The Case For Tenant Representation
Are You Represented in Your Office Space Lease?
In any business transaction there is an advantage to having as much relevant information as possible. In a real estate transaction, this is often difficult because of potential conflicts of interest.
It used to be simple. A commercial real estate broker represented the individual or firm with whom he or she had a listing agreement. If a broker with several office building listings is also representing a tenant in their search for office space, it is very difficult for the broker to be unbiased toward his or her own listings. The broker is representing the building owner and has a fiduciary responsibility to that owner. Thus, in this scenario, the potential tenant is left unrepresented, oftentimes, unknowingly.
Legally, the broker must disclose this relationship to both parties by entering into a role of dual agent. As a dual agent, the broker cannot disclose any information, which would put either party at an advantage in the negotiation process. In such cases, neither party, the tenant nor the landlord, are getting the value of the broker’s expertise.
In order to avoid any potential conflicts of interest or mixed loyalties, some brokers act only as tenant agents. The tenant’s best interests are always kept at the forefront, because the broker is not also representing landlords, which could prejudice their loyalty toward their client.
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