July 15, 2025

What to Look for in a Tenant Representation Agreement

A tenant representation agreement is a vital contract that outlines the relationship between a commercial real estate client—whether a buyer or tenant—and their brokerage. If you’re investing in or leasing commercial property, working with an experienced real estate brokerage under a buyer/tenant representation agreement ensures your interests are protected throughout the process.

A qualified broker will not only help you identify suitable spaces but also handle negotiations, due diligence, and lease or purchase terms. But what should be included in an exclusive tenant representation agreement? Below are three essential components you should always review.

An Outline of Services and Responsibilities

The foundation of any buyer/tenant representation agreement is a clear scope of services. This section details what the representative will do on your behalf, including:

• Identifying appropriate commercial properties
• Coordinating property tours and site visits
• Conducting market research
• Negotiating lease or purchase terms
• Assisting with due diligence and contract review 

It should also outline the obligations you, as the client, agree to uphold—most notably, that you’ll work exclusively with that brokerage during the term of the agreement.

Clarity in roles and expectations helps prevent miscommunication and ensures both parties are aligned. A thorough outline of services gives you peace of mind knowing that your broker is actively working toward your best interests, whether you’re leasing office space or buying a retail property.

Commission Rate and Compensation Terms

Compensation is a critical aspect of any buyer or tenant representation agreement. Most agreements will include the commission rate that the representative expects to earn if a transaction is completed.

In commercial real estate, it’s typical for the seller or landlord to cover the commission for both the listing and tenant/buyer representatives. However, your agreement should specify:

• What happens if the property owner does not pay your broker’s commission
• Whether you would be responsible for any portion of the fee
• How compensation is handled in dual agency situations

Even if you don’t anticipate paying directly, having these terms in writing can help avoid surprises down the road. A well-crafted buyer representation agreement ensures that compensation terms are transparent, fair, and legally binding.

This section may also define the broker’s fiduciary duties—which include loyalty, confidentiality, and full disclosure—so you understand the level of trust and responsibility involved.

Length and Terms of the Agreement

A tenant representation agreement is typically an exclusive contract with a set duration. The length may vary depending on your timeline, the complexity of your search, and the local commercial market, but most agreements range from 3 to 12 months.

This section should specify:

• Start and end dates
• Conditions for early termination
• Whether the agreement automatically renews
• Any post-agreement protections for the broker, such as procuring cause clauses 

Exclusivity is standard in these agreements. In return, your broker is committed to prioritizing your search and negotiations. As the client, you agree not to work with other brokerages during the term. If you’re unsure about the duration, ask your broker to explain their reasoning based on your goals.

Other Key Considerations

Beyond the core terms above, you may want your representation agreement to address a few additional items:

• Geographic scope – Will the broker represent you in specific cities or across an entire region?
• Type of properties – Are you searching for office space, industrial warehouses, medical buildings, or retail storefronts?
• Dual agency disclosure – If your broker also represents the seller or landlord, how will potential conflicts of interest be handled? 

Understanding these elements up front ensures that your broker is aligned with your needs and has the expertise to deliver results.

Why a Strong Agreement Matters

Partnering with a commercial real estate broker through a formal agreement creates a foundation of trust, accountability, and legal clarity. Without a written agreement, you risk losing out on dedicated support and negotiated advantages.

A well-drafted tenant representation agreement can:

• Protect your financial and legal interests
• Strengthen your position during negotiations
• Clarify who is responsible for what in the process
• Prevent disputes or misunderstandings

Before signing, take time to review the agreement with your broker and ask questions about anything that’s unclear. A reputable brokerage should be transparent, collaborative, and willing to tailor the agreement to your needs.

Looking for a trusted partner in your commercial real estate search? RakowGroup specializes in buyer and tenant representation across New York, Connecticut, and New Jersey. Contact us today to review our buyer/tenant representation agreement and get expert guidance every step of the way.