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Protect yourself in rental transactions

If you are engaging a property agent to facilitate your rental transaction, use one of CEA's prescribed estate agency agreements as a contract with your agent.

Whether you’re a landlord or a tenant, sticky situations could arise if you didn’t iron out or agree on certain terms with your property agent before signing a lease.

One scenario could be a dispute with your property agent on what his duties and obligations are. Another could be misunderstandings on the payment of commission, both for the first transaction and for subsequent lease renewals.

So how can you protect yourself?

Use the prescribed estate agency agreement when engaging an agent

If you have decided to engage a property agent to facilitate your rental transaction, use one of CEA’s prescribed estate agency agreements to formalise your contract with the agent.

The agreement will serve as a binding contract between yourself and the property agency for the performance of estate agency work.

It sets out clearly the agent’s scope and duties, as well as the terms and conditions involved. This will help minimise potential misunderstandings or conflicts that may arise during the rental transaction.

The agreement stipulates the following:

  1. What the property agency and agent’s duties are

    You have a clear idea of what the property agency and agent are supposed to do when facilitating your rental transaction.

  2. Whether there’s any potential conflict of interest

    The property agency and agent must declare to you in writing whether there is any potential conflict of interest ahead of the transaction.

  3. How much the commission amount is

    After negotiating the commission amount with the agent, document this in the agreement. You should also check if GST is included in the commission amount. Remember, you should pay the agency, not the agent.

  4. When to pay or not pay commission

    The agreement sets out various scenarios of when commission is payable. For instance, it states that you are not obliged to pay commission to the agency if the transaction falls through without any fault on your part. You can also indicate whether you are liable to pay further commission to the agency when the lease is renewed.

  5. The property agency and agent must go for dispute resolution if you ask for it

    Signing CEA’s prescribed EAAs enables you to use CEA's Dispute Resolution Scheme when you encounter any subsequent contractual disputes with your property agency and agent. You can choose to go for mediation or arbitration through centres approved by CEA.

Breaking down the components of a rental estate agency agreement

Note: There are two types of agreements: exclusive and non-exclusive. You can choose the type of agreement based on your needs and preferences.