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Agent Commission for Rental - Not disclosed

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  1. #1

    Agent Commission for Rental - Not disclosed

    I paid a deposit to lease a residential property last week. Today I was sent the official lease to sign along with a request to pay the balance of the first months rent.

    I was introduced to the property by a HK real estate agent but a no time up until I was emailed the lease yesterday did the agent mention that I must pay 1/2 months rent as commission to this agent.

    I have since done some research at it seems that the agent is supposed to have you sign a form which stated the agents relationship with the the landlord and the amount of commission, but this never happened.

    So my question is, legally am I required to pay this agent any commission in order to complete the lease with the landlord?

    Thanks


  2. #2

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    Quote Originally Posted by ilikeplanes:
    I paid a deposit to lease a residential property last week. Today I was sent the official lease to sign along with a request to pay the balance of the first months rent.

    I was introduced to the property by a HK real estate agent but a no time up until I was emailed the lease yesterday did the agent mention that I must pay 1/2 months rent as commission to this agent.
    And you didn't ask? It's common practice here though the commission is negotiable. You can still try that though it should normally be done before you go and view the properties.

    I have since done some research at it seems that the agent is supposed to have you sign a form which stated the agents relationship with the the landlord and the amount of commission, but this never happened.
    The form is required by law but not all agents go by the book, which can be to your advantage because if you have to sign it the form also ties you to the agent, meaning you cannot rent the same property via another agent that might offer the unit for less or asks a lower commission.

    Tip: If you are asked to sign the form negotiate the commission beforehand or have at least "NEGO" written on it.

    So my question is, legally am I required to pay this agent any commission in order to complete the lease with the landlord?
    Not sure about the legality but that the agent doesn't work for free should be obvious. I find it strange that you didn't ask or even inform yourself before starting apartment hunting.
    Anyway, if you want that particular unit I think you have to pay, unless you want to be drawn into a legal battle for, no offense intended, being ignorant on the matter.
    Last edited by Raccon; 27-05-2009 at 10:29 PM.

  3. #3

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    The normal practice is the agent's commission is one month's rental, split 50:50 between you and the landlord. The agent is not doing anything dodgy or out of the ordinary so I would put it down to a learning experience and pay up.


  4. #4

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    You should have expected the agent to earn a commission. HOWEVER, it is his burden to provide a document that you had knowledge and agreed to do so. I would double-check the lease to make sure there is nothing specified about commissions.

    A landlord would be foolish, and highly unlikely, to refuse renting to you because of an agent mishap.


  5. #5

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    Although this is common practice here in hk for the agent to get 50:50 commission from both the tenants and the landlord, it is quite un-expected from someone who comes from a country where this is un-heard of at all---I came from Australia for instance and only the landlord pays the commission(generally equates to one weeks rent plus 10%GST, then on-goingly a roughly 5.5% commission on the rent each month for the agent continuously looking after most affairs regarding the rental property). The landlord would've (most likely) signed an exclusive agency agreement with the agent which is valid for one to three months period. The agents there also work most diligently trying to find the best tenants on behalf of the landlord. But I have never found any tenant paying commission to the agent.

    I understand the OP won't feel good about this(who wants to incur more costs on top of an already crazy rent amount?). However, as someone pointed out, take it as a price to pay for being new to a place and sign the lease if you really like the apartment, after trying your best to negociate down the commission of course, on the ground that you were not made aware of this commission beforehand(good luck with it); otherwise go somewhere else and keep looking---however you'll find most likely that you cannot escape this commission wherever you go. Harsh reality, really...

    Welcome to HK, by the way.


  6. #6

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    as you didnt sign anything, it seems that legally you are not required to pay the commission.

    but morally, you should pay just to avoid bad feeling and a potential bad reputation if you decide to look for properties in the future. as mentioned, you shouldnt have expected the agent to work for free.


  7. #7

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    In HK, if you find the place through agent and you are required to pay the fee (50% of mthly rental from tenant). Unless you are direct deal with owner.


  8. #8

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    Quote Originally Posted by OZTOHK:
    Although this is common practice here in hk for the agent to get 50:50 commission from both the tenants and the landlord, it is quite un-expected from someone who comes from a country where this is un-heard of at all.
    This is exactly the point - in the UK too only the landlord pays (and why not? it's them trying to make the money on the rental!) so coming new here its not at all obvious why the OP should have asked in advance!

    I had agents show me flats in various places before I purchased the boat and had no idea that, had we gone with anything, I would have owed them money!

  9. #9

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    Quote Originally Posted by UK/HKboy:
    you shouldnt have expected the agent to work for free.
    Why the hell not? They do in numerous other countries where the landlord pays all the fees.

    All these comments of "you shouldn't have expected" are pretty patronising and unhelpful.

  10. #10

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    In my view, in different countries the law and regulation are might not be the same. The people who come from overseas and work in Hk are paying the LOW TAX here. Maybe they should also pay the same tax rates as UK to HK Gov. thought. Be fare!!


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