Does a mandate have to be in writing?

The College of People Management and Development_Does a mandate need to be in writing

Does a mandate have to be in writing?

In our last blog, we discussed the importance of obtaining mandates in order to acquire property stock to sell or let.  How does one obtain this mandate?  Does it need to be in writing, or can it be provided verbally?

The answer to this question depends upon the type of mandate that is secured by the property practitioner.

An open mandate is a mandate that the client, let us say the seller of a property in this case, may give to any number of property practitioners.  This means that the client could appoint more than one property practitioner to market their property for sale.  Such a mandate is not required to be in writing.  Obviously, the challenge here is for either of the parties to prove the terms and conditions of the mandate in the event of a dispute.  Although an open mandate does not need to be in writing, it makes sense to put this mandate in writing and

record the terms of the mandate, such as the details of the property, the expiry date of the mandate, the mandated price for the property and the rate of commission payable.

A sole mandate, on the other hand, must be in writing.

Regulation 34.3.1 of the Regulations promulgated in terms of the Property Practitioners Act 22 of 2019 indicates that no estate agent shall: accept a sole mandate or the extension of the period of an existing sole mandate, unless – all the terms of such mandate (or extension, as the case may be), are in writing and signed by the client in a manner acceptable in law, including by way of an electronic signature as permitted under the Electronic Transactions and Communications Act, 2002;

Whereas the client can give an open mandate to any number of practitioners, a sole mandate is a mandate that the client can give to one practitioner only and in terms of Regulation, this mandate must be in writing.  You therefore cannot have a verbal sole mandate.  This would not be legal in terms of the Property Practitioners Act 22 of 2019 and its associated Regulations.

Notwithstanding the difficulties that one would have to prove the terms of an open mandate which has not been reduced to writing, such a mandate also exposes the property practitioner and client to a number of risks.  These risks will be discussed in our next blog.

Mandates are more fully discussed in the FETC: Real Estate programme offered by CPMD.

For more information on all of CPMD’s courses, click HERE.

Should you have any further questions, you are more than welcome to contact us.