Property Agent's Commission on Extending a Lease

Hi Mr. Tan,

I like to seek your advice on the commission payable to the property agent for extending a lease.

Two years ago, I leased out my apartment through an agent. The agent charged me 1 month of rental, which was a lot of money.

I am now negotiating with my tenant to extend the lease. I was shocked to find that the property agent had included in the lease agreement (without my knowledge) a clause that requires me to pay commission for extending the lease.

I have never agreed to this condition. Am I required to pay this commission? In my case, the agent provided bad service to me and the tenant during the past two years. Why should I continue to pay commission again?

I hope that you can advise me.

REPLY

I understand that the standard tenancy agreement does not have this clause. It seems that some property agent inserted the clause to give them additional income, but it is unfair to the owner.

I suggest that you negotiate a new agreement with the tenant. You can agree with the tenant on whether any commission is to be paid to the agent, and which party is required to pay the commission. Quite likely, the tenant will prefer to deal directly with you, and avoid this additional cost.

As you do not have any agreement with the agent on this matter, you are not bound by the terms of the old tenancy agreement, as it has been superceded.

I hope that you find this to be helpful. As this is a legal matter, you may wish to get the opinion of a lawyer as well.