1. Estate agent's right to commission 2. Sectional title levies: the new law 3. Sectional title levies: the new law



Estate agent's right to commission A question which we are often asked at courses and workshops, and over the phone is: if I present my seller with an offer for full asking price, or more than full asking price, and he refuses to accept it, am I still entitled to commission? The short answer is: what are the terms of the mandate document? If it contains a clause in which the seller agrees to pay commission if he refuses to accept such an offer (or if he takes the property off the market, or otherwise prevents the agent from selling it), then the estate agency can hold the seller to those terms and claim commission. But if it does not contain such a clause, then the agency may not have a claim. There is no common law principle which would entitle the agency to commission in such circumstances. Our advice would be for the estate agency to consult its attorneys for legal advice on the merits of the case. In general, we suggest that estate agencies make sure that their standard mandate documents are properly worded to cover contingencies such as this. Sectional title levies: the new law An amendment to the Sectional Titles Act came into operation some months ago. In terms of this amendment, when a section owner sells his property, he must now pay up his levies in advance for the balance of the Body Corporate's financial year. If he gives transfer to the buyer before the financial year-end, he can recover the excess from the buyer. This places sectional title levy clearance on the same basis as the municipal rates clearance on a conventional title property, where the property owner has to pay in advance and recover from the buyer. However, a Body Corporate has the power to pass a resolution to allow the seller to pay the levy only up to the date of transfer, and to require the buyer to pay from that date onwards. What does this mean to the sectional title agent? It means that he or she now needs to ask each seller what the relevant Body Corporate's policy is in this regard, to advise the buyer accordingly when calculating costs of purchase, and to word the agreement of sale accordingly. Rates Act passed at last After several years of labour, the Local Government Property Rates Act has finally been passed and gazetted. However, the date on which it will come into operation had not yet been announced at the time IEA News went to press. Sectional title agents may be interested to know that, once the Act comes into operation, sectional title units will be rated individually. This will mean that instead of levying a rate on the Body Corporate for the whole scheme, and leaving it to the Body Corporate to recover the rates pro rata through the levies, the municipality will send a rates account to each individual section owner, and the owner will have to pay his or her rates directly to the municipality. The rates portion of the levy will therefore be reduced to the rates on the common property. The section owner will therefore have two accounts to pay: the levy to the Body Corporate, and the rates to the municipality. Managing agents who base their fees on the monies collected on behalf of Bodies Corporate will be affected, because the monies collected will be less than they are under the present system. We will notify our members once the government has announced the date on which the Act comes into operation.