About Commission
10. Does the law say that the amount of commission should be 1% of the purchase price or half of a month’s rental?
The law has no stipulations on the amount or the rate of commission an estate agent is entitled to. It is subject to negotiation between you and your appointed estate agent.
11. If I am not satisfied with the service of the estate agent or the estate agent has not provided the services he promised, can I refuse to pay his commission?
An estate agency agreement is a legally binding document. Both sides should abide by it once they have signed it. If you are dissatisfied with the service of the agent, you may pass on your views to the agent’s company.
It is difficult to say categorically under what circumstances an agent has failed to fulfil his duties as set out in the estate agency agreement or has not delivered what he promised. You should seek legal advice on such matters. Commission disputes between consumers and estate agents are commercial in nature. Both sides can take civil action to resolve them or refer such disputes to the EAA for a binding decision under section 49 of the Estate Agents Ordinance.
12. Earlier I signed an estate agency agreement with Agent A and Agent A introduced a property to me. The property was subsequently bought by my wife/child/parent/sibling through Agent B. Can Agent A demand a payment of commission from me?
An estate agency agreement is a legally binding document. Both sides should abide by it once they have signed it. According to the estate agency agreement, you are liable to pay a commission to the estate agent if your spouse, any nominee, or your undisclosed principal or agent enters into a sale and purchase agreement with the vendor during the validity period of the agreement. That is, if the buyer is your child or parent or sibling, you would have to pay a commission if he/she is your nominee, undisclosed principal or agent.
13. If I view a property through Estate Agent A and enter into an estate agency agreement with him, but then purchase the property from the landlord direct, do I have to pay commission to the agent?
It is stipulated in item 5 of Schedule 3 of the
Estate Agency Agreement for Purchase of Residential Properties in Hong Kong (Form 4) that “the Purchaser is also liable to pay commission to the Agent for services rendered with regard to the property concerned if the Purchaser or the spouse, or any nominee, undisclosed principal or agent of the Purchaser enters into a binding agreement for sale and purchase with the vendor of any one or more of the Properties during the Validity Period, whether through the Agent or otherwise.”
In other words, even if you purchase the property direct from the landlord, as long as the purchase is made during the validity period of the agreement, you are legally obliged to pay commission to your appointed estate agent.
