Forum: Review clause for lease renewal commissions in property agency agreements
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The Council for Estate Agencies (CEA) should review the “renewal commission” clause found in its prescribed Estate Agency Agreement for the Lease of Residential Property by a Landlord.
The CEA guidelines state that a property agent’s duties end after the landlord and tenant sign the tenancy agreement and the property is handed over. Yet, the standard agreement still includes an option for renewal commission – allowing agents to collect additional payment if the same tenant renews the lease in the future.
This seems inconsistent. Renewal takes place long after the original service is completed, and there is often no further work involved by the agent. More importantly, the clause does not specify what duties or responsibilities justify this renewal fee. This means agents may legally collect money without doing any new work.
If repeated or unjustified fees are considered unfair in other sectors – for example, the Ministry of Manpower prohibits maid agencies from charging repeat fees to employers or workers – then the same principle of fairness should apply here to protect landlords, most of whom are ordinary HDB flat owners.
CEA’s mandate includes consumer protection. It should ensure that commission structures are fair, transparent, and tied to actual services rendered.
Teo Kiong Ming
