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Who Really Pays Commercial Real Estate Brokers' Commissions?

Traditionally, commercial landlords have cut commission checks to real estate brokers when lease transactions are completed, whether those brokers represented the landlords or the tenants. Landlords proclaim that because they cut commission checks, using their own funds (or, funds provided by their...

By Andrew B. Zezas | Updated on February 16, 2010

Traditionally, commercial landlords have cut commission checks to real estate brokers when lease transactions are completed, whether those brokers represented the landlords or the tenants. Landlords proclaim that because they cut commission checks, using their own funds (or, funds provided by their lenders), that they pay commissions. That’s a logical argument. Many landlords believe that because they don’t receive value from brokers or advisors who represent tenants, that tenants should pay the commissions due their representatives.

In contrast, many tenants believe that because landlords only cut commission checks when tenants sign leases, and that since landlords expect to be reimbursed for commissions through tenant rental payments, in actuality it is the tenants who really pay all commissions, not just those due their representatives.

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