This week the Property Poser panel looks at the ramifications of a situation where the conveyancing attorney paid out an estate agent’s commission before he was entitled to do so.
A reader writes that he paid a deposit into the attorney’s trust account, which was earmarked for transfer costs. The attorney instead used the money to pay the agent’s commission and, when confronted by the reader, admitted that he paid the agent “prematurely”.
The inappropriate payment of monies held in trust by a conveyancing attorney, or any attorney for that matter, is viewed in a very serious light, says Rian du Toit from DTS Attorneys in Port Elizabeth.
“The nature of the attorney’s trust account is that funds are held for a specific purpose on behalf of another party. The attorney can only act on the instructions of the party who paid the monies.”
Du Toit says the other part of the problem here revolves around the fact that an estate agent earns commission on fulfilment of his or her mandate.
“Unless the mandate stipulates differently, this is when a binding agreement of sale takes place between the seller and a willing and able purchaser, culminating in the transfer of ownership.”
The payment of the said commission therefore takes place on the date of registration of transfer, says Du Toit.
“In terms of the Estate Agents’ Code of Conduct, an agent may not receive any commission on a sale that is subject to