What a Tenant Representation and Broker Compensation Agreement Commits You to Pay

Where the broker's pay is actually written

In two documents, and the tenant signs only one. The commission itself is set in an agreement between the landlord and the brokers. Your agreement with your broker usually says, in a line or two, that the broker will look to the landlord for its fee.

That line is the first thing to find. If it is there, the default is that you pay your broker nothing out of pocket. If the agreement instead makes the tenant responsible for the commission, with the landlord's payment treated as a credit, the default has been reversed, and you should ask why.

The fallback clause: when a tenant could owe a fee

The fallback covers the cases the default does not.

• A landlord that will not pay a commission.
• A sublease, where the company giving up the space usually pays in the landlord's place.
• A renewal of the lease you already have.
• A floor you found and brought to the broker yourself.

A fair agreement gives each one a sentence. Three limits are worth asking for: a cap on anything you could owe, a condition that it applies only to deals you approved after being told the landlord's position, and nothing owed on space carved out at the start. These are business points. Your attorney should confirm how the clause reads.

The protection period after the agreement ends

Also called the tail. For a set time after the term, the broker is still owed a commission if you lease a property it introduced. The idea is fair: it stops a tenant waiting out the term to cut the broker out. The scope is what to negotiate.

• Limit it to floors the broker actually showed you, named on a written list.
• Keep the period short.
• Check that a commission earned during the tail is still the landlord's to pay in the ordinary case.

What to ask before signing, with the floors below as the test

Ask one plain question: how are you paid on my deal? A complete answer names who pays, under which agreement, whether the amount differs between buildings on your shortlist, and whether the firm also leases any of them for the owner. How to choose a tenant rep broker explains how a commission is figured, which this page leaves alone.

Then make it concrete. The floors below sit in the upper-middle price band we publish. Pick one and ask the broker to say, for that building, who would pay and whether anything could come back to you. Put the same question to Nomad. In most transactions the landlord pays the broker fee, and the lease terms decide each deal.