Why Mandates Matter

A mandate is not just paperwork. It is a legal instruction that:

• Authorises you to act for a seller or landlord
• Determines when commission is earned
• Protects (or exposes) you legally and financially

Poorly explained mandates are one of the leading causes of commission disputes, complaints, and PPRA issues.

The Four Common Types of Mandates

1. Open Mandate

What it is:

• Seller may appoint multiple agents
• Seller may sell privately
• No exclusivity

Commission Rule:

• Only payable to the agent who is the effective cause of the sale

Key Risks for Agents:

• No guarantee of commission
• High competition
• Disputes over effective cause

Best Practice:

• Confirm everything in writing
• Manage time spent and marketing costs carefully

2. Joint Mandate

What it is:

• Two or more agencies are formally appointed together
• Agencies cooperate instead of competing

Commission Rule:

• Commission is shared as agreed in writing

Key Requirements:

• Clear written agreement
• Commission split must be stated
• Roles and invoicing responsibility must be clear

Common Mistake:

• Verbal joint agreements without written commission splits

3. Sole Mandate

What it is:

• Only one agent is appointed
• Seller may or may not sell privately (depends on wording)

Commission Rule:

• Commission payable if the agent is the effective cause
• Private sale commission depends on mandate terms

Why Sellers Choose It:

• More focus from one agent
• Better marketing accountability

Agent Responsibility:

Explain clearly:

• Whether private sales are allowed
• What happens at expiry
• Any protection clauses

4. Exclusive Mandate

What it is:

• Full exclusivity to one agent
• Seller may not appoint other agents

Commission Rule:

• Commission is payable even if the seller sells privately
• Provided the mandate is valid and properly explained

Highest Risk Area:

• Seller misunderstanding exclusivity
• Inadequate disclosure leading to complaints

Best Practice:

• Explain exclusivity slowly and clearly
• Confirm understanding in writing
• Avoid pressure tactics

Mandatory Disclosures In Every Mandate

Every mandate must clearly set out:

• Commission amount or percentage (plus VAT)
• Duration (start and end dates)
• Type of mandate (open, joint, sole, exclusive)
• Cancellation and termination terms
• What happens in a private sale
• Protection clauses (if applicable)

Never rely on verbal explanations alone.

Ethical & Legal Principles

Good mandate practice supports:

• Informed consent
• Transparency
• Fair dealing
• Professional competence

Remember:

If the seller does not understand the mandate, it is not ethical — even if it is signed.

Most Common Mistakes Agents Make

• Not explaining exclusivity properly
• Assuming sellers understand commission liability
• Using templates without tailoring explanations
• Failing to document private sale scenarios

Professional Tip

The strength of your mandate conversation determines the strength of your commission claim.

Strong mandate explanations:

• Fewer disputes
• Stronger client trust
• Better PPRA protection
• More sustainable income

Power Of Attorney In Property Transactions

What is a Power of Attorney (POA)?

A Power of Attorney is a written legal document where one person (the principal) authorises another (the agent) to act on their behalf.
In property matters, POAs are commonly used when a buyer or seller is unavailable, overseas, or unable to sign documents personally.

Special Power of Attorney (SPA)

What it is:

A Special Power of Attorney authorises the agent to perform one clearly defined act, usually relating to one specific property.

Key Features:

• Limited to one transaction
• Automatically expires once the task is completed
• Not registered in the Deeds Office
• Original SPA must be lodged with conveyancing documents
• Low risk and widely accepted

Typical Property Uses:

• Signing a sale agreement or transfer documents for one property
• Purchaser signing bond and transfer documents
• One spouse signing on behalf of another

Example:

A seller relocates overseas before transfer.

They sign an SPA allowing a conveyancer to sign transfer documents for 123 Main Road, Sandton only.

General Power of Attorney (GPA)

What it is:

A General Power of Attorney gives the agent broad authority to act on behalf of the principal in multiple matters, often over a longer period.

Key Features:

• Wide ranging authority
• Can cover multiple properties
• Often registered at the Deeds Office
• Higher risk if misused
• Must be carefully drafted

Typical Property Uses:

• Client permanently living overseas
• Management and sale of multiple properties
• Long term property portfolio administration

Example:

A client emigrates and grants a GPA to a relative to manage rentals, sign sale documents, and sell several properties over time.

Use with caution – conveyancer involvement essential

Important Legal Rules

A POA ends immediately if the principal:

• Dies
• Becomes mentally incapacitated
• Revokes the POA
• Enduring POAs are not recognised in South Africa
• If signed outside SA, the POA must be properly authenticated (Apostille / Rule 63)
• POA must be signed by the principal and two witnesses

Best Practice

• Always confirm which type of POA is being used
• Prefer Special POAs for single transactions
• Ensure the property description is accurate and complete
• Refer POAs to the conveyancer for approval
• Flag General POAs early due to risk and registration requirements