Some big real estate agents are planning to reject Henley Estates’ proposal for citizenship clients to be directed to their listed properties in return for half their commission on rentals and 80 per cent of their commission for sales.

Sources within the real estate sector described this move as “outrageous” and said commissions were never demanded when clients were referred by other professionals.

The sources said Henley Estates sent them a nine-page “introduction agreement” saying it would “direct” clients interested in Malta’s citizenship scheme to real estate agents on a “non-exclusive” basis.

The agent would be given contact details for the client but would only be expected to show them a “maximum of three properties”, according to one source who asked for clarification of the agreement’s terms.

Agents were also told that as the property was only being purchased as a pre-condition for citizenship – rather than as an investment or for residential purposes – the sale was more or less guaranteed. Sources told Times of Malta the larger agencies would probably reject the deal.

“We fail to see how this agreement is in the best interest of the client. And we fail to see how it is in the best interest of Malta in the long-term. Clients will be advised by Henley on which property to buy, when Henley is getting a commission on all the properties suggested,” one real estate agent said.

Another added that the larger agencies had greater overheads to sustain the level of service they offered.

“It is possible that smaller real estate agencies might be crazy enough to accept but it is unlikely they will have enough properties on their books to be able to offer sufficient choice,” the sources said.

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“As far as we are concerned, we believe it is a free market and if Henley wants to work this way it can.

“But it is a free market for us too and I have no intention of using my resources so they can make themselves a lot of money,” he said.

When contacted Henley Estates managing partner Andrew Taylor said much of the reaction stemmed from the fact it was being overlooked that Henley and Partners and Henley Estates were two separate companies.

“Neither Henley Estates nor myself, as managing shareholder, have any direct financial benefit from the work being performed by Henley & Partners for the government,” he said.

He added that Henley Estates was a global real estate company catering for high-net-worth individuals to acquire private or investment property outside their home country.

Such commission-sharing agreements were used in every country in which they operated, he said.

“We are a real estate company ourselves and provide a global and lifelong service to our clients – we do not wash our hands. With this in mind, rather than building up a portfolio of resale listings ourselves, we decided to ask other local agencies who already have the listings if they wish to work together.

“If they would like to be strategic partners and bring a listing to us, then yes we proposed they take one per cent from the five per cent as a reasonable share since we have the most significant costs to cover...

As far as we are concerned, we believe it is a free market and if Henley wants to work this way it can. But it is a free market for us too

“Overall, this was – we thought – a positive move and done in an effort to include local companies in our activity, rather than a negative or to exclude anyone.”

Mr Taylor also made it clear that most of the property listings in Malta were non-exclusive so there was nothing stopping any other company from signing up a property for sale directly and earning the full five per cent.

Asked whether the agreements might limit the choice available to Henley Estates’ clients, Mr Taylor assured that if clients were looking for something specific they would instruct them directly and Henley Estates would search the market to find exactly what they were looking for.

In the meantime, it emerged that more than 100 organisations have applied to market the citizenship scheme, after Henley & Partners’ monopoly was removed by the government following widespread criticism.

The permit requires a €1 million professional indemnity insurance, which might prove too onerous for many of the applicants.

One firm – a household name – whose application was approved said the commission being asked from real estate agents by Henley Estates was unheard of. It was unimpressed by the distinction between Henley and Partners and Henley Estates.

“We refer clients all the time to real estate agencies, based only on whether they are reputable or not. But we never ask for a commission. I suspect some agents will sign because they are desperate for business.

“But for companies like us, which are here in Malta for the long-term, the island’s reputation in clients’ mind is very important. We are not convinced this commission would be in the best interest of the clients or the island.”