Here’s how to determine which agent is the effective cause of the sale
Determining the effective cause of a sale of immovable property where more than one agent is involved can be notoriously difficult. There is, however, case law that sets out the main factors to be kept in mind when determining the effective cause of a sale.
The following factors were taken into account by the courts:
- The nature and the effect of the estate agent’s efforts must be considered, not the amount thereof (Aida Real Estate Ltd v Lipschitz);
- The first introduction of the purchaser, but this is not necessarily a decisive factor:
- In this instance, the events that occurred after the original introduction are taken into account to determine whether the chain of causation between the agent’s endeavors and the eventual transaction has been broken (Mano et Mano v Nationwide Airlines (Pty) Ltd (SCA)).
- Where a second agent concludes the sale and the reason being that he reduced his commission, this can be seen as the decisive factor in buying the property (Barnard & Parry v Strydom & Webranchek v LK Jacobs & Co Ltd).
- An estate agent’s mere attendance at negotiations between a buyer and seller does not make him/her the effective cause;
- The closing agent is not necessarily the effective cause where there are two agents involved (Howard & Decker Witkoppen Agencies and Fourways Estates (Pty) Ltd v Desousa);
- Cessation of negotiations between an estate agent and a prospective buyer does not necessarily deprive the agent from his/her entitlement to commission (Basil Elk Estates (Pty) Ltd v Curzon);
- An estate agent can be the effective cause even if the seller is unaware of the estate agent’s role: This is where an agent has been mandated by the seller to sell the property and the seller sells to a purchaser introduced to the property not knowing he/she was previously introduced by the agent (Van Zyl en Seuns (Edms) Bpk v Nel).
- The effective cause of the sale is not determined by which agent did the most work but on the actual final results (Wakefields Real Estate (Pty) Ltd v Attree).
It is important here to note that double commission may be payable by the seller in certain instances where it cannot be discerned that only one agent was the effective cause.
In all cases of this nature the facts must be decided on their own merits and it is not possible to make a blanket ruling as to what agent is entitled to commission.
This article is reproduced here with the kind permission of MC van der Berg Inc