With the large volume of property work that we assist clients and Real Estate professionals with every year, we see many situations where Agents miss out on commission or face major delays in payments.

We have set out a few issues below which you may find helpful in updating your team members or in training new ones.

Trap One … Failure to Get Your Vendor’s Written Appointment as Agent

The effect of not complying with this requirement is to make the agency contract entirely unenforceable. You cannot deduct commission from the deposit, and you cannot recover commission as a debt due from the vendor.  (Section 62 Real Estate Agents Act).

Trap Two … In the Case of a Purchase by the Agent from His or Her Vendor

Failure to strictly comply with the Real Estate Agents Act requirements. These are:

  • Vendor’s consent must be obtained.
  • Before seeking the consent or, if the vendor agrees, within 14 days after obtaining the consent, an independent valuation is to be supplied.

These rules apply not only to the listing agent personally, but also to any partner or other employee of the Real Estate Agent firm, and any spouse or child of any of these persons.

Any contract made in contravention of these rules is voidable at the vendor’s option, and whether or not the sale proceeds, no commission is payable. If any commission has been paid, it must be refunded in full.

Trap Three … Failure to Collect the Deposit

If the contract provides for payment of a deposit, as is usual, then the agent is under a duty to collect the deposit, or to advise the vendor if it has not been paid. Failure to comply with this duty, while not automatically disentitling the agent to commission, invariably results in delays in getting paid, and worse, can lead to difficulties in obtaining your commission at all.

Trap Four … Failure by the Agent to Exercise Due Care and Skill

An agent should:

  • Advise as to the best method of sale, and the price likely to be obtained.
  • Avoid misrepresentation by ensuring that any information given to a purchaser is accurate.
  • Ensure that the agreement is properly drawn up, that it accurately describes the property, and is correctly signed by all parties.

Failure to provide competent and professional standards of service can give vendors grounds for withholding payment of commission, or disputing the amount payable.