10 Sep Will I still get my commission?
What happens if a property practitioner takes a mandate from a client and there is no agreement on the amount of the commission payable in the event of a successful transaction?
The answer to this question lies in the matter between Golden Rewards 120 CC t/a Remax Marine v M3 Holdings (Pty) Ltd. The facts of this case are as follows:
1. The defendant company, represented by Mrs Moodliar, gave Remax Marine a verbal mandate to find a tenant for a commercial property, for a property owned by the company, for a five year lease. The property practitioner, who was also an intern at the time, was Mrs Fourie.
2. Mrs Fourie’s principal, Mrs Van der Vlies, drew up a written mandate and sent it to Mrs Moodliar on 26 June 2017.
3. Mrs Moodliar returned the mandate to Mrs Van der Vlies with some handwritten comments. One of the comments was to the effect that commission was to be negotiated.
4. About a month later, being 25 July 2017, Mrs Van der Vlies and Mrs Fourie had a meeting with Mrs Moodliar.
5. In her testimony, Mrs Fourie stated that at this meeting, there was discussion around the mandate, commission for procuring a tenant and commission for managing the property. Mrs Fourie concluded her testimony by stating that agreement had been reached on the mandate, but not on the commission payable.
6. Mrs Van der Vlies testified that she regarded the communication that was sent to Mrs Moodliar on 26 June 2017, together with written mandate, as evidence that there was a mandate between the parties. Mrs Van der Vlies, under cross-examination, accepted that, given the handwritten notes made by Mrs Moodliar, that the mandate did require further consideration.
7. Mrs Van der Vlies did concede that there was a continuous dispute relating to commission, but that because there was a mandate (in her opinion), that the landlord was liable to pay commission to the agent.
8. Due to her experience in the property industry having been an agent since 1993, Mrs Van der Vlies testified that the accepted rate of commission for a commercial lease, and according to SAPOA (South African Property Owners Association), was 5% (plus VAT) on the first two years’ rental; 2.25 (plus VAT) on the next three years’ rental; 1.5 (plus VAT) on the next four years’ rental; 1% (plus VAT) on the balance.
9. Mrs Moodliar’s evidence was that the content of the email dated 25 July 2017 was an offer in which she had proposed that commission would be paid at the rate of R6 000 a month, inclusive of management fees. According to Mrs Moodliar, Remax Marine did not accept this offer, and therefore, no agreement was reached on the commission payable to Remax Marine, pursuant to the agreed mandate.
10. Of course, the part that is missing is why was there even a court case??? The reason for the court case was that on 1 September 2017, Mrs Fourie found out that a written lease agreement, for a renewable five-year term, in respect of the landlord’s property had been concluded on 31 August 2017, between the landlord and Bearing Man (the tenant). Mrs Fourie had introduced Bearing Man to the landlord, but Remax Marine had played no part in the drawing up of the lease. Mrs Fourie entered into an exchange of emails between herself; the tenant and Mrs Moodliar, representing the defendant, demanding access to the lease agreement. With the assistance of Mrs Van der Vlies, she also sent invoices to the defendant for payment of her commission and on the basis of her role in facilitating the lease agreement. No payment was made.
11. Mrs Moodliar told Mrs Fourie that the lease agreement concluded between the landlord and the tenant, had been revised to a period of three years and later, to one year. Mrs Moodliar explained to the Court that the changes to lease were required as there were plans to sell the property and the variation of the lease was in anticipation of change of ownership. Due to the amended terms of the concluded lease, the landlord was of the belief that no commission was payable to Remax Marine and all invoices sent for payment were not honoured.
12. The issues that the Court had to decide were as follows:
(a) whether the lease agreement entered into between the defendant and Bearing Man was as a direct result of the plaintiff having introduced Bearing Man to the defendant;
(b) whether there was an agreement on the amount of commission due to the
plaintiff, either expressly, alternatively;
(c) whether it may be found that a tacit term regarding the usual rate of commission would apply as a direct result of the role of the plaintiff in the introduction of Bearing Man; the subsequent conclusion of the lease agreement and the usual commission structure in the area of Richards Bay;
(d) what the commission structure found application in the instance of the parties;
(e) whether the plaintiff is entitled to any commission, whether in contract, alternatively, in terms of an enrichment action, and if so, the quantum of such
commission; and
(f) Whether Mrs. Van der Vlies was an expert witness whose opinion would be
admissible.
In simple terms, is Remax Marine entitled to commission??? I will answer this question for you next week and let you know what the Court had to say. In the meantime, what do you think?
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