Category | Real Estate

Planning to rent? Being commission savvy helps!




Whether you are searching for a HDB room for rent in Singapore, or whether it is any other private, commercial or industrial premises that you are looking to rent; knowing what the property agent commission guidelines are could save you tonnes of money. Being familiar with these rules may be especially helpful if you are a foreigner, or if this is your first rental experience.

In the paragraphs below, we’ll take a look at what the broker or agency commission practices around rental properties are.

No “rules”, just “guidelines”

As a prospective renter, searching either for a Condo for rent, or for any other type of rental property, the first thing you should be aware of is that there are no hard-and-fast rules for rental commission payable – either by the landlord or the renter.  So if someone tells you that “The law requires you to pay x%, y% or z% as rental agent commission”, they are probably not being forthright with you! The law does not enforce any commission rates when renters agree to rent or lease a room or a condo.

Most likely, when you are searching for a room for rent in Singapore, you will be dealing with brokers/agents who are associated with the Institute of Estate Agents, Singapore (IEA). And the IEA does not mandate any specific commission rates, rather it provides general guidelines and best practices to be followed by landlords, tenants and brokers/agents.

Having said that however, you should be aware of the “norms” that are currently applicable to commissions payable. And generally speaking, such remuneration is based on the level of service that the broker or agency offers, or upon the satisfactory conclusion of the transaction. In all cases, the commission payable is mutually agreed upon between the service provider (broker/agent) and the renter.

Generally accepted commission practices

As a prospective tenant, here are the general guidelines for rental commission that you should be aware of:

a)     If your tenancy term is at least 24-months, and the monthly rent for the property is above $3,000, then you are not expected to pay any broker/agency commission

b)     Should your tenancy term be less than 24-months, and in the event that the monthly rental value is below $3,000, then your commission could range between half-a-month to a full-month’s rental value

As indicated previously, these are simply broad guidelines proposed for determining rental commission payable by tenants. Your commission/fee could be different from these guidelines if, for instance, you request some additional services from your service provider. For example, you may try to rent at a very specific (seldom sub-let) location, or you might wish to rent a very specific property, or you might be looking for an expedited closing date. All of these may cause the broker/agent to expend greater than normal effort in the transaction, which could mean additional commissions/fees are applicable.

Regardless whether you are looking for a private residential apartment, house or a condo for rent, there are additional guidelines that foster transparency in the rental transaction.  For instance, IEA suggests that when dealing with a professional broker/Agency, your service provider is also not expected to accept any commission / fee from both you (the Tenant) as well as your Landlord, in the same transaction, unless he/she has received prior consent of the Landlord and Tenant.

Website: FlatsDB.com

One Comment to “Planning to rent? Being commission savvy helps!”

  1. anne says:

    in Philippines, no commmission is required from tenants. only property owners will pay the commission for brokers who are able to rent out their condos or any property

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