12 October 2023
In the rental space, the necessity of a Rental Mandate is questioned from time to time. Should a Landlord decide to appoint a rental agent to manage their property, or just procure a tenant, it is essential that a rental mandate is signed, outlying the responsibilities and obligations of each party. While a Lease Agreement is a contract strictly between a Landlord and a Tenant; the Rental Mandate is the contract a Landlord would have with their appointed rental agency, giving the agency the authority to lease their property.
In the dynamic world of property rentals, establishing clear, legally binding agreements is paramount. One such crucial document is the Rental Mandate, which serves as the foundation for a successful landlord-agent relationship. At Rawson Rentals, we emphasise the importance of this mandate to ensure transparency, compliance, and mutual understanding.
What is a Rental Mandate?
A Rental Mandate is a formal contract between a landlord and a rental agency, granting the agency authority to lease and manage the landlord's property. This document delineates the responsibilities and obligations of both parties, setting the stage for a harmonious partnership. It's essential to note that while a Lease Agreement binds the landlord and tenant, the Rental Mandate specifically governs the landlord-agent relationship.
In South Africa, the property industry is regulated to uphold professionalism and protect stakeholders. The Property Practitioners Regulatory Authority mandates that property practitioners must have a written and signed mandate before offering or negotiating any property transactions. Section 34.3 of the Property Practitioners Regulations explicitly states:
"No estate agents shall offer, purport or attempt to offer any immovable property for sale or let... unless he has been given a mandate to do so by the seller or lessor of the property."
Therefore, it is imperative to have a Rental Mandate that is signed and in place in order for the agency to legally advertise and market a property.
Key Components of a Rental Mandate
A Rental Mandate typically includes in writing the following key points:
- Marketing and Advertising Strategies: Details of how the property will be promoted to attract suitable tenants.
- Agreed Rental Amount: The rental price approved by the landlord.
- Agency Commission: The fee structure payable to the agency for their services.
- Property Condition Acknowledgement: Confirmation that the property has been appropriately valued and is in a rentable state.
As stipulated above, it is a requirement by law to have a Rental Mandate in writing. Should a situation arise where a mandate is not in place, the Landlord could face a few of the following disadvantages:
- Double Commission Liability: Without an exclusive agreement, multiple agents might claim commission for the same transaction.
- Undefined Rental and Commission Terms: Absence of written terms can lead to disputes over rental amounts and agency fees.
- Unverified Agency Credentials: Without a mandate, there's no assurance that the agency complies with regulatory standards.
- Limited Recourse for Underperformance: Without a contractual agreement, addressing agency shortcomings becomes challenging.
By having a Rental Mandate in place, both the Landlord and the agency understand all obligations required of either party, providing a seamless letting journey for the duration of the lease agreement, or any extension thereof.
At Rawson Rentals, we prioritise establishing clear and lawful Rental Mandates to ensure a seamless letting experience. Our commitment includes:
- Transparent Communication: We ensure all terms are clearly outlined and mutually agreed upon.
- Professional Marketing: Utilising effective strategies to showcase your property to potential tenants.
- Regulatory Compliance: Adherence to all legal requirements, safeguarding your interests.
- Dedicated Support: Our team provides continuous assistance throughout the leasing process.
By securing a Rental Mandate with Rawson Rentals, landlords can confidently navigate the rental landscape, knowing their property is in capable and compliant hands.
