Last month GlobeSt.com, a national real estate website, published an article by Carrie Rossenfeld discussing a recently passed California Bill regarding agency disclosure requirements for commercial real estate transactions. The premise of SB 1171 is as follows, “Effective January 1, 2015, commercial real estate salespersons and brokers will need to provide, in writing, their exact proposed agency role in the future transaction. In addition, this disclosure will need to be signed by the potential client prior to moving forward with any representation.”
How will this affect you as a tenant leasing space? Let’s answer that question using an hypothetical example. You’re current lease is a about to expire and you will probably stay at your current location, but you want to see what else might be available. What seems like the path of least resistance is to contact the agent whose name is all over your building, on a sign out front, on the lobby directory and maybe even in the elevator. That individual might have even contacted you recently to say your lease is expiring soon. This person is the listing agent who is hired by the owner of your building to market space and find tenants for their client (the building owner).
The new law will require that individual to state in writing their agency relationship with the landlord. They represent the landlord’s interests which is to get you to renew your lease at their building in order to maintain or increase occupancy. Let’s take the example a little further, say the listing agent is good and represents two more buildings in the area. Their contractual obligation is to find tenants for their landlord clients. In any of these scenarios it will be disclosed the agent’s relationship and fiduciary responsibility is to the landlord(s). As such it is difficult to imagine a situation where you as a tenant should feel comfortable that your best interests are the priority of that particular agent. Why not have a professional real estate adviser represent only your specific interests? How do you know that will be the case? Because thanks to SB 1171 you will have disclosure documents signed by that individual stating they are exclusively representing you and no one else (read, landlords) . That is tenant representation and at Botticelli Realty Advisors, it’s all we do. What does it cost to have an agent representing only your company’s best interest? Answer, there is no additional cost to our clients for our services.
So, if there’s no additional cost to you to have an experienced professional represent only your interests, why not give it a shot? I promise you will get a better lease agreement with Botticelli Realty Advisors on your side. We bring over 40 years of combined experience exclusively representing tenants. Our experience, market expertise and aggressive negotiating strategies ensure we get the best deal possible for our clients. Please feel free to contact me at (760) 445-9908 if you have any questions regarding your lease or the details of the new disclosure law SB 1171.