Agency Agreement for the Lease of an HDB Flat

[Mary Lee]

I need to rent out my HDB flat, and my agent put an additonal clause in the Agency Agreement as follows:-

"Should any Deposit paid by the Tenant be forfeited by the Landlord then one half the forfeited sum shall be paid to the Estate Agent, provided such amount did not exceed the commission."

Is this reasonable? Can I sign it?

Many thanks in advance for any advice from the Mentors in this forum.

[eng81157]

I need to rent out my HDB flat, and my agent put an additonal clause in the Agency Agreement as follows:-

"Should any Deposit paid by the Tenant be forfeited by the Landlord then one half the forfeited sum shall be paid to the Estate Agent, provided such amount did not exceed the commission."

Is this reasonable? Can I sign it?

Many thanks in advance for any advice from the Mentors in this forum.

i think the english abit fail. firstly, if the place is rented out successfully, you would pay commission. in the scenario the deposit is forfeited for whatever reasons, any amount (even a single cent) would have exceeded the commission.

secondly, if the deposit is forfeited before the tenants move in, you don't pay the agent commission but merely share half of the forfeited amount with him. what is the likelihood of this happening?

you may want to confirm if the clause describes the latter

[Mary Lee]

i think the english abit fail. firstly, if the place is rented out successfully, you would pay commission. in the scenario the deposit is forfeited for whatever reasons, any amount (even a single cent) would have exceeded the commission.

secondly, if the deposit is forfeited before the tenants move in, you don't pay the agent commission but merely share half of the forfeited amount with him. what is the likelihood of this happening?

you may want to confirm if the clause describes the latter

Thanks for pointing this out. I will ask the agent to further explain this clause.

[teddybear]

I think it is reasonable only if this clause is specific and only applies to the initial period if the tenant back out before even moving in after signing TA. After tenant moved in, this clause not acceptable.

I need to rent out my HDB flat, and my agent put an additonal clause in the Agency Agreement as follows:-

"Should any Deposit paid by the Tenant be forfeited by the Landlord then one half the forfeited sum shall be paid to the Estate Agent, provided such amount did not exceed the commission."

Is this reasonable? Can I sign it?

Many thanks in advance for any advice from the Mentors in this forum.

[Mary Lee]

I think it is reasonable only if this clause is specific and only applies to the initial period if the tenant back out before even moving in after signing TA. After tenant moved in, this clause not acceptable.

Thanks teddybear. I think I get what you mean.

1. If the tenant backs out before moving in, the deposit he paid will be forfeited by the landlord; and in this case the agent deserves half of the forfeited sum for his work done to find this tenant. The agent will need to put more efforts to find another tenant to get his commission.

2. After the tenant moves in, if he breaches the Tenancy Agreement (e.g. damaging electrical appliances etc), the deposit he paid or any part of it will be used to make up the losses of the landlord; and in this case it is not reasonable for the agent to take any part of the forfeited sum.

Is my understanding correct?

If so, I will ask the agent to rephrase the clause.

[teddybear]

Yes you are absolutely right!

Thanks teddybear. I think I get what you mean.

1. If the tenant backs out before moving in, the deposit he paid will be forfeited by the landlord; and in this case the agent deserves half of the forfeited sum for his work done to find this tenant. The agent will need to put more efforts to find another tenant to get his commission.

2. After the tenant moves in, if he breaches the Tenancy Agreement (e.g. damaging electrical appliances etc), the deposit he paid or any part of it will be used to make up the losses of the landlord; and in this case it is not reasonable for the agent to take any part of the forfeited sum.

Is my understanding correct?

If so, I will ask the agent to rephrase the clause.

[Mary Lee]

Yes you are absolutely right!

Thanks for your enlightenment.

I am also wondering if it is a common clause for an agency agreement.

[proud owner]

Thanks for your enlightenment.

I am also wondering if it is a common clause for an agency agreement.

it is the industry practice .. it is only right

it applies to sale and purchase too ...

if option not exercised ... the seller wud share the 1 pct deposit with agent .. 50/50

[Mary Lee]

it is the industry practice .. it is only right

it applies to sale and purchase too ...

if option not exercised ... the seller wud share the 1 pct deposit with agent .. 50/50

I see. Thanks a lot.

I am a first-timer, so need to check with you Mentors and get everything right.

Have a nice day.