Developers · Contracts · The Propah POV
What should a sales mandate agreement contain?
Twelve things. Most mandate agreements in the market cover four of them — the rate, the term, the project and the signature — and then the parties argue about the other eight for the rest of the engagement. The commission rate is the least important number in the document. The base it is calculated on, and the event that triggers it, decide far more.
The twelve
1. Exactly which inventory
Not “the project.” Specific units, identified by tower, floor and unit number, listed in a schedule. Ambiguity here is the most common source of dispute, because a developer’s best-selling units are the ones they most want to keep for direct sale, and an agent’s effort is worth nothing if the inventory can be quietly withdrawn.
2. What kind of exclusivity, in writing
Exclusive, semi-exclusive or open — these behave very differently, and the agreement must say which. Then the harder question, which most agreements dodge: what happens when the developer sells directly? If a walk-in buyer who saw the agent’s campaign closes at the site office, the answer needs to be in the document rather than in a conversation six months later.
3. A term with a review point
A term that is too short cannot produce results in a market with fifteen months of overhang. A term that is too long removes accountability. The workable structure is a defined term with a formal review at a stated interval, against stated metrics, with a defined consequence — not an open-ended arrangement and not a three-month cliff.
4. Price and discount authority
The published rate, the floor below which the agent cannot go, who can approve an exception, and how quickly. A mandate where every negotiation goes back to a promoter for approval will lose buyers to projects where it does not. A mandate where the agent can discount freely will discount freely. What a discount actually costs is worth reading before you set this clause.
Everyone negotiates the percentage. Almost nobody negotiates what the percentage is a percentage of.
5. The commission base, defined precisely
This is where money is actually won and lost. Is the commission calculated on the agreement value? Does it include or exclude car parking, club membership, maintenance deposits, floor rise and amenity charges? Is it before or after GST? A rate quoted on one base and paid on another can differ by a fifth. Both parties should be able to compute the same figure from the same booking form.
6. The trigger event, and the payment schedule
When does commission become earned, and when does it become payable? These are different questions and the agreement should answer both. A conservative developer position ties payment to registration of the sale deed and receipt of full consideration. A conservative agent position ties earning to the booking. The workable answer is usually staged — a proportion on booking and agreement, the balance on registration — with the treatment of cancellations stated explicitly rather than assumed.
7. Lead ownership and prospect registration
Who owns a lead, how a prospect is registered, and what happens when the same buyer appears through two channels. Without a registration mechanism and a stated tie-break, every close that matters becomes contested. The mechanism only has to be written down once; the arguments recur forever.
8. Marketing: spend, approval, and who owns the output
Who funds the campaign, who approves the creative, whose brand leads, and — the clause most often missing — who owns the leads, the creative and the data when the mandate ends. An agent who built a database on a developer’s project and a developer who paid for it will both believe it is theirs.
9. A tail period
If a buyer the agent introduced closes a month after the mandate ends, is commission payable? The standard protection is a defined tail period with a procedural condition: the agent submits a written list of registered prospects within a stated number of days of expiry, and commission is payable only on names appearing on that list. It protects the agent from being cut out and the developer from open-ended claims.
10. RERA compliance, and who indemnifies whom
Not optional and not a formality.
What the Act requires of an agent
- Section 9 requires a real estate agent to be registered with the Authority before facilitating a sale in a registered project. Karnataka issues an agent registration number; ask for it, and verify it.
- Section 10 sets the agent’s statutory functions: not to facilitate sale of an unregistered project, to maintain prescribed books and records, not to engage in unfair trade practices or misleading advertising, and to facilitate the allottee’s access to the information and documents they are entitled to at the time of booking.
- Section 62 provides a penalty for contravention of sections 9 or 10 of ₹10,000 for every day the default continues, capped at 5% of the cost of the plot, apartment or building.
The agreement should carry mutual indemnities: the agent for misrepresentation in the course of selling, the developer for the accuracy of the project information the agent is given to sell with. An agent can only represent what they are told.
11. Reporting, access and the numbers that get reported
A weekly cadence, agreed metrics, and CRM access rather than a summary deck. The metrics that matter are the funnel, not the outcome: leads received, leads contacted, site visits scheduled and completed, bookings, and bookings surviving loan sanction. A mandate that reports only bookings gives both parties no way to diagnose a problem before the term ends.
12. Termination, notice and bookings in flight
Notice period, grounds for termination with and without cause, and what happens to bookings that are made but not registered when the mandate ends. Add the handover mechanics — return of materials, transfer of lead data, final reconciliation, and the deadline for the tail-period list. Termination clauses are written when both parties are optimistic and read when neither is.
