How to avoid the hassles in renting out a property
Anne Yeung discusses the kinds of services a landlord can expect from an agent handling the rental arrangements for their property
Anne Yeung is head of customer service at Sotheby’s International Realty in Hong Kong. She discusses ways in which an estate agent can help a client who is renting out a property.
What is the role and what are the duties of an estate agent who is renting out a property on behalf of a client?
All agents must be licensed by the Estate Agents Authority in order to provide agency services in Hong Kong. As required by the Estate Agents Ordinance, they are required to enter into an agency agreement with the landlord. This stipulates terms such as the valid period of the agreement, the duties of the agent, the amount of commission payable, the payment terms, and so on. Next, the agent will carry out a visual inspection of the property and its surroundings. If damage or defects are found, the agent will ask the landlord to arrange to get them fixed. The agent will then enter the details concerning the property’s conditionin the tenancy agreement to avoid any future disputes.
What kind of services can a landlord expect from an agent?
After appointing an agency, your property will be listed on the rental market through various marketing channels, such as online listings, e-mail marketing, leaflets, among others. The agency will then handle any tenant inquiries, arrange viewings of the property, handle negotiations on rental terms, handle the drafting and the signing of the tenancy agreement, the collection of the security deposit, the stamp duty of the tenancy agreement, and so forth. Finally, the agent will ensure the property is handed over to the tenant in good and clean condition.
How much do I have to pay the estate agent for arranging to rent out my property?
It is quite common for an estate agent to charge the landlord a commission equivalent to half a month’s rent. Some landlords may negotiate for a lower fee, while others are willing to pay a higher commission rate in exchange for a quicker closing of the deal. If the landlord or the tenant wants to withdraw from the arrangement before the formal tenancy agreement is signed, the cancelling party is expected to forfeit their deposit and pay the agreed commission – and sometimes also the other party’s commission – to the agent, depending on the terms stated in the provisional tenancy agreement.
How long will it take to find a tenant for my property? And how can I know how much rent
A lot of factors – such as the rental amount being sought – can influence the amount of time it may take to find the right tenant. Before advising you on how much rent you should ask for, the agent will conduct some research into recent comparable transactions, and will advise you on how much he thinks potential tenants would be willing to pay for your flat.
Should I prescreen my tenants? How can I make sure he or she will keep my property in good condition?
The landlord may ask the prospective tenant for proof of employment, income and credit, to ensure that he or she has the ability to pay the rent. In accordance with the tenancy agreement, the tenant must hand the property back to the landlord in good, clean and tenantable condition at the end of the tenancy. The security deposit provided by the tenant should give the landlord some peace of mind; if the tenant causes any damage to the property, the cost of any repairs arising from such damage can be deducted from this deposit.
How is it best to deal with difficult tenants? Should I resort to evicting a bad or non-paying tenant?
See if you can reason with the tenant first. Avoid confrontation and avoid making any threats. Politely and clearly notify the tenant that if he or she does not remedy whatever the problem is, you will have to take formal steps to deal with the matter – for example, to enable you to collect whatever rent you are owed. Most of the time, a sensible tenant is willing to listen and to take whatever remedial steps are needed. Keep a record of any such incidents and make a note of the consequences.