LEGAL
Bryan Hack
To Build has noted several media and other reports from the legal and property industries in recent times dealing with claims that estate agent’ s commission may be due even when a property sale is not concluded. We asked our regular legal writer, Adv. Bryan Hack, for his thoughts on this matter. He makes it easy to understand for our readers.
I was recently asked to advise a property practitioner who had spent many hours putting together a deal to sell a property. At the last minute, one party got cold feet and the deal was cancelled. Because the cancellation was not the agent’ s fault, he wanted to know if he could still claim commission.
Before I summarise the legal position, allow me to reminisce. My parents married at the end of World War II and my father used a bicycle to deliver documents as a messenger for a firm of estate agents in Johannesburg. Some 20 years later, he set up his own business in Cape Town.
For a long time, we lived through the proverbial fat and lean years. Sadly, during a property bubble collapse, his company was liquidated. I therefore understand the highs and lows of anticipating commission, only to have it disappear like morning mist.
The advice I gave my client is based on a refrain that often appears in this column:“ It ultimately depends on the terms of the agreement.”
The mandate
Before turning to the mandate, which is the agreement at issue, one preliminary legal question must be asked: Was the agent, a term most people find easier to use than“ property practitioner”, the effective cause of the sale?
If the answer is“ yes”, then consideration must be given to the terms of the mandate. The mandate may not necessarily be contained in a written document. The offer or agreement of sale may also contain the relevant mandate clauses. The first task, therefore, is to identify whether the terms of the agreement are written, oral, or, as is often the case, a mixture of the two.
The test for determining whether an agent is entitled to commission is whether the agent has fulfilled the mandate.
As is always the case in law, each matter depends on its own facts. However, in broad terms, the mandate could provide for commission to be payable on signature of the agreement by both parties, only on transfer, or even in the event of the sale being cancelled as a result of one party’ s breach of the agreement.
Possible breach of an agreement
It is important to distinguish between breach of an agreement and a sale that is subject to a suspensive condition that is not fulfilled.
A common example is a sale that is subject to approval of a loan with or without the registration of bond. If the loan is not approved, the sale is simply cancelled because the condition has not been fulfilled.
It is improbable that any party would sign an agreement in which the agent ' s commission is guaranteed, even if a suspensive condition is not fulfilled.
As the offspring of an estate agent, I can say that such an arrangement would have greatly improved my younger days! However, in truth, too many anticipated commissions were never received because bond approval was not granted.
Contact the writer
Email questions to Adv. Bryan Hack at hack @ capebar. co. za or visit capebar. co. za / advocates / hack-bryan /
110 winter 2026 | www. tobuild. co. za