The Pros and Cons of Dual Agency... Just Kidding, There Are No Pros...
If you’ve been with us for a while you know how we feel about the dreaded…dual agency..
What is Dual Agency?
Dual agency is the act of a brokerage representing both the tenant and the landlord in a leasing transaction, and all brokerages do it (our founders saw firsthand how this hurts tenants, which is exactly why we don’t do it). The main takeaway? If you’re the tenant, you probably don’t know dual agency is happening and it inevitably hurts you because the landlord makes them more money.
Here are a couple of examples of why dual agency should NOT be legal in NYC:
Back in 2018 JLL represented both the tenant and the landlord in a lease with coworking operator, Spaces for 51,000 sf at 1441 L St. NW. JLL did not disclose that they were representing both sides. Read more about this lawsuit.
This year, CBRE is facing a $11.6 million lawsuit from a client because they claimed CBRE failed to properly disclose that it represented both sides on a $600k sf lease in Washington, DC. Read more about this lawsuit.
Where is Dual Agency Illegal in the US?
The following states have made it illegal for a brokerage to represent both parties.
Alaska
Colorado
Florida
Kansas
Maryland
Oklahoma
Texas
Vermont
Wyoming
Some states like Iowa and Tennessee have restrictions for dual agency, but it’s not illegal.
It is legal in all other states, but discouraged due to conflict of interest. Unfortunately, New York is one of these states and larger brokerages tend to make a lot of money on these types of transactions, so it’s probably never going to be illegal.
The Takeaway:
If you , the tenant, are in a relationship with a broker who also represents the landlord, then you lose. When it comes to picking between the landlord and tenant they will 90% of the time take sides with the landlord because they get a bigger commission check. One thing we take pride in is our unwavering commitment to tenants, no matter what the commission check says. As the only tenant rep only brokerage in NYC we do things differently. We care about our clients and find them the best spaces for the best prices.
Contact Us:
Please reach out to our founder, Bert Rosenblatt at brosenblatt@vicuspartners.com, or at (917) 862-8820 to see if we can answer any questions or get started finding you the right space solution.