Thursday, December 30, 2010

283. Common problems of the first-time Singapore Landlord

COMMON PROBLEMS OF THE FIRST-TIME SINGAPORE LANDLORD

E-MAIL TO DR SING DEC 31, 2010

Hi Dr Sing,

Thanks for the advice given on your web page (www.asiahomes.com), I am sure it has benefited a lot of people. I hope you can help advise me on my situation.

I am a first time landlord. My agent just told me that my new tenant has decided to break the lease barely 1 month into the contract. The reason being his company is not properly registered here hence he has to return to his home country.

Pls advise:
1. I have already paid the 1 month commission to the agent. Should the agent return me the pro rata commission since the lease has not been fulfilled to 2 years

2. The co-broke agent has been demanding his share of the commission, saying that I have already forfeited the tenant's 2 month's deposit, so he is entitled to it. I feel he does not deserve to be paid since he did not conduct his due diligence on the tenant hence causing unnecessary inconvenience to me.

3. My own agent took the full month's commission and said that I still need to pay commission if she finds me another tenant. All in I have to pay 2 month's commission through no fault of mine. Is this the norm or am I taken for a ride?

4. How do I recover compensation from the tenant? My agent advise me against it citing that it is difficult to do so since the tenant can easily return to his home country. She advises that u let things be and just pay up the commission and look for another tenant and thus incur another commission. I feel she is not acting in my interest.

5. The co broke agent refused to return me the keys, access cards and transponder unless he gets his commission. Does he have a right to? What recourse do I have.

Thank you so much for your time and I hope to hear from you soon.

Regards,
Ms Ang

Sent from my iPhone




In reply, see CAPITAL LETTERS BELOW

On Thu, Dec 30, 2010 at 7:59 PM, Orange Whale wrote:

Hi Dr Sing,

Thanks for the advice given on your web page, I am sure it has benefited a lot of people. I hope you can help advise me on my situation.

I am a first time landlord. My agent just told me that my new tenant has decided to break the lease barely 1 month into the contract. The reason being his company is not properly registered here hence he has to return to his home country.

Pls advise:
1. I have already paid the 1 month commission to the agent. Should the agent return me the pro rata commission since the lease has not been fulfilled to 2 years


THIS DEPENDS ON THE TERMS AND CONDITIONS OF THE COMMISSION AGREEMENT. I PRESUME YOU HAVE ONE. IF NOT, MUCH DEPENDS ON NEGOTIATION.


2. The co-broke agent has been demanding his share of the commission, saying that I have already forfeited the tenant's 2 month's deposit, so he is entitled to it. I feel he does not deserve to be paid since he did not conduct his due diligence on the tenant hence causing unnecessary inconvenience to me.



CO-BROKE AGENT? IS HE YOUR AGENT OR NOT? NORMALLY A LANDLORD HAS ONLY ONE AGENT TO ACT FOR HIM.


3. My own agent took the full month's commission and said that I still need to pay commission if she finds me another tenant. All in I have to pay 2 month's commission through no fault of mine. Is this the norm or am I taken for a ride?


IN REAL ESTATE, MUCH DEPENDS ON THE WRITTEN COMMISSION AGREEMENT OR CONTRACT OF REAL ESTATE. IN SOME AGREEMENTS, THE LANDLORD GETS BACK THE AGENCY COMMISSION PRO-RATED IF THE TENANCY IS TERMINATED PREMATURELY. IN OTHERS, NOTHING IS STATED AND THIS IS WHERE THE LANDLORD HAS PROBLEMS.


4. How do I recover compensation from the tenant? My agent advise me against it citing that it is difficult to do so since the tenant can easily return to his home country.


YOU NEED A GOOD LAWYER TO ACT FOR YOU FOR BREACH OF TENANCY AGREEMENT. IF THE TENANT RETURNS HOME, YOUR LAWYER CAN STILL SUE HIM ON YOUR BEHALF VIA THE COUNTRY'S LAWYER.

IF THE TENANT IS LEAVING THE COUNTRY, HE CAN PROVIDE DOCUMENTARY PROOF.


She advises that u let things be and just pay up the commission and look for another tenant and thus incur another commission. I feel she is not acting in my interest.


THE CEA (COUNCIL OF ESTATE AGENTS) HAS JUST BEEN FORMED IN NOV 2010 TO ADDRESS YOUR CONCERNS AND COMPLAINTS AGAINST THE PRACTICE OF HOUSING AGENTS. YOU MAY WISH TO CONTACT CEA AT 5TH FLOOR HDB HUB.


5. The co broke agent refused to return me the keys, access cards and transponder unless he gets his commission. Does he have a right to? What recourse do I have.


IS THERE A COMMISSION AGREEMENT YOU SIGNED WITH THE CO-BROKE AGENT? HAVE YOU BREACHED THE TERMS AND CONDITIONS OF THIS AGREEMENT? YOU CAN SEEK ADVICE FROM HIS HOUSING AGENCY AND/OR CONTACT THE CEA.


Thank you so much for your time and I hope to hear from you soon.


IN YOUR SITUATION, THE TENANCY AGREEMENT HAS BEEN SIGNED AND THEREFORE THE AGENTS HAVE COMPLETED THEIR TASKS. AS TO THE RETURN OF AGENCY COMMISSION ON A PRO-RATED BASIS, MUCH DEPENDS ON THE TERMS AND CONDITIONS OF THE COMMISSION AGREEMENT.

YOUR RECOVERY OF 2 MONTHS' RENTAL DEPOSIT FROM THE TENANT IS FOR BREACH OF TENANCY AGREEMENT.

THEREFORE THIS MATTER OF LOSS OF RENTAL INCOME AS CONTRASTED TO NOT PAYING THE CO-BROKE AGENT AND RECOVERY OF PRO-RATED COMMISSION FROM THE MAIN AGENT IS A SEPARATE ISSUE AS THERE ARE TWO SEPARATE CONTRACTS (tenancy agreement and commission payment agreement). If you agree to pay commission on securing of the tenancy (signing of the tenancy agreement) and have not stated on return of pro-rated commission on premature termination of the tenancy agreement, you will need to consider whether you need a lawyer to act for you. I am not a lawyer and so the above is free advice. I will advise you consult a good lawyer to act for you. Best wishes.

The written contract is usually the main document which the lawyers and judges will refer to.

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