Ruthless Real Estate Agents

I am writing this post with the intent to help those people who are perpetually being harassed and taken advantage of by ruthless agents. I've been searching forums and sites these past few days trying to find answers to my questions until I finally contacted the Council for Estate Agencies to shed light on our concerns.

The thing is our rental contract expires next month and we were looking at our options on whether to move to a new place or renew our contract. As you may know, rental in Singapore costs an arm and a leg. Rental prices have doubled since I first came here 4+ years ago. So we had to weigh the pros and cons of moving as opposed to staying.

Anyway, to cut the story short, we negotiated directly with our landlord on renewing our contract. Luckily, he agreed on a price that we felt was reasonable. It is slighty above our budget as there are only 3 of us sharing a 3 bedroom apartment (with the 3rd room as spare for family/friends) but with the soaring prices of rental (aside from other incidental costs such as hiring a mover, paying agents fees, etc) we thought it was a good deal.

Lo and behold, but not surprisingly, our agent appears out of nowhere saying we need to let him know if we want to renew so he can inform the owner, etc etc. This was already after we had informed the owner and agreed on the rental price for renewal (the owner's agent probably contacted our agent to hint him that we were renewing). Obviously he wanted to make it appear as if he helped us negotiate so we could pay him agent's fee - which I think is absolutely ridiculous as he did nothing! In fact, when we were still new in our place there was a time I needed him to contact the owner to fix something in the house and he couldn't be bothered to help - saying the owner was busy and other bullcrap. In the end, I contacted the owner myself and he turned out to be very helpful and nice. We haven't heard from the mothaf@#%er agent eversince until lately.

So we were bound to find a way not to engage this ruthless agent. Thus, I sent the email below to CEA: (posted in verbatim)

On Jul 11, 2011, at 12:35 PM, <feedback@cea.gov.sg> wrote:

Dear Christian Abellaneda,

CEA will not fix the commission rates charged by salespersons as the absence of commission guidelines would lead to a more competitive pricing among the estate agents. Consumers are advised to find out the different commission rates and they can negotiate the commission rate before engaging an estate agent

Salesperson should only collect commission from whoever the party he represent for. He should not be collecting commission from landlord and tenant in a transaction which will constitute to dual representation, Please check your previous tenancy agreement / commission agreement contracts if there were any renewal clause for commissions. If there are no renewal clause for commission indicated in the contract, then the landlord and the tenants may represent themselves in the transaction and need not engage a salesperson service.

Best Regards
Sirajdeen
CEA

Christian Abellaneda 10 Jul, 2011 01:11 PM

To CEA feedback/CEA/SINGOV@SINGOV Subject Renewal of Condo Rental - Agents Commission

To Whom It May Concern, 
We would like to know if there is any official rule on payment of agents commission. Our 2 yr rental contract has expired and we had spoken to the owner to renew directly with him. However, the agent is now coming into the picture to ask for agents fee. Our rent for the renewal has increased to above 2.5k and I understand for rent above 2.5k the owner will have to bear the agents fee? Is there any official ruling on this? If we choose to renew directly with the owner shouldn't the agents not be entitled to any commission anymore either from tenant or agent? 
We appreciate your response as we dont seem to find any official government website or agency regarding private condo rental  in singapore. 
Looking foward to your response to all our queries. 
Many thanks, 
Christian Abellaneda 

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I'm not sure how it is in other countries, but in Singapore there is usually 1 agent for the tenant and another agent for the owner - which I guess makes sense as it protects both the interest of the owner and the tenant in any case of disputes. The downside is both parties pay commission (agent1 to owner and agent2 to tenant). However, for cases of renewal (as mentioned above), if there is no renewal clause, the owner and tenant may decide to represent themselves. BINGO! 

Now the thing is we DID sign a renewal clause (which was a separate contract cleverly prepared by the agent's company). BUT the good thing is the agent no longer works for his previous company, which means the contract is no longer binding. Plus we spoke to another filipina agent friend and she said if we do decide to have an agent represent us, we can choose another agent (which she says is a normal occurence when tenant/owner is not happy with the agent).

Anyway, my cousin spoke to the owner's agent and told him we were not engaging an agent and we were representing ourselves. Now this is where the owner's agent gets cocky, threatening us that if we don't engage an agent he will rent out our place to other people, that we need an agent as witness for contract signing, that we need an agent for the stamp duties from IRAS, and other crap. Of course none of this was true. Good thing my cousin was firm. So next week, we will finally renew our contract - with no DAMN agent.

Take note of these tips:

1. Make sure to read all the clauses in your rental contract. Especially clauses on renewal.  (I will never sign any renewal clause again) 
2. Ensure your rental contract has a clause on repairs above $100/$150 to be absorbed by owner. I have a lot of friends who pay for maintenance expenses on their own because the owner refuses to shoulder them.
3. You can work out the stamp duties on your own for the rental contract. Check IRAS website.
4. When signing the contract, your witness doesn't have to be an agent. It can be your cat or dog. (Haha kidding). Any human being can be your witness.
5. The agent can only collect commission from either owner or tenant but not both. Get gst-registered receipts for all monetary transactions.
6. Commission is usually 1/2month for 1 yr-contract and 1 month for 2 yrs. Rent above $2500 (or is it above $3000 now?) is usually shouldered by the owner. As mentioned by CEA, there is NO official ruling on this but this has been the industry standard.
7. If you are in good terms with your owner/landlord, both parties can represent themselves for renewal. (which is also what we did in our previous apartment)
8. Don't be gullible and easily fall for these shameless agents. What they tell you is not necessarily true. Do your own research. (Of course not all agents are pricks, choose wisely.)

Hope this helps! :-)
P.S. CEA actually is an official government body formed to regulate real estate agencies. I stand corrected.