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The new Consumer Protection Act includes a five day cooling-off period that allows any buyer to effectively cancel an offer to purchase as long as this is done within five days of the offer being submitted and accepted.
According to Lanice Steward, managing director Anne Porter Knight Frank, the implications are much wider than just cancelling a sale. She says that any estate agent who gets a sole mandate from a seller must realise that the seller can cancel that sole mandate as long as he or she does so within five working days of signing it.
“There is an important proviso though. This ruling only applies if the sole mandate to sell the property came about as a result of a direct marketing campaign.
“In practice this means that if a client responds to a letter, a fax or an e-mail then it is deemed as direct marketing and the sole mandate agreement can be cancelled within five working days,” says Steward.
She says that in terms of the Act the agent must explain all the implications of a sole mandate and must inform the seller of their right to cancel the mandate within five working days.
Steward says that the CPA will result in the relationship between the client and the estate agent becoming that much more structured and formal.
“All communications and all agreements will have to be unambiguous and any clauses that may seem difficult to understand must be simplified. If Latin terms are used these must be translated into simple English.
Steward says that a sales mandate – whether sole or open – is a fundamental part of the sales process and this mandate should contain a comprehensive list of all the characteristics of the home, including its flaws.
Steward says that it’s important for the seller and agent not to ignore aspects such as damp patches or stains because in terms of the new Act, any material defects that are not disclosed could result in cancellation of the sale or even damages being claimed to repair the faults.
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