I want to lease out a residential property

According to the legal requirements³, when licensed estate agents are entrusted by clients to lease out residential properties, they must enter into and explain the legally prescribed “Estate Agency Agreement” (Form 5, commonly known as the “Listing Agreement”) with their clients. The Agreement, which must be concluded

1. within 7 working days after receiving the instruction to lease the residential property; 
2. before any advertisement is placed for the property; or
3. before the tenancy agreement for the property is signed — whichever occurs earliest, should specify the main terms of appointment, such as the validity period, the form of appointment, and the commission payable, with an aim to enhance transparency in transactions and protects the interests of both parties.

The “Estate Agency Agreement” is legally binding, and once signed by both parties, they must comply with the terms stated in the Agreement. Additionally, the estate agent must provide the landlord with a signed original or copy of the “Estate Agency Agreement” immediately after signing. If a client wishes to modify the terms of the “Estate Agency Agreement” or cancel the appointment after the Agreement has been entered into, the client must obtain the consent and signature of the other party to the Agreement (i.e., the estate agency company).

Landlords can discuss with the agent the type of engagement, which can be “single agency”, “dual agency” or “potential dual agency”; also in the case of dual agency or potential dual agency, the amount or rate of commission charged by the agent to both parties, etc.

Single Agency: Acting solely for the landlord

Advantages of “Single Agency”:

• Strong focus: The agent represents only one party, minimising conflicts of interest.
• Building trust: The agent focuses solely on the landlord's requirements and interests, fostering mutual trust and cooperation.

Dual Agency: Acting for both the landlord and the tenant

Advantages of “Dual Agency”:

• Facilitating transactions: The agent represents both parties, facilitating a quicker coordination with both parties’ needs and conditions to expedite the transaction process.
• Minimising miscommunication: The agent understands the intent of both parties, helping resolve communication issues and avoid misunderstandings.

The amount or rate of commission is determined through mutual agreement between the client and the estate agent⁴.

Consumers should pay the commission to their agent according to the agreement between the consumers and the agent and the terms specified in the prescribed Estate Agency Agreement: namely, upon signing of the agreement for sale and purchase or upon completion of the transaction in a sale and purchase situation; or upon signing of the lease or commencement of the tenancy as specified in the binding lease in a leasing situation. However, the client shall have no obligation to pay any commission to the agent if completion of the property transaction/commencement of a binding lease falls through without fault on the part of the client. The commission shall become payable to the agent in the case of mutual cancellation of a binding agreement for sale and purchase/binding lease of the concerned property between the vendor and purchaser/landlord and tenant not arising from any provisions of the agreement for sale and purchase/lease.

A licensed estate agent shall retain a copy of the receipt for not less than 3 years after it is issued.