When we’re referring to a tenant/landlord relationship, we understand that an agent represents one or the other of these parties. But for the purposes of this post, we aren’t defining “agency” as the agent’s brokerage company. Instead, we’re using agency to refer to the duties, obligations and actions of the agent to either the tenant or the landlord. It’s a subtle difference, but it has a profound impact on the entire transaction. It’s critical that an industrial real estate tenant understands how.
The Landlord/Tenant Relationship
There are similarities between the landlord/tenant relationship and other business relationships. Usually, one side needs what the other side brings to the relationship, and both sides want the best outcome for their respective business. Both sides want to work together, and both want the best terms for themselves. In almost every case, the principals of the property ownership group and the tenant owner will never meet, nor even talk or directly communicate. That’s where the agent and his/her agency duties come into the picture. And here’s what tenants need to understand.
The Landlord’s Agent
Landlords have a brokerage agent and, usually, a property management agent. These agents interact with tenants within their property portfolio. You’ll now that an agent works for a landlord by his for sale or for lease signs on a given property. Be very clear on this point – these signs mean that the agent is under legal contract with the landlord to exclusively represent the landlord.
Tenants must that the landlord’s agents with whom they interact have a legal service to perform for the landlord. The landlord pays the agents for these service and for specific duties that may include retaining tenants at the landlord’s preferred lease rates and terms. It goes without saying that those lease rates/terms will be landlord friendly. After all, that’s what the landlord’s agent is paid to d0. But does this mean to you, the tenant? It means that to the landlord’s agent, your needs and preferences come second.
In fact, the landlord’s agent is only required by law to avoid being deceitful, fraudulent or dishonest. That’s the extent of the standard to which the landlord’s agent is held in his dealings with the tenant. But once you are aware of this, you’re in a better position.
The landlord’s agent is focused on carrying out the terms of the brokerage agreement; avoiding disclosure of confidential information relating to the landlord; seeking a lease for property at the landlord’s desired price and terms; and more – all for the landlord. That means that any information you carelessly or thoughtlessly offer about your business to the landlord’s agent will make its way to the landlord, but landlord information you should earn will not come back to you.
The bottom line in understanding agency as an industrial real estate agent is this: just as the landlord has something representing his interest, so should you have someone representing your. And if you’re wondering how you might find someone for that, we suggest that you start by reading some of our other posts:
Your next step should be contacting Miller Industrial Properties directly.
.png){kind=logo}
Comments