Selling a flat with Form 3: compare exclusivity and commission before signing
Form 3 is the estate agency agreement for selling a Hong Kong residential property. Choose an exclusive or non-exclusive appointment, insert definite start and end dates, and read Schedule 2 for the negotiated commission and payment point. A binding sale agreement made through another agent during an exclusive appointment may leave the seller paying both agents.
What exclusive appointment changes
A licensed agent engaged to sell a Hong Kong residential property must enter into and explain the prescribed estate agency agreement, Form 3, to the vendor. Clause 1 asks whether the appointment is exclusive or non-exclusive. That choice affects the original agent’s right to commission if another agent sells the flat during the agreement’s validity period. Check every agreement already signed, even if your intention was to market with several agents.
If the vendor enters a binding sale and purchase agreement through another agent during a valid exclusive appointment, Form 3 gives the exclusive agent a right to claim commission. The vendor must also consider the agreement with the agent who arranged that sale and may have to pay both agents. Under a non-exclusive appointment, a vendor may appoint more than one agent. Review the sale and commission conditions in each separate agreement; the label alone does not replace their actual terms.
| Appointment | Check before signing | If another agent completes the sale |
|---|---|---|
| Exclusive | Named agent, validity dates and any extra duties | A binding sale agreement through another agent during the exclusive period may mean commission to both agents |
| Non-exclusive | Validity and commission terms of each Form 3 | Assess each agreement on its own terms; one form does not cover every agent |
Set a definite validity period
Clause 1 has a commencement date and an expiry date, both inclusive. Do not leave the end date blank or write 'until further notice'; agree exact dates. Put any other agents’ appointment dates alongside this one and identify overlap with the exclusive period. If the period needs to change, record the mutually agreed change in writing.
Exclusive agency is separate from the Form 3 choice between single, dual and potentially dual agency. Those terms describe whether the agent acts for the vendor, for both vendor and purchaser, or may later act for both. Exclusivity describes whether this is the vendor’s only agent. Ask the agent to explain both fields and make sure the selected options reflect what was agreed.
Estate Agents Authority: Form 3
Estate Agents Authority: appointment period and agency relationship
Read Schedule 2 for the commission trigger
The vendor and agent negotiate the amount or percentage of commission; Form 3 does not impose a standard rate. In Schedule 2, check whether the agreed figure is a fixed sum or a percentage of the transacted price, and whether it becomes payable when the sale and purchase agreement is signed or when the transaction completes. Record any extra costs and any extra duties promised under an exclusive appointment in the agreement, rather than relying on an oral understanding.
Schedule 2 says the vendor owes no commission if completion fails without fault on the vendor’s part; commission already paid must then be refunded as the form provides. There is an exception: commission becomes payable when a binding sale and purchase agreement is cancelled by mutual agreement other than under its own provisions. Read this alongside the rest of your transaction documents before assuming that a cancelled sale always removes the fee.
Form 3 also has choices on key custody, sub-listing and advertising. Review them before signing and take the signed original or a copy immediately afterwards. Keep any written changes with it. If you later change agents, first check the earlier validity period and payment terms.
A short check before you sign
Lay the proposed Form 3 beside every other current agency agreement for the same flat. Ask the agent to explain any unclear exclusivity effect or extra term, and put agreed changes in writing. If an explanation still leaves a material concern, seek your own solicitor’s advice before signing.
- Clause 1: agency business, property, exclusive or non-exclusive choice, and exact start and end dates.
- Clause 2: single, dual or potentially dual agency and the related disclosure.
- Schedule 2: commission amount or percentage, payment point and failed-completion conditions.
- Other choices: keys, sub-listing, advertising costs, extra duties and your signed copy.
