What is dual agency in commercial real estate?

Dual agency is when one broker or brokerage represents both the landlord and the tenant in the same transaction. Because the two sides have opposite goals, a dual agent cannot fully advocate for either. In practice it often means the tenant has no real representation while the deal still closes.

Is dual agency legal?

It depends on the state. Some jurisdictions permit it with written disclosure and informed consent; others restrict it or use designated or transaction brokerage frameworks. Because rules vary, consult a local real estate attorney before consenting to an arrangement where one broker serves both sides.

How do I avoid a conflict of interest with my broker?

Use a broker who represents tenants only, and ask direct questions: whether they represent the landlord or hold the listing, exactly how they're paid, and whether they've ever advised against a deal. Watch whether the answers are straight or evasive.

Conflicts of Interest and Dual Agency

Dual agency is when a single broker — or brokerage — represents both the landlord and the tenant in the same deal, which means they can't fully advocate for either without shortchanging the other. It's the clearest conflict of interest in commercial real estate, and understanding it is how you make sure the person you trust is actually on your side. This is the post where we turn the lens on our own industry.

What is dual agency, and why is it a problem?

In dual agency, one party is supposed to push for the highest rent and most owner-favorable terms while the other pushes for the opposite — and the same person claims to serve both. That's a logical impossibility wearing a friendly face.

It usually happens innocently in appearance: you call about a listing, the listing agent is helpful, and they offer to "represent you too" and "handle both sides." It sounds efficient. What's actually offered is the quiet removal of your advocate — the person representing the owner is now also "representing" you, which in practice often means you have no real representation while the deal still gets papered. Rules vary by state (disclosure, consent, "designated" or "transaction" brokerage), so ask a Tennessee real estate attorney about specifics. The principle holds everywhere: be very cautious when your advocate is also the other side's advocate.

What are the subtler conflicts to watch?

Dual agency is the obvious one; these are more common and easier to miss.

The commission-size pull. Commission is a percentage of lease value, so every broker — even an honest tenant rep — has a mild incentive toward a bigger, longer, pricier deal. What matters is whether they manage it in the open. The test: have they ever steered you smaller?
Landlord relationships and house listings. A rep who does heavy business with a landlord, or whose brokerage holds the listing on a building they're showing you, has divided loyalties. Ask directly.
Pressure to close fast. A broker chasing a quarter-end number isn't neutral when you're wavering.
The "free" anesthetic. "It costs you nothing" discourages the scrutiny you'd apply if you were writing a check. Don't let the absence of an invoice switch off your judgment.

What questions protect me?

Ask plainly and watch whether the answers are specific or evasive. Do you represent the landlord or the building in any way? Does your brokerage hold this listing? Exactly how and by whom are you paid, and could your compensation and my best outcome diverge? Do you do a lot of business with this landlord? Have you ever advised a client not to do a deal?

A genuine custodian answers directly, even when the honest answer is awkward — because their whole value rests on being trustworthy. A transactional broker gets slippery. And hold your own rep to that standard: we're not above the incentives either — no broker is. The difference a custodial firm claims isn't immunity from conflicts; it's naming them, managing them in the open, and organizing the relationship around your long-term interest. Make us prove it.