The Fine Line: Lawyer vs. Commercial Real Estate Broker Conflicts of Interest

When it comes to commercial real estate transactions, California lawyers and brokers are held to different standards regarding conflicts of interest.
 
Advocacy and Representation
 
Lawyers are bound by strict ethical rules and must prioritize their clients' best interests above all else. Dual representation, where a lawyer represents both parties in a transaction, is generally prohibited due to the inherent conflict.
 
In California, commercial real estate brokers also advocate for their clients' interests but are allowed more latitude in their approach. They can represent both sides of a transaction, known as dual agency, as long as both parties provide informed written consent. While this practice allows brokers to facilitate transactions, it limits their ability to fully represent each party's interests.
 
The Risks of Dual Agency
 
While dual agency may seem convenient, it can create conflicts of interest. Brokers representing both parties may have difficulty providing impartial advice or negotiating aggressively on behalf of one client without compromising the interests of the other. This can diminish the value of having broker representation.
 
Practical Tips
 
When working with a commercial real estate broker, it's essential to ask about potential conflicts of interest. If the broker represents both landlords and tenants, their ability to advocate exclusively for your interests may be limited.
 
Choosing the Right Representation
 
To ensure you receive the best possible representation, consider working with a broker who specializes in representing tenants. This guarantees that they will prioritize your interests and avoid conflicts that could arise from dual agency.
 
At CroninCRE, we exclusively represent tenants. Never landlords. We provide real estate advocacy negotiating on our client’s behalf without conflict of interest.