale of the property.
However, the seller can sell or rent the property during this period without any consequences if he or she makes sure that the wording in the assignment doesn’t state that the real estate agent has the “sole and exclusive right to sell” or the “sole right to sell” or the “sole authority to sell”.
3. Sole and Exclusive Mandate to sell your property?
No one (including the Owner of the Property) other than the real estate agent who holds the sole and exclusive mandate may market your property before the expiry of the specified mandate period. This means that if someone other than the appointed real estate agent sells your property, you’ll still have to pay a commission to that agent.
The real estate agent who was given the sole or sole and exclusive mandate is still entitled to his commission if he’s arranged a buyer for your property during the mandate period, depending on the wording of the mandate document, and this buyer only buys your property after the mandate has expired, perhaps through you as the owner or through another real estate agent. It’s important that you read and understand the terms of the mandate document.
