Tenant vs. Landlord Representation: What's the Difference and Why It Matters

Walk into a commercial listing without a tenant rep broker and you are negotiating against someone whose legal job is to get the landlord the most money. The listing broker is bound by contract and, in Massachusetts, by common law fiduciary duty to serve the property owner's interests, not yours. This is not adversarial. It is just how the relationship is built. Understanding it is the difference between negotiating on even footing and leaving money on the table.

Here is how the two sides of commercial real estate representation work, how each one gets paid, and when you should use each. I have added the specifics for the Worcester and Central Massachusetts market.

What a listing broker actually does for the landlord

The listing broker is hired by the property owner to market the space, find qualified tenants, negotiate lease terms, and close the deal. Here is the work:

Marketing the property. Building the listing materials, posting to the commercial databases (CoStar, LoopNet, Crexi), calling around to other brokers, and running the signage. The listing broker controls how the property shows publicly and is the first person an inquiry reaches.

Qualifying tenants. Sizing up a prospective tenant's financials, credit, and how solid the business is. The listing broker tells the landlord which tenants are an acceptable risk and which ones need more security, like a personal guarantee, a larger deposit, or a shorter term.

Negotiating for the landlord. The listing broker's job is to get the property owner the best terms, period. That means pushing base rent up, keeping concessions down (free rent, TI allowances), protecting the landlord with strong lease language, and structuring the lease so the property holds its value for a future sale.

Confidentiality. The listing broker cannot tell a prospective tenant the landlord's motivations, financial position, competing offers, or bottom line. If the landlord told the broker they will take $16/SF but to open at $22/SF, the listing broker has to protect that number.

What the listing broker owes you as the tenant

The listing broker has a fiduciary duty to the landlord, not to you. But even with no fiduciary relationship, the listing broker still owes you:

• Honesty: No material misrepresentations about the property
• Disclosure of known defects: Environmental issues, pending litigation, code violations
• Fair dealing: No fraud or deception in the negotiation

What the listing broker does not owe you: advice on whether the lease terms are any good, disclosure of other offers, a recommendation to hire an attorney, or any advocacy for your side of the deal.

What a tenant rep broker does for you

A tenant rep broker is hired by the tenant, or in most cases brought in through a cooperative commission split with the listing broker, to represent the tenant's interests only.

Market search and analysis. The tenant rep finds every available property that fits your requirements, including off-market space that never shows up on the public sites. In Worcester County, off-market availabilities run an estimated 15-25% of the total inventory at any given time, especially in industrial and flex space where landlords may prefer to make a few calls rather than list publicly.

Comparable lease analysis. Your tenant rep pulls recent lease comps in the submarket to figure out what similar tenants are actually paying, not what landlords are asking. That data is the foundation of every negotiation. A landlord asking $22/SF for Class B office in Auburn has little leverage if comparable recent deals closed at $17-$19/SF.

Lease negotiation. The tenant rep negotiates for you with a fiduciary duty to your interests. That means pushing for lower base rent, higher TI allowances, longer free rent periods, better escalation structures, CAM caps, assignment flexibility, and less personal guarantee exposure. What the tenant rep knows about market conditions, standard lease terms, and how a given landlord negotiates turns directly into dollars saved.

Lease review coordination. Your tenant rep runs the lease review with your attorney, flags the non-standard or punitive clauses, and manages the back-and-forth on the lease language. That usually runs 3-5 rounds of revisions over 2-6 weeks.

What your tenant rep owes you

A tenant rep broker owes you the same fiduciary duties the listing broker owes the landlord:

• Loyalty: Your interests come first, ahead of the broker's commission or their relationship with the landlord
• Confidentiality: Your budget ceiling, your urgency, and your alternatives stay protected
• Full disclosure: All material facts about the property, the market, and the deal
• Obedience: Following your lawful instructions
• Reasonable care: Real competence in market analysis, negotiation, and lease review

How brokers get paid

The most common wrong idea in commercial leasing is that tenant representation costs the tenant money. In the vast majority of deals, it does not.

Standard commission structure

The landlord's listing agreement sets a total leasing commission, usually 4-6% of the total lease value (base rent times the lease term). That commission gets split between the listing broker and the tenant rep, usually 50/50, though the split varies by market and property.

Example: A 5-year lease on 3,000 SF at $20/SF is a total lease value of $300,000. At a 5% total commission, the landlord pays $15,000, split $7,500 to the listing broker and $7,500 to the tenant rep. The tenant pays nothing.

