FAQs

Useful answers to questions about property transactions and estate agents’ services frequently asked by consumers.

About Estate Agency Agreement

4. Do I, as a landlord, property owner, prospective buyer or prospective tenant of a residential property, have to sign an estate agency agreement?
Under the Estate Agents Ordinance, estate agents are required to sign an estate agency agreement with their clients when being appointed to buy, sell or lease a residential property.

The EAA encourages consumers to sign the estate agency agreement with the estate agent as the agreement will state clearly key terms of the appointment such as the validity period of the agreement, the agency relationship and the amount of the commission. Doing so will enhance the transparency of the transaction and help protect the interests of both parties.

5. Does the law have any provisions as regards the validity period of the appointment of an agent? Can it be shorter than three months? As a purchaser, if I am not satisfied with the service of Estate Agent A, can I unilaterally shorten the validity period and purchase the property which was introduced to me by Estate Agent A through another estate agency?
It is recommended in the Estate Agency Agreement for Purchase of Residential Properties in Hong Kong (Form 4) that the validity period should not be more than three months. However, there is no provision in the Estate Agents Ordinance as regards the validity period and the duration of which is subject to negotiation between you and your agent.

The EAA would like to remind consumers that the validity period is an important term in an agreement. Therefore, they should not put down “until further notice” as the expiry date of the validity period. Instead, the commencement and expiry dates of the agreement should be clearly stated.

Regarding whether the validity period can be shortened, an estate agency agreement is a legally binding document, so if you wish to amend any clauses in the agreement (e.g. the validity period), you must obtain the consent of the other party: that is, the estate agency.

If the estate agency disagrees with cutting short the validity period, you are advised to seek legal advice for a solution. You should not, without seeking legal advice, purchase the property through another estate agency when the agreement is still valid, as you may have to pay commission to both estate agencies as a result.

6. I am planning to sell a property and earlier appointed an estate agency as the exclusive agency to help me sell it. However, I would now like to appoint another agency. Can I cancel my earlier appointment?
Estate agency agreements are legally binding documents. If you would like to amend any clauses in the agreement or cancel the agreement, you must obtain the consent of the other party, that is, the estate agency.

If the estate agency does not agree to cancel the exclusive agreement, you should seek legal advice on the way forward. You should not sell your property through another estate agency prior to the expiry of the agreement and without seeking legal advice, as you may have to pay commission to both estate agencies as a result.

7. 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.

8. If I appoint an estate agency as the exclusive agency to sell my property, but eventually sell the property to my neighbour direct, do I need to pay commission to the estate agency?
As stipulated in Schedule 4 of the Estate Agency Agreement for Sale of Residential Properties in Hong Kong (Form 3), if the vendor has appointed an estate agency as the exclusive agency, but sells the property through another estate agency during the validity period, his exclusive agency has a right to claim commission from him.

However, if you sell the property to the purchaser direct instead of your exclusive agency or another estate agency, you do not need to pay commission to your exclusive agency.

9. I am planning to purchase a residential property through an estate agent. Before I enter into a provisional agreement for sale and purchase with the landlord, what documents or information should the agent provide me with?
Prior to signing a provisional agreement for sale and purchase with the landlord, your appointed estate agency practitioner should have provided you with a Property Information Form (i.e. Form 1 as stipulated in the Estate Agents Ordinance), unless you have specially waived your right to receive it; and a copy of the latest land search record.

Information listed in the Property Information Form includes ownership, subsisting encumbrances (if any), the floor area, year of completion and user restrictions of the property.

The EAA also encourages consumers to obtain from the agent a copy of all the documents they have signed.