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20180628 What happen to the deal when I fire my agent, Part 2

20180628 (Thu)

What happen to the deal when I fire my agent? Part 2 of 3.

S.157 of the Contract Act 1950 states:

“The principal cannot revoke the authority given to his agent after the authority has been partly exercised, so far as regards such acts and obligations as arise from acts already done in the agency.”

What it means is the job done of selling or renting the property. If your agent has received booking fee from the tenant or buyer, the job of selling and renting your property has been partly done. This agency work cannot deny the prospect tenant or purchaser the right of renting or purchasing the property.

Although the payment of commission is only due upon the agreement being unconditional, the job of finding a buyer or tenant is done with the payment of booking fee. Standard 2014 of MEAS (Malaysian Estate Agency Standard) has the below:

4.2.7 If the other party to the deal aborts and the Client to the Firm forfeit the deposit (paid by the prospective buyer) before the signing of the sale and purchase agreement, or letting or leasing agreement, the Firm is entitled to claim 50% of the full fee or 50% of the forfeited deposit whichever is the lower.

4.2.8 Where earnest deposit or rental deposit is paid and accepted by the Client and subsequently the transaction is aborted by the Client, before the signing of the sale and purchase agreement or letting agreement, where in the lease/letting, occupation has not taken place, the firm is entitled to 50% of its full fees plus all disbursements or 50% of the earnest deposit or rental deposit plus all disbursements, whichever is the lower.

Therefore, the outgoing agent has completed his job in looking for a tenant/purchaser. He is entitled to 50% of the fee.

As for the contract with the tenant/purchaser, it is still conditional, thus both the parties have to allow the agreement to become unconditional when the tenancy contract or sale & purchase agreement can come to a completion.

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