Estate Agent Agreement (Hong Kong)

An Estate Agent Agreement in Hong Kong records the particulars needed to administer and distribute a deceased person's estate.

Hong Kong's estate agency industry is thoroughly regulated. The Estate Agents Ordinance (Cap. 511), enacted in 1997 and administered by the EAA, establishes a mandatory licensing system for all persons carrying on estate agency work. Only holders of a valid Estate Agent's Licence or Salesperson's Licence issued by the EAA may legally carry on estate agency work — introducing property buyers to sellers, negotiating transaction terms, and supporting property leasing. Section 28 of Cap. 511 makes unlicensed estate agency work a criminal offence punishable by a fine of up to HK$500,000 and imprisonment for up to 3 years.

The EAA maintains a public register of all licensed estate agents and salespersons. Licensed agents must complete annual continuing professional development (CPD) training, maintain professional indemnity insurance, comply with the EAA's Code of Ethics (the Practice Circulars), and fulfil customer due diligence obligations under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) as designated non-financial businesses and professions (DNFBPs). Section 16 of the Estate Agents Ordinance (Cap. 511) requires estate agents to act in the client's best interests and disclose all material facts known to them about the property.

Hong Kong's property market is one of the world's most active. The Land Registry registers all property instruments — including Agreements for Sale and Purchase, Assignments, and Tenancy Agreements — under the Land Registration Ordinance (Cap. 128). The Stamp Duty Ordinance (Cap. 117) imposes stamp duty on property transactions, with residential property stamp duty ranging from 1.5% to 8.5% of the consideration, plus Buyer's Stamp Duty (15%) for non-permanent-resident buyers and New Residential Stamp Duty (15%) for buyers who already own residential property in Hong Kong.

The Conveyancing and Property Ordinance (Cap. 219) governs the formal conveyancing process. Section 3 of Cap. 219 requires property instruments to be in writing. The Landlord and Tenant (Consolidation) Ordinance (Cap. 7) governs residential tenancies — the 2022 amendments to Cap. 7 introduced enhanced security of tenure for domestic tenants, significantly affecting estate agents' advice to landlord clients. The Residential Properties (First-hand Sales) Ordinance (Cap. 621) governs sales of new residential developments, imposing additional disclosure requirements on developers and their appointed agents. Estate agent agreements are the gateway document for most Hong Kong property transactions, preceding the Provisional Agreement for Sale and Purchase (PASP) and formal Agreement for Sale and Purchase (ASP).

Estate Agent Agreement in Hong Kong is needed whenever a property owner, buyer, landlord, or tenant engages a licensed estate agent or salesperson to act on their behalf in a property transaction, in the following circumstances.

Residential Property Sales: Vendors listing residential properties — flats, village houses, townhouses, or car parking spaces — in Hong Kong should execute a written estate agent agreement before authorising the agent to market the property. The agreement should specify whether it is an exclusive, sole, or open listing arrangement, the commission rate in HKD, and the duration of the marketing mandate under Section 5 of Cap. 511.

Residential Property Purchases: Buyers engaging an estate agent to source, identify, and negotiate the purchase of a residential property in Hong Kong need a written agreement confirming the agent's authority, commission entitlement (typically paid on completion), and obligations under the EAA Code of Ethics and Cap. 511.

Commercial Property Transactions: Landlords and tenants of commercial, retail, or industrial properties negotiating lease terms engage estate agents under formal agreements specifying commission (typically a percentage of total lease value or a number of months' rent) and the scope of services (property search, negotiation, due diligence support).

Double Agency Disclosure: Where the same estate agent or the same estate agency firm represents both the buyer and the seller, written consent from both parties is required under the EAA's Practice Circular before the double agency proceeds. The estate agent agreement is the appropriate document to record this disclosure and consent under Section 14 of Cap. 511.

AML/CTF Customer Due Diligence: Licensed estate agents in Hong Kong must conduct customer due diligence (CDD) on clients under Cap. 615 before providing estate agency services. The estate agent agreement initiates the formal client relationship and triggers the CDD process, including identity verification and source of funds enquiry for purchase transactions above applicable thresholds.

Property Developer Projects: Developers selling new residential or commercial developments engage estate agents and salespersons under formal estate agent agreements to handle sales and marketing, subject to EAA licensing requirements and the Residential Properties (First-hand Sales) Ordinance (Cap. 621) where applicable. Agents selling first-hand residential properties must comply with Cap. 621's mandatory disclosure, price list, and show flat requirements.

Estate Agent Agreement in Hong Kong must include the following key elements to comply with the Estate Agents Ordinance (Cap. 511) and EAA requirements.

Parties and Licences: Full legal names of the client (vendor, purchaser, landlord, or tenant) and the estate agent or estate agency company; EAA licence number and licence type (Estate Agent's Licence or Salesperson's Licence); salesperson's supervising estate agent details. The EAA prescribed form mandates disclosure of the licensee's details in accordance with Section 8 of Cap. 511.

Property Details: Full address; government lot number or new territories lot number; floor and unit; approximate floor area (gross and saleable in accordance with the Residential Properties (First-hand Sales) Ordinance (Cap. 621) measurement standards); and the nature of the title (freehold, leasehold, or government lease — all Hong Kong properties are held on government leases).

Nature of Agency: Whether the agreement is exclusive agency, sole agency, or open listing; duration of the agency mandate (commencement and expiry dates); and the consequences of the client appointing other agents or selling privately during the exclusive/sole period as permitted under Section 6 of Cap. 511.

Commission: Amount or percentage rate of commission in HKD; the transaction event on which commission becomes payable (typically on exchange of signed Provisional Agreement for Sale and Purchase or execution of formal Agreement); whether commission is payable if the buyer defaults post-exchange; and the commission refund mechanism if the transaction does not complete through no fault of the client.

Double Agency Disclosure: Whether the agent acts for both buyer and seller; written confirmation of both parties' informed consent in accordance with EAA Practice Circular requirements and Section 14 of Cap. 511; and the specific conflict management measures the agent will apply.

AML/CTF Obligations: Client's obligation to provide HKID, passport, or company registration documents for CDD verification; source of funds declaration for purchase transactions; and the agent's right to terminate the agreement if CDD cannot be satisfactorily completed under Cap. 615.

Agent's Duties: Duty to act in the client's best interests under Section 16 of Cap. 511; obligation to disclose actual or potential conflicts of interest; duty to provide accurate property information; obligation to comply with the EAA Code of Ethics and Practice Circulars; and duty to report offers promptly and accurately.

Dispute Resolution: Complaints may be made to the EAA; contractual disputes referred to the District Court or Court of First Instance depending on the amount in dispute. Forms-legal.com provides the Provisional Agreement for Sale and Purchase and Residential Tenancy Agreement for Hong Kong, the next steps following execution of an estate agent agreement.