DUAL REPRESENTATION BROKERAGE IS THE REAL ESTATE BROKERAGE INDUSTRY’S “800 pound gorilla”
Dual agency occurs when one commercial real estate company represents both the tenant and the landlord in a lease transaction. Sometimes it is one individual on both sides. Other times it is two individuals within the same firm.
When you, the tenant, use a dual agency, there’s an 800 lb. gorilla in the room that you should not ignore. Questioning where the agency’s or individual’s loyalties truly lie is an obvious issue. Is it with you the business owner or with the landlord?
Conflict of Interests
Every year tens of thousands of businesses are misled by brokers whose true loyalty is to the landlord. This costly mistake translates to higher rent, more overhead and less profits. Many tenants negotiating a lease for office space, retail space or industrial space and ignore the 800 lb. gorilla. They don’t talk about how a major component of their future is affected by people whose loyalties lie across the negotiating table—the dual rep broker and his true client, the landlord. The commercial real estate market has traditionally tried to hide this dirty little secret. But a growing group of tenants is realizing that in the world of big commercial brokerage firms, the landlord always wins.
The landlord’s goals and objectives clearly conflict with the tenant’s. Landlords are in the business of leasing and operating office buildings. They know every trick in the book and are very experienced. And their conduits are the landlord’s brokers and agents. A broker who has a listing on a building also has a fiduciary responsibility and contractual obligation to the landlord - not to you. How can that broker fairly and adequately also represent the tenant? The answer is that the broker can’t, no matter how much marketing spin they might use to justify it. An unsuspecting tenant doesn’t stand a chance when standing alone against a dual-agency broker and his landlord.
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