Before signing a mandate, it is important for you to determine who the seller is, as only the true owner of the property can be your seller.
- Natural sellers:
A natural entity is any person or persons operating in their personal capacity. The seller can be more than one person, i.e. a husband and wife, or two single people, etc. In each case, it becomes important for you, as the agent, to correctly identify the parties signing the mandate.
You will need to establish, via a deeds search, who the legally registered seller is. Whoever is registered on the title deed as the owner is the person/s who needs to sign the mandate. A seller can nominate someone as their agent (not an estate agent) to act on their behalf. If this is the case, then you would need to obtain a copy of the agreement authorising the agent to act on behalf of the party. A Power of Attorney agreement is an example of such an agreement.
The person reflected as the owner on a deed search might not always be the only owner. If a party got married in a community of property subsequent to acquiring the property, then by operation of law the new spouse will also be a seller.
Once you have established who the seller/s are then you need to do a further identification of the party to verify who they are. The FIC Act requires you to get a copy of their identity document. Other documents you could obtain under the “know your client” requirements by FICA would be a copy of a proof of residence, income tax number, rates account, etc.
When completing the details on the mandate the seller must be clearly identified by their names. We advise that you use their first name, initials, and then surname (i.e. Susan JPL Snyman). This is applicable to all parties to the contract. The FICA information form at the back of the mandate is part of the mandate and needs to be comprehensively filled in as this fully identifies the seller.
- Legal Entities:
A legal entity consists of either a trust, close corporation, or company.
The legal entity’s registration documents would be required to identify the entity. If there is more than one director/member/trustee then a resolution permitting the person signing on behalf of the legal entity must be obtained before completing the OTP. If you do not have this resolution then your OTP would be considered null and void as the entity’s signatures would not be valid and your OTP would not have been signed by both parties.
The person signing on behalf of the legal entity must be correctly identified and a copy of their ID and other “know your client” details would be applicable.
Any legal entity that does not want to give you their FICA documents is considered suspicious under the FIC Act. Continue with the transaction, however, it would be your responsibility to do an anonymous report thereof to FIC. Consult your FICA training notes.
Another thing to check for when identifying the parties is their marital status. If any parties are married in a community of property, then their spouse would have to give consent. You would need to obtain a copy of this consent or have the spouse included in the contract. In the event of a trust, I strongly recommend that you get a copy of the trust deed, as well as the Letter of Appointment to ensure that the trust can act and can purchase or sell the property. In the event of a company or a close corporation, I suggest that you conduct a deeds office search to ensure that the person signing is indeed a director of the company.
Note: The Agent is ALWAYS the agency and/or its principal. The agent is NEVER the person facilitating the mandate. An estate agent is a representative who represents the AGENT being the Company and the principal they work under.