Can an agent prepare tenancy agreement for his clients?
The answer is a Strict NO! However, it is a common practice. Why?
It is generally accepted that contract is to be prepared only by a legally qualified person – usually a lawyer. However, tenancy agreement which is a Tenancy Exempt from Registration (less than 3 years) despite being a legal binding contract between two parties, does not require registration with land office. There is also no need to go do a contract in a law office. This is unlike ‘lease’ which is registered with the leasee in the land title. In fact, Contracts Act 1950 even specified that a contract can be formed WITHOUT a written document (S.10 (2) CA50). Hence, any two parties can form the tenancy agreement themselves without having to go to a law firm. In such scenario, the agent is commonly the person entrusted to facilitate this task. Although as an agent -he is not a lawyer, he is in position difficult to reject, especially that is expected of him to add value. Of course, we understand that an agent cannot prepare the Sales and Purchase Agreement, but helping the landlord or tenant to prepare a simple tenancy agreement is expected of him. Such is added value of service.
Tomorrow, we continue on this topic…