In most jurisdictions, the general rule is that an estate agent’s commission is only payable if there is a valid agreement in place. This agreement can be in the form of a written contract or verbal understanding. Without an agreement however, the agent’s commission may not be enforceable.
That said, there are exceptions and considerations that may still render agent’s commission payable. If an agent can prove that their actions and the client’s behavior implied an agreement, commission may still be payable. In some instances, industry norms and customs may establish a standard commission rate, making it enforceable even without an explicit agreement had the client received services from the agent.
In the recent case of Golden Rewards 120 CC t/a Remax Marine v M3 Holdings (Pty) Ltd (D42/2019) [2024] ZAKZDHC 22 the issue of whether commission payable in the absence of an express agreement was in front of the court.
Having considered the matter the court found that having reviewed the facts, there was found to be an
implied consensus on what was due to the plaintiff in lieu of the services rendered. This was further corroborated by the fact that there had been attempts by the parties to agree on some form of remuneration and as there was no evidence presented to rebut the presumption of commission being payable, the court found it permissible to allow a reasonable remuneration.
As to what would be seen as reasonable remuneration, the court confirmed the view that as a general rule that where nothing is said about the remuneration an estate agent is to receive, there is nonetheless a tacit promise to pay commission at the usual rate or customary rate of commission unless there is specific evidence to the contrary. In the Remax Marine case the court accordingly found that the estate agent was entitled to commission despite the absence of an express agreement regarding commission or the amount of commission.
This case however highlights the importance for both client and estate agent to avoid disputes and upfront and in writing agree to the scope of the estate agent’s mandate and remuneration structure before services are provided.
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