Where an estate agent concludes a sale agreement between a seller and purchaser, the agent is due the commission as agreed in the mandate by the seller, or otherwise as agreed in the acceptance of the offer from the purchaser.
It is in the interest of all parties to a sale agreement that the commission is clearly stipulated in the sale agreement, and also who will be liable for payment of such commission. However, verbal agreements do not nullify a claim for commission, it is always better to reduce the payment of brokerage to writing. In the event of verbal agreements, the onus will be solely on the estate agent to proof the following:
- That he/she had a formal mandate to sell the property, or introduce the buyer/s;
- That he/she has performed in terms of such a mandate;
- That he/she was the effective cause of the transaction;
- That the percentage commission is clearly defined, as agreed.
Proving a verbal agreement can not only prove a risk for both the agent and seller, but can also be a costly exercise, especially if action is undertaken in the High Court of South Africa.
The solution and preventative action is therefore always to ensure that a written, clear and comprehensive mandate agreement is signed between the Seller and the Estate Agent.
Wietz Viljoen, WVA INC.
This article is for general information purposes and is aimed at advising the public. It should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.