Selling your home can be a daunting experience. From ensuring that the correct legal procedures are followed to marketing the property and finding potential buyers, the process can quickly become overwhelming. This is often where the services of an estate agent can be particularly valuable.

Property practitioners, more commonly referred to as estate agents, act on the authority of a mandate given by property owners. One form this mandate may take is a sole mandate. While a sole mandate can simplify the selling process, it is important for property owners to understand that it is a legally binding agreement. It creates obligations for both the owner and the estate agent and is subject to specific legal and regulatory requirements.

What Is a Sole Mandate?
A sole mandate is an agreement concluded between a property owner and an estate agent in terms of which the estate agent is given the exclusive right to market and sell the property for a specified period. This differs from an open mandate, where a property owner may appoint more than one estate agent to market the property. The defining feature of a sole mandate is therefore its exclusivity.

The legal framework governing sole mandates includes the Property Practitioners Act 22 of 2019, the Property Practitioners Regulations and the applicable Code of Conduct. As a point of departure, it is important to know that a sole mandate must be in writing and signed by the owner. An electronic signature may also be used where permitted by the Electronic Communications and Transactions Act 25 of 2002. The agreement must also contain a clearly stated expiry date expressed as a calendar date. It is worth taking note that a sole mandate is limited by the Consumer Protection Act 68 of 2008 (CPA) to a maximum period of 24 months. The property owner must receive a copy of the signed agreement and should pay particular attention to the terms thereof. 

What Does the Sole Mandate Mean for the Owner?
The most important aspect for a property owner to understand is that a sole mandate gives the appointed estate agent exclusive rights during the agreed period. This means that an owner who sells the property privately or through another estate agent while the sole mandate is still in force may be in breach of the agreement. Consequently, the owner may then still be liable for the original estate agent's commission, even though that agent did not ultimately conclude the sale. 

For this reason, a property owner should understand the consequences of the mandate before signing it. The estate agent is required to explain these consequences to the owner in writing. The estate agent must also explain, in writing, the marketing obligations they undertake in attempting to sell the property.

What Obligations Does the Estate Agent Have?
A sole mandate does not simply give an estate agent exclusive rights; it also places obligations on the estate agent. The estate agent must comply with the applicable regulatory requirements and with the terms of the mandate. 

The estate agent is responsible for carrying out the marketing obligations agreed upon with the property owner and making the required disclosures. For example, an estate agent must disclose any competing interest they may have in the property to the owner in writing. An estate agent may also not accept a mandate where its performance requires specialised skills or knowledge outside their competence, unless they are assisted by a suitably qualified person.

Can a Sole Mandate Be Cancelled?
A sole mandate can in some circumstances be cancelled before its expiry. For example, under the CPA, if the sole mandate was a result of direct marketing, it will be subject to a five-day cooling-off period. Furthermore, an owner who wishes to cancel because the mandate is no longer working for them must provide 20 working days' written notice.

Immediate termination may arise where the property practitioner is in breach of the agreement or is not complying with the Property Practitioners' Code of Conduct. In such circumstances, evidence of the estate agent's failure to perform their obligations may be relevant. An example would be where the estate agent has failed to carry out marketing obligations that were expressly agreed upon. Estate agents are also legally required to present every formal written offer to the property owner. 

Where a property owner is concerned about an estate agent's conduct, a complaint may also be lodged with the Property Practitioners Regulatory Authority.

Conclusion
A sole mandate can be beneficial to a seller as it streamlines the process, allowing one agent to focus on marketing the property and managing the sale. However, the seller is committing to that agent for the agreed period and may have limited flexibility if the agent does not perform as expected. 

It is thus important that a sole mandate should not be viewed as a simple instruction to an estate agent to market a property. It is a legal agreement which gives the estate agent exclusive rights for a defined period while placing corresponding obligations on both parties.

Taking the time to understand what is being agreed to at the outset can provide clarity throughout the sale and, importantly, help prevent disputes when it matters most.

While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither the writers of articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes.

References: 
Property Practitioners Act 22 of 2019. 
Property Practitioners’ Regulations. 
Property Practitioners' Code of Conduct. 
Consumer Protection Act 68 of 2008. 
Electronic Communications and Transactions Act 25 of 2002.