When the tenant might pay

In rare cases, usually off-market deals where the landlord has no listing agreement and no commission budget, the tenant rep may charge the tenant directly. That should be laid out upfront and agreed to in writing before the broker does any work. In Worcester County, this is less than 5% of commercial lease deals.

Does the landlord raise the rent to cover the tenant's broker commission?

Fair question, and the answer has a wrinkle to it. The total commission is built into the landlord's leasing budget whether or not a tenant rep is involved. If you skip the tenant rep, the listing broker usually keeps the whole commission. The landlord does not lower the asking rent because you showed up alone. All you did was give up the advocacy that the commission was there to pay for.

Dual agency: when one broker sits on both sides

Dual agency is when a single broker or brokerage represents both the landlord and the tenant in the same deal. In Massachusetts, dual agency is legal with informed written consent from both parties. But legal does not mean ideal.

The built-in conflict

A dual agent cannot fully go to bat for either party. The broker cannot tell the tenant to push harder on rent while telling the landlord to hold firm. The broker cannot share the landlord's bottom line with the tenant or the tenant's budget ceiling with the landlord. The fiduciary duty to both parties collapses into a duty of fairness and impartiality, which is a lot less than the full advocacy either side would get from its own broker.

When dual agency is fine

• Very small deals where the economics do not justify two brokers
• Deals where both parties have their own attorney reviewing the lease
• Properties with few alternatives where the listing broker holds the only space that fits the tenant

When to avoid dual agency

• Leases with total values over $100,000, where the stakes justify dedicated representation
• Complex deals with TI buildouts, unusual lease structures, or several competing properties
• Tenants new to commercial leasing who need guidance on market rates and lease terms

If you land in a dual agency situation, insist on your own attorney reviewing the lease and go in knowing the broker's advice is limited by their duty to both sides.

The Massachusetts specifics

Commercial real estate practice in Massachusetts has a few features tenants should know.

No mandatory agency disclosure form. Unlike residential deals, Massachusetts does not require commercial brokers to hand you a written agency disclosure form. The agency relationship can form verbally, by conduct, or in writing. Put it in writing so there is no ambiguity.

Common law fiduciary duty. Massachusetts courts recognize common law fiduciary duties for commercial real estate agents. A broker who takes on acting for you, even without a written agreement, can be held to fiduciary standards. But without that written agreement, proving the scope of the relationship gets hard if a dispute comes up.

Procuring cause disputes. In Massachusetts, the broker who is the procuring cause of the deal is owed the commission. If you first tour a property with the listing broker, then bring in a tenant rep who negotiates the lease, a commission fight can start. Engage your tenant rep before you tour anything to head this off.

License requirements. Every commercial real estate broker in Massachusetts has to hold an active real estate license from the Division of Professional Licensure. Check your broker's license status at the Massachusetts Board of Registration of Real Estate Brokers and Salespersons.

When you need a tenant rep

Not every deal needs a tenant rep. But the situations where one adds the most value are the same situations where most tenants go without one.

You need a tenant rep when:

• You are leasing 1,000+ SF for 3+ years (total commitment over $50,000)
• You have not negotiated commercial leases before
• You are comparing several properties across different submarkets
• The lease involves a real TI buildout or complex terms
• You need off-market options or wider market coverage

You may not need a tenant rep when:

• You are renewing an existing lease with few changes
• You are leasing month-to-month or for under 12 months
• You are an experienced commercial tenant with in-house real estate people

How to pick a tenant rep broker

Not every broker earns their keep. When you are weighing a tenant rep for a Worcester-area lease, look for:

• Local transaction history: Ask for recent lease comps they have negotiated in your target submarket
• Property type expertise: Industrial, office, and retail leasing each take their own knowledge
• No conflicts of interest: Confirm the broker does not also list the properties you are looking at
• References from past tenants: Talk to businesses the broker has represented
• Willingness to put fiduciary duty in writing: A broker who means it will sign a tenant representation agreement

Lornell Real Estate handles tenant and landlord representation across Worcester County and Central Massachusetts. Whether you are after industrial space in Worcester, retail space on the Route 9 corridor, or office space downtown, we bring 35 years of local market knowledge to every deal. Call (774) 745-0015 or email [email protected] to talk through what you need.

Sources & References

• Massachusetts Division of Professional Licensure
• CBRE (tenant representation impact studies)
• National Association of Realtors (commercial brokerage surveys)
• Lornell Real Estate transaction data

This article cites data from the sources listed above. For the most current figures, consult the original publications directly.

Data current as of publication date. Market conditions, rates, and regulations may have changed. Consult a qualified commercial real estate professional before making investment decisions.