Sale and Purchase of Property
(Real Estate)
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2. As a vendor, must I sign an estate agency agreement when I ask an agent to help me sell my flat?

In accordance with section 45 of the Estate Agents Ordinance (Cap. 511 of the Laws of Hong Kong), you and your agent must sign an agency agreement before you sell a residential property. Otherwise, the agent cannot serve you.

The Estate Agency Agreement for Sale of Residential Properties in Hong Kong (Form 3) is designed for Vendors . This agreement is provided by the Estate Agents Authority in accordance with the Estate Agents Ordinance. It must be duly signed by you and your estate agent.

The items contained in this agency agreement include: the duties of the agent, the commission payable by the vendor and the validity period of that agreement, etc.

You can use the services of more than one agent in respect of the same flat if you want to. However, you are reminded NOT to state that the agent is your exclusive agent in any agency agreement if you want 2 or more agents to help you. Otherwise, you will also have to pay the exclusive agent a commission even if you sell your flat through another agent (i.e. you would have to pay commission to both agents).

You can download "Form 3" from the Estate Agents Authority's webpage. You should read this agreement carefully before you sign it.  If you do not understand any part of it, ask the agent or your solicitor. You should ask your agent to give you a copy of the agreement you have signed. You should also keep the agreement in a safe place for future reference if needed.

In addition to the estate agency agreement, you and your agent must also sign a Property Information Form, which contains details of your property (e.g. the floor area, any mortgage outstanding, or any repairing order issued by government authorities). You should, to the best of your knowledge, give correct information to your agent. Your agent should also endeavour to check the accuracy of any information regarding your property. If false information has been provided to a purchaser which resulted in any loss to him, you and/or your agent will be liable to be sued by the purchaser for compensation.

The estate agency agreement aims to provide protection to residential property owners who are mostly persons without much legal knowledge of property transactions. If you want to sell a non-residential property (such as commercial or industrial property) through an agent without signing an estate agency agreement, you still have protection from the statute laws of Hong Kong (e.g. the Estate Agents Ordinance), the regulations imposed by the Estate Agents Authority (e.g. the Code of Ethics), and Common Law. Nevertheless, your agent may ask you to sign an estate agency agreement. Since the Estate Agents Authority does not provide any recommended agreement form for non-residential property, you should read the agreement carefully before you sign it. If you have any questions, ask the agent or your solicitor.

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