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Fees, Commission & Charges

Most people do NOT understand estate agency and have a wrong impression about its charges. Generally there are three (3) parts of the charges.

  • Standard Commission charges
  • Taxes
  • Disbursements

1. Standard Commission Charges

There is a fee schedule (Jadual – 7th Schedule [Rule 48] – Scale of Fees) in the Law that the fee for transaction of a purchase/sale is maximum at 3% of the transacted price.

The rate for a tenancy less than 3 years is charged a commission to maximum of 1.25 of the monthly rental. If the monthly rental is RM1,000 and the tenancy agreement is for duration of 3 years, the fee is usually maximum to RM1,250. Most agencies only collect RM1,000 (1 month).

Rent Review – or continuing rental with the same contract (after expiry) for a new duration is 50% of the above rate, ie RM500. Example, after 1 year of renting, the same tenant has performed the contract and wished to continue renting for another year for a new contract.

2. Taxes

Other charges can be monies for paying taxes. These taxes include SST (Sales and Service Tax) and Stamping Fee (Stamp Duty). The agency only collects on behalf of government, and it is not a professional fee.

Read more about taxes here.

3. Disbursement

In most cases, when the clients expect that the agency deals with:

  • Paper work, e.g. help in editing, printing out and getting it stamped as administrative tasks, *NOT coming out with the legal tenancy agreement – which is prepared by both landlord and tenant;
  • Running of errands, minor repairs;
  • Taking video and burning the video into CDs for inventory;
  • Arranging for cleaning;
  • Sorting out water and electric meter readings;
  • Talk to management office, etc.

these jobs are called “disbursement”.

For running around, liaising with third parties and meeting some requests both parties, some agencies charge RM100 from each party.

In some occasions, these charges are waived due to straightforward dealings – for example, agent found a tenant and later landlord said he will deal with tenant directly, or vice versa. Then there is no extra work other than finding a tenant for the tenancy, this disbursement is waived.

In other occasions, the goodwill of the agent to the landlord for continual support of the agency engagement, this fee is also waived.

*For your information, estate agencies are not legal practices, hence they are not prescribed by the law for writing legal contract agreements for clients. However, clients can use standard template for such purposes and the engaged agent become clerk in helping up the paper works on the instruction of the client. This tasks are limited to just typing, printing and photocopying the drafts to be checked and agreed by both parties. It is not about modifying or deleting or adding content to the agreement. In the context of the law, the agent never acted in the contract writing between both parties.

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