In commercial real estate there are two types of brokers, those that represent landlords and those that represent tenants. The landlord broker has the responsibility to secure your tenancy at the highest price possible. Conversely, the tenant broker negotiates the same property at the best possible price to you. We never represent Landlords. Our fiduciary relationship is always exclusively with the tenant or buyer. Therefore our client never need to determine who’s side we are really on. We have no conflicts of interest. Our time is solely dedicated to tenants and buyers.
We don’t represent Landlords, represent properties or manage properties. No conflict of interest!
These facts are most important because we believe that it is impossible to fairly and honorably represent both the Landlord and Tenant in a transaction. We also do not believe there is such a thing as a magic wall that appears between departments in the same real estate company so that one team represents Landlords and one team represents tenants. Both teams work for the same company. That company has the opportunity to receive the entire fee.
We are not the only one’s that see the issue. An article was recently published by the George Washington University titled Conflicts of Interest in the Commercial Real Estate Market. This Article describes in detail:
- The commercial real estate industry lacks transparency
- The market is consistently supply side oriented
- The relationship between landlords and tenants is inherently adversarial
- Inherent conflict of interest issues have not been addressed in any systematic way
A quote from Peter Smirniotopoulos, a George Washington University Professor sums it up, “”If legal ethics prohibit an attorney or a law firm from representing both the landlord and a tenant [in a lease]…how can the divergent interests of those same parties nonetheless be adequately represented by the same?”