Tenant Representation – what is it, and why do you need it?
Why is Tenant Representation so important? Landlords are experts in managing and leasing their properties. When you, as a tenant, sit down with a landlord to negotiate, you can be sure that they have come to the table armed with information from in-house and outside real estate professionals. The landlord’s broker has significant fiduciary duties to the landlord. These include but aren’t limited to the duty of undivided loyalty, confidentiality, and always acting in the landlord’s best interests.
Tenants working with the landlord’s representative have no representation at all. The landlord’s broker does not owe you these fiduciary duties. They are limited to acting honestly, using reasonable care and skill, and not knowingly providing false or misleading information.
THE POWER OF REPRESENTATION
When you, the tenant, engage a tenant representation broker to assist you, your broker has a duty and obligation to look after your best interests with undivided loyalty and confidentiality and without conflict of interest.
One key advantage of working with a broker specializing in tenant representation is their ability to provide unbiased advice. You can be confident that you receive objective guidance throughout the leasing process, from property selection to lease negotiation. When you work with a tenant representation specialist, you can expect valuable market insights and strategic recommendations. They will advise you on market trends, upcoming developments, and potential risks or opportunities, empowering you to make informed decisions that align with your business objectives.
WHO PAYS FOR YOUR TENANT REPRESENTATIVE’S SERVICES?
The landlord typically pays the commercial real estate brokerage fees. The fees are built into the building’s annual budget and paid whether or not you have representation. Without a tenant representative, the landlord’s professionals (the listing agent, property manager, asset manager, etc.) will be paid the entire fee.
