The Rental Mandate is the Contract under which the Rental Agency can Claim Entitlement to Payment.

NO Mandate = NO Entitlement to Payment

What is a Rental Mandate?

The Rental Mandate is the contract between the landlord or property owner and the rental agency represented by the Principal – not between the landlord and individual agents.

In terms of the Rental Mandate, the Landlord engages the agency to carry out certain duties on their behalf in exchange for an agreed fee.

The Rental Mandate Relationship
The Rental Mandate Relationship

The Rental Mandate sets out (or should set out clearly) the duties that the agency agrees to perform – there usually include the landlord’s duties and obligations under the Rental Housing Act (RHA), as well as other duties that are not directly related to the Landlord’s duties under the RHA, e.g. advertising and showing available rental properties to prospective tenants, evaluating tenant applications, collecting rent, implementing agreed arrears management procedures and corrective actions, etc.

Can you explain your obligations under your Rental Mandate clearly to Prospective Landlord Clients?

Rental Mandate Agency Obligations
Rental Mandate Agency Obligations

Every rental agent need to know and full understand the specific rental mandate their agency operates under in detail.

Why? So you can explain to the landlord exactly what services you DO and (just as importantly) DON’T provide.

What services are NOT included in the mandate are honestly just as important as what IS included. I have come across many instances during my career where Landlord/s seem to think that the Rental Agent is their private, personal assistant that is obliged to carry out any instructions from them that relate to their rental property.

Of course, this is not the case, which is why it is so important to go through the rental mandate in detail with the Landlord BEFORE it is signed to ensure that everyone is on the same page.

Just like any contract, both the landlord and the agency have rights and obligations under the mandate.

In addition to performing duties listed in the mandate, there’s another important aspect of this contract – the landlord is appointing the agency for their specialised knowledge and experience in the field of residential property rentals.

This is important to note as often agents use ‘the landlord said so’ or ‘the landlord agreed’ when there’s a query or a problem, BUT the agent/agency should be advising the landlord NOT taking instructions from the landlord without advising them of their rights and obligations and what the right thing is to do as well as their risks

The Rental Mandate and the Consumer Protection Act

The Rental Mandate and the CPA
The Rental Mandate and the CPA

In terms of the rental mandate, the rental agency is the supplier of services and the landlord is the consumer.

It’s critical to understand this clearly in order to understand the operation of the Consumer Protection Act (CPA) as it pertains to the mandate.

What does that mean?

Well, if the mandate is for a fixed term, then the terms of the CPA apply, including, not limited to:

  • The landlord can cancel a fixed term mandate at any point in time and for any reason whatsoever by simply giving the rental agency 20 business days notice of cancellation. Of course the agency may impose a ‘reasonable cancellation penalty’, but that’s a discussion for another time
  • If the landlord breaches and of the terms of the rental mandate, the agency can issue the landlord with a notice of breach (i.e. Letter of Demand) giving them 20 business days to remedy their breach, failing which the agency can cancel the mandate.

Where do individual Agents fit into the Landlord-Agency relationship?

Individuals (rental agents) are employed by the rental agency to perform the day to day activities on the agency’s behalf in terms of their contract of employment.

The Landlord-Rental Agency-Rental Agent Relationship
The Landlord-Rental Agency-Rental Agent Relationship

Amongst their other obligations, the agents are responsible for fulfilling the agency’s obligations under the rental mandate

So, the agency enters into a contract with the landlord and then employs agents to carry out their obligations.

The agency gets paid by the landlord for carrying out the agreed obligations and the rental agent usually gets paid a portion of the income the company receives, or as stipulated in their employment agreement.

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