A recent judgment handed down by the Western Cape High Court has brought much-needed clarity to a question that estate agents, sellers, and property attorneys frequently encounter: Can a party claim commission simply because they facilitated a sale — even if they're not named in the signed sale agreement?

In Property Knight (Pty) Ltd v Van Niekerk Groenewoud and Others [2024] ZAWCHC 30, the High Court dismissed an appeal by a real estate company that tried to claim commission on the sale of a sectional title unit. The company argued that one of its intern agents had introduced the buyer and was the effective cause of the transaction. However, the court held firmly that the only valid basis for a commission claim is a clear contractual right — and that right must be set out in the written agreement.

This decision reinforces an important principle of property law: commission follows contract. If an estate agency is not expressly recorded in the agreement as the entitled party, then — regardless of their efforts behind the scenes — they cannot demand payment.

What Happened in the Case?

In September 2021, the VW Trust (the seller) entered into a written agreement of sale with a purchaser for a property in the Ruskin Villas sectional title scheme. The sale price was R1.5 million, and the agreement included a standard clause instructing the seller’s conveyancers — Van Niekerk Groenewoud and Van Zyl (VGV) — to pay a 5% commission (inclusive of VAT) to Virtual Realty Group (VR Group) upon registration of transfer.

However, a complication arose. The purchaser had been introduced to the property by Mr Bernard, an intern estate agent registered under Property Knight (Pty) Ltd — a different estate agency entirely. At the time of the sale, Bernard held a fidelity fund certificate as an intern working under Property Knight. VR Group was the named recipient of the commission in the agreement, but it was not clear how Bernard had come to act under their name, or whether he was acting independently.

When it became apparent that Property Knight believed it was entitled to the commission, urgent proceedings were launched in the Magistrates’ Court to block payment to VR Group. That attempt failed. VGV then issued interpleader summons to ask the court to decide who should lawfully receive the commission.

The Arguments Made by Each Party

The interpleader proceedings revolved around two conflicting claims:

• VR Group’s position - The sale agreement named them specifically as the party entitled to commission. The agreement contained clear clauses confirming their role and instructions to VGV to pay them directly from the deposit or sale proceeds.
• Property Knight’s position - Their intern agent, Bernard, was the person who had introduced the purchaser to the property and had done the work of securing the sale. They claimed this made them the “effective cause” of the transaction and thus the rightful recipient of the commission.

In the Magistrates’ Court, the Magistrate found in favour of VR Group, holding that since Property Knight was not named in the agreement, and the agreement was not rectified, varied, or cancelled, it could not claim the commission.

Property Knight appealed that decision — but the High Court came to the same conclusion.

The Legal Principle: Commission Follows Contract

The High Court, led by Acting Judge Adhikari (with Judge Binns-Ward concurring), made a clear and instructive ruling. The court held that the matter turned on a discrete legal issue: What does the written sale agreement say about commission?

Upon examination of the agreement’s clauses, the court found:

• Clause 12.1 explicitly provided for commission to be paid to “VR Group trading as BA Real Estates.”
• Clauses 12.2–12.4 confirmed that payment would be made on registration of transfer, and that VGV was irrevocably instructed to withhold registration until funds were available for VR Group.
• Clause 11.2 was a standard “entire agreement” clause, stating that no other terms, warranties, or representations outside the contract would apply.

The court found no mention of Property Knight in the agreement. It held that any entitlement to commission could only arise from the terms of the contract — and where those terms were clear, they would be enforced.
Even though Bernard introduced the buyer, and even if he was the effective cause of the sale, this did not override the express written terms.

Intern Estate Agents and Regulatory Compliance

The judgment also raised serious concerns about the regulatory framework governing intern estate agents.

Bernard was, at the time, a registered intern under Property Knight. The Estate Agents Act, together with the 2008 Training Regulations (since replaced by the Property Practitioners Act), required that intern agents:

• Hold a valid fidelity fund certificate linked to a specific principal agency
• Work under the direct supervision of a fully qualified estate agent
• Not operate independently or under different entities unless properly authorised and certified

In this case, there was no evidence that Bernard held a fidelity fund certificate under VR Group. Yet, VR Group accepted the benefit of his efforts. The court expressed concern that Bernard and/or VR Group might have acted in breach of regulatory requirements, and therefore referred the matter to the Property Practitioners Regulatory Authority for investigation.

This is significant because commission may be legally withheld if an agent acts outside of their regulated scope — even if they do the work.

The Role of Interpleader Proceedings

When a stakeholder like a conveyancing attorney is uncertain about who should receive funds — for example, due to conflicting demands from estate agents — they may bring interpleader proceedings. In this case, VGV, the attorneys handling the transfer, brought an interpleader action to ensure that they paid the correct party and protected themselves from liability.

The court confirmed that this was the proper procedure and that VGV acted correctly in asking for clarity before releasing the funds.

Why This Case Matters

This judgment is highly instructive and offers key takeaways for multiple parties involved in property sales:

For Sellers:

Ensure the commission clause in your sale agreement reflects your true intentions. If you believe a particular agent deserves commission, that agent’s name must be expressly recorded in the contract.

For Estate Agents:

Your legal right to commission depends on the contract — not on your effort, not on verbal agreements, and not on your role in securing a buyer. If you are not named in the final written agreement, you have no legal entitlement to the commission paid by the seller or their attorneys.

For Interns and Principals:

Interns must act strictly within the legal and regulatory framework. Acting outside your authorised agency — even unintentionally — can result in your disqualification from earning commission and may invite sanctions.

For Conveyancing Attorneys:

When conflicting claims arise over commission or any other funds in trust, the safest and most responsible approach is to trigger interpleader proceedings and ask the court for direction.

Commission Rights Must Be Contractually Secure

Property Knight v Van Niekerk Groenewoud and Others serves as a cautionary tale: no matter how involved you were in the sale, if your name isn’t on the contract, you don’t have a claim.

The court made it clear that commission disputes must be resolved based on the written terms of the agreement, not on implied contributions or fairness. Estate agents must ensure that their role is properly documented — and sellers should be crystal clear about who they’re authorising to act on their behalf.

At VDM Attorneys, we assist buyers, sellers, and estate agencies with:

• Drafting clear, enforceable property sale agreements
• Handling commission disputes
• Representing clients in interpleader proceedings
• Advising on regulatory compliance for estate agents and intern agents

If you’re unsure of your commission rights, or you’re involved in a property transfer and facing legal uncertainty, our experienced property lawyers in Sandton are here to help. Let us protect your interests — before conflict arises.