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Paper 2 · Lesson 1 — Regulatory Framework, Registration, CPD and Professional Conduct

Commission and forms

The 8 prescribed forms, exclusive vs non-exclusive, the 3-month cap, the pink additional-terms sheet, scope exclusions, commission rate/GST/effective-cause.

2 questionsAnswers & explanations includedFree — no sign-up

Question 1

An invoice dispute has soured an otherwise smooth deal, with the landlord convinced both that the rate is fixed by law and that GST has been tacked on where it should not be. A landlord disputes his agent's invoice, insisting there is a fixed statutory commission rate of 2% and that GST should never be added on top of commission. The agency is GST-registered.

Which statement correctly states the position on commission and GST?

  1. A. Commission has no fixed rate and is negotiated; a GST-registered agency must charge and remit GST.
  2. B. CEA fixes the rate at 2% for residential leases, and GST is always absorbed within it.
  3. C. Commission is negotiable, but GST cannot be charged on estate agency commission at all.
  4. D. Commission must follow CEA's published schedule, and GST is payable only if the client agrees.
Show the answer and full explanation

Answer: A

The rule. There is no fixed statutory commission rate; commission is negotiable. A GST-registered agency must charge and remit GST on its commission.

Why A is correct. Commission is negotiated, not fixed, and the GST-registered agency must charge and account for GST on top of it.

The other options.

  • B invents a fixed 2% rate with GST absorbed. There is no fixed rate.
  • C says GST cannot be charged on commission. A GST-registered agency must charge it.
  • D ties commission to a CEA schedule and makes GST optional. Neither is right.

Exam note. No fixed commission, and GST is not optional for a GST-registered agency — it must be charged and remitted.

A GST-registered agency must charge and remit GST on its commission →

Question 2

A salesperson is asked whether the prescribed estate agency forms must be used across a mixed bag of deals his firm is handling: a factory lease, an en-bloc collective sale, a developer's sale of new units in its own project, and an ordinary residential resale in Singapore.

Consider the following statements.

  1. (i) The prescribed forms are not required for industrial property, such as a factory lease.
  2. (ii) The prescribed forms are not required for an en-bloc collective sale under the Land Titles (Strata) Act.
  3. (iii) The prescribed forms must be used for a developer's sale of new units in its own licensed project.
  4. (iv) The prescribed forms are appropriate for a residential resale of a Singapore property.
  1. A. (i), (ii), (iii) and (iv)
  2. B. (ii) and (iv) only
  3. C. (i) and (iv) only
  4. D. (i), (ii) and (iv) only
Show the answer and full explanation

Answer: D

The rule. The prescribed estate agency forms are for ordinary residential sale, purchase and lease. They are not required for industrial or commercial property, for en-bloc collective sales under the Land Titles (Strata) Act, or for a developer's sale of new units in its own project.

Why D is correct. (i), (ii) and (iv) are correct. (iii) is false — a developer's new-launch sale is outside the prescribed forms.

The other options.

  • A adds the false (iii), that new-launch developer sales use the forms.
  • B drops the industrial-property exclusion at (i).
  • C drops the en-bloc exclusion at (ii).

Exam note. Industrial, commercial, en-bloc and developer launches all sit outside the prescribed forms; ordinary residential resale is where they apply.

The prescribed estate agency forms are for ordinary residential sale, purchase and lease →

Practise it under exam conditions

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