A good commercial leasing broker is someone who has a good understanding of your particular type of real estate market (for example. B office, retail, industry, etc.), which can clearly explain the leasing process, iii) the other broker knows and has a good working relationship with them, (iv) is up to date in your market, and (v) understands your goals and how you design a leasing strategy, to achieve them. You`ll want to look for a broker that`s right for your specific business. You should choose someone you enjoy working with, as you can spend many months (and sometimes years) working with the broker to secure your spot. The real estate agent is an agent of the buyer or seller. An agent simply means that the broker can act on behalf of his client – the buyer or seller. ( Cal. Civ. Code §2079.13). Sometimes the broker can act as a double agent, which means that the broker represents both sellers and buyers. In this case, it is essential to read the brokerage contract carefully to ensure that the broker represents your interest in the transaction. It is advisable to use a real estate agent to represent you if your broker is a double agent. The brokerage contract will likely also include a “tail” at the end of the term.
The “tail” is a period during which the broker or brokerage firm receives a payment during the term of the contract for the broker`s negotiations with the lessors. If the tail cannot be removed, it must be cut tightly. The brokerage commission provides that the tenant complies with his obligations under the rental agreement so that the landlord receives the full expected rent. If the commission were to be paid month after month, it would stop if the tenant no longer paid the rent. If the commission is paid in advance (and even instalments are a down payment), it is unlikely that a broker will want to sell this Lexus and repay “undeserved” commissions. We are therefore looking for compromises. The biggest credit risk is at the beginning and it makes perfect sense to pay the commission over 18 months (as shown above) or 30 months (six installments). If the tenant “saves”, make the broker pay the commission rates that had to be paid before that date, or withhold them from it and receive the others. Brokers will not want to repay commissions, not least because the cooperating brokers may be involved and the individual brokers have “retired” in the meantime. The brokerage contract is a formal agreement between the buyer/seller and the broker. In the event of a dispute between these two parties, this agreement is the source for understanding the duty of each party in the agreement.
A real estate lawyer can help you verify and revise the brokerage form, which otherwise could favor the broker to your detriment….