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 Two years ago, Mr Chan bought the flat he now lives in. The formalities of the transaction were completed but there was still trouble because a dispute over commission with the estate agent arose. It was not that Mr Chan was unwilling to pay a commission to the estate agent who helped him to purchase the flat. He only had a problem with the amount of commission payable. It happened before completion, when the estate agent undertook to apportion the outgoings on the flat between the owner and the purchaser. It was after completion that Mr Chan discovered that the agent had left out an overdue electricity bill. By then the former owner could no longer be found, and Mr Chan had to pay for it himself and suffered a loss of several thousand dollars. Mr Chan went to the agent to express his dissatisfaction. To pacify Mr Chan, the agent promised orally to reduce the commission. Subsequently, Mr Chan received a bill from the estate agency demanding payment of the commission, without any reduction. When he made inquiries, he found that the agent concerned had left his job, and the agency said that there was no record of a discount on commission. Mr Chan was infuriated, so he simply put off paying. The two parties had to go to court over a few thousand dollars. The proceedings lasted nearly two years and the dispute was only resolved recently.
Quite a number of disputes between estate agents and their clients are related to commission. If a dispute cannot be resolved through private negotiation, then the court is where the right and wrong of the parties are decided. However, as legal proceedings take time, most disputes cannot be resolved quickly. If the parties are represented by solicitors, the costs involved will also be considerable.
From 1st November 1999, any commission dispute, provided that it meets the following conditions, may be submitted to the Estate Agents Authority for determination:
- The dispute involves a licensed estate agent and his client;
- The dispute is related to the amount, computing method or mode of payment of the commission;
- The total of the commission or other charges involved in the dispute does not exceed $300,000;
- The parties agree to refer the dispute to the Authority for determination; and
- The parties have entered into a prescribed estate agency agreement.
A determination of the Authority may be registered at the District Court. After registration, it may be enforced as a decision of the District Court. This service offered by the Authority provides consumers and estate agents with an economical, speedy and expertly conducted way to resolve their commission disputes. It is also an efficient alternative to the often complicated and time-consuming legal proceedings.
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