Commercial Real Estate Tenant Representation Agreement
Commercial Real Estate Tenant Representation Agreement – What You Need to Know
If you`re a business owner looking to lease commercial real estate, you may need the services of a tenant representative. A tenant representative is a professional who helps tenants find and negotiate lease terms with landlords. Before you hire a tenant representative, it`s important to understand the tenant representation agreement.
What is a Tenant Representation Agreement?
A tenant representation agreement is a contract between you (the tenant) and the tenant representative. The agreement outlines the scope of work, compensation, and other terms of the engagement. Typically, the tenant representation agreement is a non-exclusive agreement, which means you can work with other tenant representatives or find commercial properties on your own.
What Does the Tenant Representation Agreement Include?
The tenant representation agreement includes the following:
Scope of Work: The agreement outlines the services the tenant representative will provide, such as identifying suitable properties, negotiating lease terms, conducting site visits, and reviewing lease documents.
Compensation: The agreement specifies how the tenant representative will be compensated. Tenant representatives typically receive a commission based on a percentage of the lease value or a fixed fee. The commission rate can vary depending on the property type, lease term, and other factors.
Term: The agreement specifies the duration of the engagement. Typically, the term is six months to one year, but it can be longer or shorter depending on the situation.
Confidentiality: The agreement includes a confidentiality clause that prohibits the tenant representative from disclosing confidential information to third parties.
Termination: The agreement includes a termination clause that allows either party to terminate the agreement if certain conditions are met.
Why Do You Need a Tenant Representation Agreement?
A tenant representation agreement protects your interests and ensures that you receive the services you need. By signing the agreement, you and the tenant representative have a clear understanding of the scope of work, compensation, and other terms of the engagement.
The agreement also helps to establish a good working relationship with the tenant representative. You can discuss your needs and expectations upfront and avoid misunderstandings down the line.
Conclusion
If you`re planning to lease commercial real estate, hiring a tenant representative can help you save time and money. However, before you sign a tenant representation agreement, it`s important to understand the terms of the engagement. By working with a tenant representative and signing a tenant representation agreement, you can ensure that you receive the services you need and that your interests are protected.