Two things that should not be in it
- The agent holding buyer money. Payments should move from buyer to developer directly, by banking channel. An agent holding earnest money creates a risk neither party needs and a regulatory exposure both should avoid.
- A guaranteed sale price or a guaranteed volume. A guarantee that cannot be honoured in a shifting market is a dispute with a delay built in. Commit to activity, process and reporting, which are within the agent’s control; do not commit to an outcome that is not.
What this does not cover
- No commission rates are given. Rates in Bengaluru primary sales vary with project, ticket size, exclusivity and inventory age, and we found no credible published benchmark. GST on brokerage services is charged separately from the commission rate.
- Section 9, 10 and 62 references are to the Real Estate (Regulation and Development) Act, 2016. State rules and Karnataka RERA’s procedural requirements sit on top of these and change.
- Drafting positions described here are commercial practice, not legal advice, and are written from an agency perspective.
- This is not a template. Have the agreement drafted or reviewed by an advocate acting for you.
What should a real estate sales mandate agreement include?
Twelve things: the exact inventory by unit number, the type of exclusivity and what happens on direct developer sales, a term with a formal review point, price and discount authority, a precisely defined commission base, the trigger event and payment schedule, lead ownership and prospect registration, marketing spend and data ownership, a tail period, RERA compliance and mutual indemnities, reporting cadence with funnel-level metrics and CRM access, and termination terms covering bookings in flight. Most agreements in the market cover four.
When should commission become payable to a sales agent?
The agreement should separate when commission is earned from when it is payable. A conservative developer position ties payment to registration of the sale deed and receipt of full consideration; a conservative agent position ties earning to the booking. In practice a staged structure works — a proportion on booking and agreement execution, the balance on registration — with the treatment of cancellations and refunds stated explicitly rather than left to be argued later.
Does a real estate agent need RERA registration in Karnataka?
Yes. Section 9 of the Real Estate (Regulation and Development) Act, 2016 requires a real estate agent to be registered with the Authority before facilitating the sale or purchase of a unit in a registered project. Section 10 sets out the agent's ongoing statutory functions, and section 62 provides a penalty for contravention of ₹10,000 for each day the default continues, capped at 5% of the cost of the plot, apartment or building. Ask any agent for their registration number and verify it before signing.
What is a tail period in a sales mandate?
A defined window after the mandate ends during which commission remains payable on buyers the agent introduced. It is normally conditional: the agent must submit a written list of registered prospects within a stated number of days of expiry, and commission is payable only on names on that list. It protects the agent from being cut out of a close that was substantially their work, and protects the developer from open-ended claims months after the engagement ended.
Should a sales mandate be exclusive?
It depends on what the inventory needs, but the agreement must state which arrangement applies rather than leaving it implied. Exclusive mandates concentrate accountability — one party owns the outcome and can be held to it. Open arrangements, where every firm holds the same inventory, tend to produce the least effort per firm, because each rationally works the project where they are most likely to close. The type of exclusivity should be a deliberate decision, not a default.
What is the difference between commission rate and commission base?
The rate is the percentage. The base is what that percentage is applied to — and it is where the money actually moves. Whether the base includes car parking, club membership, maintenance deposits, floor rise and amenity charges, and whether it is computed before or after GST, can change the payable amount by around a fifth on the same headline rate. Both parties should be able to calculate the same number from the same booking form without a conversation.
Who owns the leads when a mandate ends?
Whatever the agreement says — and if it says nothing, both parties will believe the data is theirs. The agent built the database; the developer usually funded the campaign that generated it. Address it in the marketing clause alongside who approves creative and whose brand leads, and settle the handover mechanics in the termination clause: what transfers, in what format, by when. It is a five-line clause that prevents a very common and very bitter dispute.
Should a sales agent hold buyer payments?
No. Buyer payments should move directly to the developer through banking channels, never through the agent. An agent holding earnest money or booking amounts creates custody risk neither party needs and regulatory exposure both should avoid, and it complicates every cancellation and refund. This should be stated positively in the agreement rather than left unaddressed — the same clause should confirm that no agent is authorised to collect on the developer's behalf.
Sections 9, 10 and 62 of the Real Estate (Regulation and Development) Act, 2016 checked against published texts of the Act in September 2026, including the section 62 penalty of ₹10,000 per day of default capped at 5% of the cost of the plot, apartment or building. Commercial drafting positions reflect market practice and our own agency perspective. No commission rates are cited because we found no credible published Bengaluru primary-sales benchmark. This is general commentary, not legal advice, and is not a template.
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The rate is the easy part.
Agree the base, the trigger and the tail before you agree the percentage, and the engagement will survive its first difficult month.
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