Estate Agent Commission: What It Costs, and When an Agent Cannot Charge It at All

On a R2 million sale, the agent's fee is usually the single largest cost the seller pays — larger than the bond cancellation, larger than the compliance certificates, often larger than everything else combined.

Most sellers accept the first number they are quoted, because they believe it is standard. It is worth knowing where that belief comes from, because it does not come from the law.

The Property Practitioners Act of 2019 governs the entire profession: who may practise, what they must disclose, how their trust accounts work, when they may be sanctioned. Search the whole Act and the word commission does not appear once. Neither does the word tariff. There is no prescribed rate, no cap, and no legal "usual" figure.

What the Act does contain is something far more useful to a seller — a set of circumstances in which an agent is not entitled to be paid at all.

The rate is convention, not law

Because nothing is prescribed, the fee is whatever the mandate says it is. That makes it negotiable in a way most sellers never test, and the sensible negotiation is rarely a flat demand for a lower percentage.

Things that genuinely move the number:

• Exclusivity and duration. A sole mandate is worth more to an agent than an open one. That is leverage, and it is the leverage most sellers give away for nothing.
• What the fee includes. Photography, video, portal listings, show days and marketing spend may be inside the fee or billed on top. Establish which before you sign, in writing.
• A sliding scale. A lower base with a higher rate on anything achieved above an agreed price aligns the agent with the outcome rather than the transaction.
• The price band. A percentage that is unremarkable on a modest home becomes a very large sum on an expensive one, and the work does not scale proportionally.

Get the fee, the mandate type, the mandate period and what happens on expiry into the written mandate. A dispute about commission is nearly always a dispute about what the mandate said.

The provision that matters most

Here is the part of the Act that changes the balance, and that very few sellers know exists.

Under section 56(1), a property practitioner "is under no circumstances entitled to any remuneration or other payment" arising from the acts that define the role, unless — at the time of performing that act — the practitioner is in possession of a Fidelity Fund certificate.

Note three things about how that is worded.

It is not a technicality with a discretion attached. "Under no circumstances entitled" is about as absolute as statutory language becomes.

The test is the date of the act, not the date of payment. An agent whose certificate was invalid while marketing and selling your home does not fix the problem by renewing before the transfer goes through.

And it reaches further than the individual. Where the practitioner is a company, every director must hold a certificate; where it is a close corporation, every member must. Section 48 extends the same requirement to every director, member, trustee or partner of a company, close corporation, trust or partnership. A single lapsed certificate anywhere in that ownership structure can defeat the entire claim to be paid.

How to check, in one line

Ask for the Fidelity Fund certificate before you sign the mandate, and ask for it to cover the individual agent, the agency, and its directors or members.

You can verify status with the Property Practitioners Regulatory Authority, the body the Act continues in place of the old Estate Agency Affairs Board. This is a normal request and a compliant agency will produce the certificate without drama. An agency that treats the question as an insult has told you something.

Do it at the mandate stage. Discovering the problem after transfer turns a simple check into a claim.

The conveyancer is a checkpoint

There is a second gate, and it sits with the transferring attorney.

Under section 56(5), a conveyancer may not pay any remuneration to a practitioner unless that practitioner has given the conveyancer a certified copy of a Fidelity Fund certificate valid both during the period or on the date of the transaction, and on the date of payment. Where all the conditions have been met, the section provides that the conveyancer must pay.

So the money does not simply flow. A seller who raises the question with the conveyancer before commission is released is asking about a check the attorney is already obliged to perform.

If you have already paid

The Act anticipates this, and it sets a clock.

Under section 56(3), a practitioner who has received remuneration in these circumstances "must immediately pay that amount to the Fund". Any affected seller, purchaser, lessor or lessee may then, within three years of that money having been paid to the Fund, submit a written claim with the necessary proof.

Two honest caveats, because this is not an automatic refund. The Fund "may pay that amount or a portion thereof to that applicant which is equitable in the circumstances" — it is a discretion, and it may be partial. And under section 56(4), any amount not claimed within three years "irrevocably becomes the property of the Fund".

If you have reason to think commission was paid to an uncertificated practitioner, that is a matter to raise promptly and in writing, with proof, rather than to sit on.

The disclosure form that changes what a buyer can argue

One more provision worth knowing, on both sides of a sale.

Section 67 requires the practitioner not to accept a mandate unless the seller or lessor has provided a fully completed and signed mandatory disclosure form in the prescribed form, and to give a copy to a prospective purchaser or lessee who intends to make an offer.

The completed form must be attached to the agreement and forms an integral part of it. Then comes the consequence, in section 67(2): if the form "was not completed, signed or attached, the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser."

For a seller, that is a reason to complete the form carefully and keep proof of it. For a buyer who was handed no form, it is a materially stronger position than most realise. Section 67(3) adds that a practitioner who fails to comply "may be held liable by an affected consumer", and section 67(5) preserves the buyer's right to arrange their own inspection regardless.

Section 68 puts the drafting where the cost sits: the agreement, or the disclosure form, must be drafted by the developer or seller for their own account.

A short checklist before you sign a mandate

1. Ask for the Fidelity Fund certificate — agent, agency, and directors or members — and check it is current.
2. Get the fee, what it includes, the mandate type and the mandate period in writing.
3. Negotiate on exclusivity and duration rather than only on the percentage.
4. Complete the mandatory disclosure form properly and keep a signed copy.
5. Confirm with the conveyancer, before transfer, that the certificate requirement has been satisfied.

None of this is adversarial. A good agent earns their fee, and the ones who are compliant and confident will have every one of these documents ready. The purpose of asking is to find out early which kind you are dealing with.

Where to go next

If you are working out the numbers on a move, our transfer duty calculator covers what a buyer pays the receiver, and our bond calculator covers the financing side. If you are buying as well as selling, our guide to home loans compares what the lenders offer.

For everything else, start at our money guides.

Frequently asked questions

Is there a legally fixed estate agent commission in South Africa? No. The Property Practitioners Act does not use the word commission at all, and prescribes no rate or cap. The fee is whatever the written mandate provides, which makes it negotiable.

When can an agent not charge commission? Section 56(1) provides that a practitioner is "under no circumstances entitled to any remuneration or other payment" unless, at the time of performing the act, they held a Fidelity Fund certificate — and where the practitioner is a company or close corporation, every director or member must hold one too.

Does it matter if they get certified later? The section tests possession at the time the act was performed, not at the time of payment.

Can the conveyancer just pay them anyway? Not without a certified copy of a certificate valid during or on the date of the transaction and on the date of payment. Where the conditions are met, the conveyancer must pay.

I already paid commission to an agent without a certificate. Now what? The practitioner must pay that amount to the Fund, and an affected seller, purchaser, lessor or lessee may claim it in writing, with proof, within three years. The Fund may pay all or an equitable portion — it is a discretion, not a guaranteed refund — and after three years unclaimed money becomes the Fund's property.

What is the mandatory disclosure form? A prescribed form the seller or lessor completes and signs. The agent must not accept a mandate without it and must give a copy to a prospective buyer or tenant making an offer. It is attached to and forms part of the agreement.

What happens if no disclosure form was completed or attached? The agreement must be interpreted as if no defects or deficiencies were disclosed to the purchaser.

Who pays to draft the agreement? Section 68 requires the developer or seller to draft the agreement, or the disclosure form, for their own account.