What if my potential tenant/purchaser changed his mind with/without signing of contract? What would happen to the booking fee? And, commission? Part 3
Let us say, RM1,000,000 property is sold by offer of RM30,000 as earnest deposit, and the buyer later on turn down refusing to buy.
A. Without signing of SPA
He will forfeit this RM30,000 (3%). The agency firm can only claim up to maximum of 50% of the booking fee or commission, WHICHEVER is the LOWER.
So, if the booking fee is RM20,000, the claimable 50% is RM10,000, although 50% of 3% of agreed commission is RM15,000.
B. With signing of SPA
He will forfeit this RM30,000. However, if all the conditions become unconditional, the Sale and Purchase Agreement has been signed, a full 100% of the fee is claimable.
For example, when a client buys a property RM1,000,000 with a booking fee of RM30,000 (3%) and bank loan of 70%. He later on signed the SPA. The cash down payment of RM270,000 was never paid. And, he called off the remaining RM700,000 bank loan. In this case, as the SPA is signed and all the conditions had been fulfilled (bank loan approved) the agency firm should claim 100% of the agreed commission.
Standard 4 MEAS
4.2.3 If the sale and purchase agreement or letting or leasing agreement is unconditional, the estate agency fee is due upon the signing of the sale and purchase agreement or letting or leasing agreement.