“Whenever you find yourself on the side of the majority, it is time to pause and reflect.” —Mark Twain
In Commercial Real Estate, two key players enter the deal with very different goals:
- Landlord: Builds wealth by maximizing rents and securing long-term, stable Tenants.
- Doctor: Builds wealth by minimizing occupancy costs and growing their patient base.
In over 90% of transactions, the Broker represents — or may represent — both sides. This dual representation is common because most firms both list properties for Landlords, and represent Tenants or Buyers.
The Hidden Cost of Mediation
Under dual representation, your Broker shifts from being your advocate, to acting as a mediator. While mediation might sound fair, in real estate it means your Broker cannot push for your best deal without harming their relationship with the other side. The result is often a watered-down outcome that protects the deal, not your bottom line.
An even riskier scenario is when a Landlord offers to have their Broker “help you” with your lease. It may seem convenient — the Broker already knows the property and the market — but that Broker is legally bound to the Landlord. Their job is to secure the highest rent and most favorable terms for the Landlord, often at your expense. The very agency agreement that protects the Landlord now works against you, leaving you without a true advocate at the table.
The Difference Between Having Representation and Having Protection
The Cornell University Law School defines Fiduciary Duty as “a legal duty to act solely in another party’s interests.”
When you hire a Broker and they represent you exclusively, fiduciary duty is guaranteed. They are legally obligated to put your interests first, with full loyalty, confidentiality, and disclosure. But if that duty is shared with the other side — as in dual agency — their ability to advocate for you is limited by law.
Think of it this way: you would never hire an attorney who might also represent your opponent. The same principle applies in real estate. Entering a negotiation without exclusive representation means you are accepting divided loyalty from the start.
A Lesson From Wall Street
This is not just a real estate problem. The U.S. financial markets have faced the same conflict for years. Imagine going to a financial advisor for an investment, only to be sold something from a fund they manage. Under the “suitability” standard, as long as the investment is “good enough” for you, the advisor has done their job. But their loyalty lies with their employer, not you.
Dual agency in real estate works the same way. A Broker who represents both a Landlord and a Tenant only has to arrange a deal that is “good enough” for you, because they also must protect the Landlord’s interests. An exclusive Broker with fiduciary duty to you alone can push for the very best outcome without compromise.
Red Flag: Dual Agency and Your Negotiating Power
All licensed Real Estate Brokers owe fiduciary duties to their clients. The problem is that in many states, dual agency, where the same Brokerage represents both the Landlord and the Tenant, is still legal with written consent from both parties.
Even if two different Brokers in the same office handle each side, the Brokerage benefits from closing the deal, not from maximizing your terms. Once you agree to dual agency, your Broker cannot negotiate aggressively for you without hurting the other side. In some cases, even suggesting a lower rent could violate their duty to the Landlord. The result is weaker negotiation and a deal that is simply “good enough” instead of the best you could have secured.
The Bottom Line
In real estate, the majority of transactions are handled by firms that can represent both sides. Following the crowd in this case means accepting the risk of divided loyalty and weaker negotiation. Choose the less-traveled path: insist on an agency agreement that guarantees your Broker’s fiduciary duty to you alone. If a firm will not commit to exclusive representation, find one that keeps a strict separation between Landlord and Tenant work. The best choice is a firm that represents only Tenants and Buyers. Your Broker should never be in a position to both represent you, and list properties for Landlords.
