The landlord normally lists space with a broker who looks for tenants (called the listing agent). If the space is leased, the broker gets a commission - usually 3% of the rent paid over the life of the lease excluding extensions and renewals.

If a nonlisting broker brings in a tenant and a lease is signed, the two brokers split the commission. The listing broker is the landlord’s agent — his or her primary duty is to look after the landlord’s interest.

Tenants should be clear about which type of broker they are working with to understand whether the broker is legally obligated to advance their interests. Oregon law requires brokers to provide tenants a written disclosure statement disclosing what role they have.

Tenants may wish to find a broker who works with tenants exclusively. The trade organization of commercial real estate brokers in Oregon and Southwest Washington is the Commercial Association of Realtors (CAR) and in Washington State it is Commercial Brokers Association (CBA).

“Tenants only” brokers may have more ideas and energy to work on behalf of tenants. This also avoids the scenario that occurs when the tenant’s broker is showing a property to the tenant which is listed by the broker’s leasing company.

Brokers may also be available as “dual agents” and their role is limited to the documentation of the technical aspects of the transaction.

Tenants engaging a broker should consider the method of payment; whether the broker has an “exclusive” or “nonexclusive” arrangement; potential conflict of interest issues; and the services that will be provided. Brokers may agree to a number of differerent payment agreements: commission, flat fees, fee based on success, and an hourly fee.

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