Managing commercial real estate agents… Posted 2009, 10 March Real estate agents for most of us are the people we love to hate. A necessary evil perhaps; to others they are to be avoided like the plague. The reality is that like every profession, there are good and bad. And the reality too is that the great bulk of property, either to be bought, sold, or leased, is handled by real estate agencies. To me the important thing is not to let emotion cloud our judgement or our interactions with real estate agents. Also to be completely clear about what their job is and what other expertise needs to come to the table in a property lease negotiation. The facts are that no matter how much a real estate agent says they are acting in the tenant’s best interests, on paper and legally they are bound to first and foremost represent the property owner or landlord’s interests. It is their fiduciary responsibility. Now naturally they want to work with you, the tenant, to negotiate something that works for both parties to close the deal, but only ever up to a point. Bear in mind that always it is their primary duty, both legally and financially, to do the best deal possible for their client – the property owner. To best manage your real estate agent you want to bring in expertise and research what is really going on in the market, and not take the opinion of the real estate agent as gospel. Legal and property market expertise is as important to include in your deliberations. In recent times real estate agencies have promoted themselves as one-stop shops that will look after all your property interests and needs, including legal, fit-out, relocation, as well as managing the terms and conditions of a lease. My advice is to steer well clear of putting all your eggs in the real estate agency’s basket. Get independent advice to throw into the mix. Find out what’s behind incentives that are being offered, and variations in terms and conditions that on the surface may look advantageous to the tenant. Always remember, it is the real estate agent’s legal obligation to put his client, the property owner, first.
Peter, wise words as usual. Thanks also for the advice you gave me regarding our landlord negotiations, it was extremely useful. There wouldn’t be many in this industry with more expertise in these matters than you, and in the current climate in particular such advice is very valuable. Kind regards Log in to Reply
Hi Mike The property market is very volatile at present, with both tenants and landlords under considerable pressure to ensure their asset/ business performance. Tenants that are working with us to actively manage their lease commitments are improving their short and long-term business fortunes. This is not the time to ‘hunker down’. Best wishes Peter Log in to Reply
