A mandate is not an every-day concept to many people. We have encountered many different ideas of what a mandate is, and we would like to give some clarity through this discussion:
What Is A Mandate?
"Mandate" simply means "an agreed upon capacity to do" something, or "an authorization to act given to a representative".
A mandate, where a real estate agent is concerned, is essentially a marketing agreement between the seller and the agent. Many other professionals also act on a mandate, whether oral or written. Think about it:
When your surgeon, banker, lawyer or attorney does something you asked them to do, he or she is acting on your mandate.
Your representative is only authorized to act in accordance to the mandate he or she received. That is why you don't wake up with a new nose when you give your surgeon a mandate to operate on your mole!
How Is A Mandate Given?
A mandate can be given by either an oral or written statement to the effect that you give the agent or agency an instruction to find a buyer for your property.
"Would you mind if I bring someone who might be interested?"
You have just given the agent an oral open mandate to sell your house!
An open mandate can also be given in writing. A letter to your estate agent informing them that your house is for sale, and inviting them to introduce potential buyers, is an example of a written open mandate. Some real estate agencies have written open mandate forms which they will fill in and ask you to sign. A written open mandate gives the agent a clear instruction and eliminates any misunderstandings.
Some mandates must be written mandates to be valid. Sole and exclusive mandates must be in writing to be binding. These written mandates must contain a description of the property, a description of the mandate period, state that it is a sole and/or exclusive mandate, and be signed by the owner or owners.
Validity of a Mandate
An open mandate stays in effect until it is withdrawn, or until another mandate comes to effect that conflicts with the first mandate.
If you, for example, give one agency a sole mandate, the open mandates given to other agencies are no longer valid.
A sole and/or exclusive mandate can be withdrawn at any stage, unless it states clearly that it is irrevocable. A sole and/or exclusive mandate also only stays valid for the duration of the mandate period. When the mandate period lapses, so does the sole and/or exclusive mandate.
For any mandate to be valid, whether an open, sole, or exclusive mandate, there is a requirement that the mandate grantor must have intended to give that mandate. In other words: If you were duped into signing an Mls, sole, or exclusive mandate while intending to give an open mandate, that mandate is not worth the paper it is written on!
This should not be seen as an easy way out of a sole mandate though. It can turn into an ugly court dispute that can become very costly. Rather read through and understand every document before you put your signature to it.
If you have been tricked into signing a mandate that you did not intend giving, you definitely have a right to be angry. In such a case, it would be advisable to give the agency 7 days written notice of cancellation or to get legal advice.
As seller, you would normally be entitled to appoint the transferring
attorney. Your transferring attorney would most likely be glad to assist
you in this too.