Agent fees for renting - double charging??

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alaxanderl
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Agent fees for renting - double charging??

Post by alaxanderl » Mon, 07 Mar 2016 9:58 pm

My niece is in the process of renting a room. She has to pay the agent fees to the agent she found online but after meeting the landlord, the landlord disclosed that he’s also paying the agent fees to another agent (who is also the husband of my niece’s agent). The two agents are husband and wife doing a co-broking. In this scenario, does it count as double-charging and if the agents are against the law to charge from both sides? Just to make sure that the consumers' rights and interest is not violated. Thanks for your clarification.

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Re: Agent fees for renting - double charging??

Post by JR8 » Mon, 07 Mar 2016 11:18 pm

I don't recall the law re: flatshares, but there seems to be a clear conflict of interest being formed. For example, if your niece has a problem with the landlord, despite being expected to pay two agents, which one might represent her interests?
With a 'co-broke' type of situation I'm used to an agent that you instructed to be paid by you. I.e. if the landlord chose to instruct an agent to represent himself, that's on his account; what would be the grounds for the tenant funding that? Plus the husband+wife double-act, how might that pan out when she eventually chooses to leave and perhaps has a fight to get her deposit back - who is fighting in her corner?

Did she sign a contract with the LL's agent (as well as her own)? If not on what basis is she bound to pay him?
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Re: Agent fees for renting - double charging??

Post by x9200 » Tue, 08 Mar 2016 3:21 am

Has she found a place by herself and contacted the agent who advertised this specific flat online, or she contacted an agent who found that flat for her?

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Re: Agent fees for renting - double charging??

Post by alaxanderl » Tue, 08 Mar 2016 10:23 am

Hi JR8 and x9200, thanks heaps for your replies. I helped my niece contact the agent from the listed room for rent and she followed up with the agent to view the flat (say agent A). As usual, we expected to pay the agent's fees at the start. When she was at the flat, the landlord revealed that he would pay his agent's fees also from his side to another agent (say agent B, who is the husband of agent A). Agent A explained that it's called co-broking. In my past few experiences of renting a room, in one scenario I paid the agent's fees, in my second experience the landlord paid the agent's fees. It seems that only one party has to pay. In my niece's current scenario, I want to make sure that what the couple agents did is not manipulation both to the tenant as well as the landlord to have both sides paid to them.

I also came across the following comment below. Hope to be enlightened more on this. Thank you so much!!
AngMoG wrote:I just want to point out again for everyone's benefit: If the agent represents the owner, he cannot charge you agent's fee. The owner must pay him. That is the law now, since 2011 (I think).

If he does try to double charge, that is illegal. You should point that out and report him to CEA if he does not relent. It does not matter whether it is a room, an HDB or a condo.
http://forum.singaporeexpats.com/viewtopic.php?t=98778

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Re: Agent fees for renting - double charging??

Post by x9200 » Tue, 08 Mar 2016 11:07 am

alaxanderl wrote:I helped my niece contact the agent from the listed room for rent and she followed up with the agent to view the flat (say agent A).
Your niece should pay no agent's fee as she found the flat by herself, with your help perhaps, but not with the help of the agent so what is it she is going to pay for? Tell this to the agent and if he/she insists propose to contact CEA - Council for Estate Agencies to solve the problem if they still see any.

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Re: Agent fees for renting - double charging??

Post by sundaymorningstaple » Tue, 08 Mar 2016 1:17 pm

If co-broking, each Tenant & Leasee should only pay 50% of the fee or 1/2 month's rent each if I'm not mistaken.

Definitions of Co-broke on the Web: When brokers are working on a 'co-broke' basis, they are sharing exclusive listings with each other. In a co-broke transaction, one broker will represent the buyer or renter, while the other will represent the owner of the property. The commission is usually split 50/50.
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Re: Agent fees for renting - double charging??

Post by alaxanderl » Tue, 08 Mar 2016 10:10 pm

Hi all, thank you for taking the time to share your views and resources. So, I went to CEA's website and found a relevant info, quote "FAQ: If one of our salespersons act and collect a fee from the tenant/buyer, can another one of our salespersons act and collect a fee from the landlord/seller?
Answ: If the salesperson collects a fee from the tenant/buyer and also collects part of the fee from the landlord/seller, it will be a case of dual representation and is an offence under the Act. However, if the landlord/seller is represented by another salesperson, it will not be considered dual representation if neither of the two salespersons collect/share commission from both landlord/seller as well as tenant/buyer, even if the two salespersons are from the same estate agent. If the tenant’s/buyer’s salesperson and the landlord’s/seller’s salesperson are from the same estate agent, they are required to declare this fact in writing to their respective clients and obtain their client’s consent to continue to act for the client. Further, if either salesperson is collecting an overriding fee from the other salesperson’s commission, this must also be disclosed in writing by the receiving salesperson to his client as a potential conflict of interest." Ref. http://www.ifaq.gov.sg/CEA/apps/fcd_faq ... #FAQ_42476
From CEA's quote above, "if the landlord/seller is represented by another salesperson, it will not be considered dual representation if neither of the two salespersons collect/share commission from both landlord/seller as well as tenant/buyer, even if the two salespersons are from the same estate agent" - how to reconcile this when applied to my niece's case when the 2 agents are co-broking (landlord paid agent's fee to his agent and my niece paid agent's fee separately to her agent found online). Is this a loophole that the 2 agents (who are husband and wife) are taking advantage of?

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Re: Agent fees for renting - double charging??

Post by alaxanderl » Tue, 08 Mar 2016 10:12 pm

PS. Also, in my niece's case, the 2 agents did not declare in writing as per required by law based on CEA's info above.

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Re: Agent fees for renting - double charging??

Post by rarkins » Thu, 10 Mar 2016 1:04 pm

This seems like a deliberate tactic to extract maximum commission from a listing, but it's hard to know if it's against CEA rules. Although in this case it's apparently a husband/wife team, I wouldn't be surprised to hear that it's a common tactic by agencies too, considering that you can have two agents from the same agency represent landlord and tenant.

i.e. by having the wife advertise the listing instead of the husband, that's a deliberate strategy to double commission

In this scenario, both the tenant and the landlord are somewhat taken disadvantage of. If the husband had listed the apartment for rent then your niece would have avoided the agent fee. But, you could argue that nobody forced your niece to take that room, she could take others, etc etc. On the other hand, I think the landlord has potentially been more disadvantaged and not had his agent represent his best interests. i.e. if the landlord's agent didn't advertise himself and/or they lost potential tenants because other agents couldn't co-broke then the landlord didn't necessarily get the best or fastest offer.

The easiest solution would seem to be to have the landlord and tenant raise it to the CEA. Of particular interest would be if the husband made any attempt to advertise it himself, or if only the wife did. Of course, mentioning this to the agent(s) could result in one half the fee being waived, but be careful they don't accuse you/her of extortion.

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Re: Agent fees for renting - double charging??

Post by ecureilx » Thu, 10 Mar 2016 1:42 pm

alaxanderl wrote:Hi all, thank you for taking the time to share your views and resources. So, I went to CEA's website..
Alas, unlike LTA and such, CEA doesn't investigate anonymous complaints.

Complaints must be in detail including the details of the affected parties, for them to investigate or sanction any agent.

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