Tenant representation vs. landlord's agent: who is really looking after your interests

Tenant representation is an advisory model in which a firm works exclusively in your interest and never works for building owners. That distinction sounds like a detail, but in practice it decides how much you pay for your office over the next 5-10 years. Because at the negotiating table only one question really matters: does the person advising you on your lease terms also earn money from the other side of the very same deal?

On most transactions in the Polish office market, the answer is yes. And this is not a fringe of the market - it is its dominant model. So let's go through it step by step: how tenant representation differs from a landlord's agent, why combining them creates a conflict of interest, what research and regulators around the world say about this model, and - most importantly - how to check in five minutes which side your advisor is really on.

1Two different roles that are easy to confuse

A landlord's agent (landlord representation) works for the building owner. Their job is to lease the space: as many square metres as possible, as fast as possible, on the best possible terms for the owner. The higher the rent and the fewer the incentives for the tenant, the better they have done their job.

A tenant advisor (tenant representation) works the exact opposite way: their goal is the lowest real cost of occupying space, the largest incentive package, the greatest lease flexibility and protection of the tenant's interests in the clauses few people read at signing. These two goals are directly opposed - every zloty the tenant saves is a zloty the owner does not earn.

The problem starts when one firm tries to play both roles at once. The industry calls this dual agency - and that is the heart of the matter.

2Dual agency: where the conflict of interest is born

Dual agency is a situation in which the same advisory firm represents both the tenant and the building owner in a single lease transaction. In theory the firm declares it will serve both sides diligently. In practice - you cannot negotiate the lowest and the highest price for the same space at the same time.

The mechanism of the conflict is purely economic and has nothing to do with the bad faith of any individual consultant. It comes down to who is the more important client for the advisory firm:

• The building owner is a repeat client. They lease space year after year, commission property management and, one day, will sell the building - through the same firm too. It is a relationship worth millions, continuous and critical to the agency's revenue.
• The tenant is a one-off transaction. They negotiate a lease once every 5-10 years. When interests diverge, the firm instinctively protects the relationship that earns more - and that is almost never the tenant.

This is not a marketing opinion. In 2022 a US federal court (a case involving JLL), through Judge Florence Pan, described dual representation as "inherently suspect":

3What regulators and research say

The Western world stopped treating dual agency as the norm long ago. Three facts from three different legal systems:

• RICS - a global standard. The Royal Institution of Chartered Surveyors, the body that accredits real estate professionals worldwide, has since 1 January 2018 prohibited its members from representing both sides of a transaction without informed consent. In practice the UK has effectively eliminated this model from commercial real estate.
• The Supreme Court of California (Horiike case, 2016). Held that agents of the same firm owe fiduciary duties to both sides, and described the structure itself as "inherently suspect".
• Academic research. In the "Journal of Real Estate Finance and Economics" (Gardiner et al., 2007), dual agency was shown to lower the financial outcome for the represented party by about 8% before disclosure of the conflict became mandatory, and still by about 1.4% afterwards. The conclusion: merely disclosing the conflict reduces the problem but does not remove it.

Interestingly, the industry itself is critical. In a study cited by the Consumer Federation of America, 26% of brokers considered dual agency "unacceptable" and another 32% "undesirable" - meaning 58% of practitioners view the model negatively.

4Who represents both sides in Poland

In Poland dual agency is legal and remains the market standard. The "full-service" model, in which one firm has both a landlord representation and a tenant representation arm, is used by all the largest international agencies present here: JLL, CBRE, Colliers, Cushman & Wakefield and Savills. Each of them, at the same time, leases space on behalf of owners and advises tenants who negotiate that space.

The same applies to some large firms with Polish roots. Walter Herz openly offers both tenant representation and landlord representation. Knight Frank Poland states plainly that its agency team represents "both building owners and tenants". BNP Paribas Real Estate Poland operates on a similarly full-service basis. In each case the tenant has no way of verifying whether the person advising them is not also working, in parallel, to lease them space on behalf of its owner.

What is notable - the problem is recognised by industry figures in Poland themselves. In a widely-read "Rzeczpospolita" article on dual agency, the verdict was unequivocal:

Very few firms operating in Poland work exclusively in the tenant representation model - and Brookfield Partners is one of them. It means one structural decision: giving up an entire revenue stream from building owners so that there is never a side to choose.

5How the competition itself justifies the exclusive model

The best proof of how strong this argument is comes from the firms that have chosen the model. Cresa - the world's largest advisory firm providing agency services exclusively to tenants - explains its advantage plainly: it operates "free from the risk of a conflict of interest, because it does not represent developers either in leasing space or in property management". In their narrative the result is not even a lower price, but something more important - "the client's certainty that the firm stands entirely on their side".

This is exactly the logic Brookfield Partners is built on. Since we have no client on the landlord's side to lose by fighting for better terms for you, every analysis, recommendation and decision is made solely in your interest.

That raises a question: if the argument is so strong, why don't the Big Five abandon it? An industry report by Bisnow (2022), featuring among others Professor Peter Smirniotopoulos of George Washington University, points to purely commercial reasons. Smirniotopoulos put it bluntly: large firms "are not at all willing to give up what would easily be hundreds of millions, if not billions, of dollars a year". Add to that market consolidation (in the US around 90% of the commercial market is in the hands of five firms) and the asymmetry already mentioned: the owner is a relationship for years, the tenant an episode. The model survives not because it serves tenants, but because it is extremely profitable for the agencies.

6How to check which side your advisor is on

You don't need to know real estate law to verify this. A few specific questions before you sign with an advisor are enough:

• Does this firm also represent building owners or lease space on their behalf? If so, your transaction may involve a conflict of interest - even if a "different department" handles you.
• Does the firm manage properties or advise owners on building sales? That signals where its repeat revenue really lies.
• Who pays the advisor, and on what basis? Ask for a clear, written statement of the fee and the side it represents before any talks with landlords begin.
• Will the advisor pass on to you everything they learn from the building owner? An advisor working exclusively on your side can say "yes" without hesitation. A conflicted party cannot.

Summary

Tenant representation and the work of a landlord's agent are two opposing roles. When one firm performs both, the tenant loses the most important asset they have in negotiations: an advisor who tells them everything and has nothing to lose on the other side. RICS rules, US court rulings and academic research all show that this conflict cannot be "managed" - it can only be eliminated at the source, by refusing to represent owners.

That is a structural choice, not a marketing one. So before you sit down to negotiate a lease, ask your advisor that one question about the other side of the table. Their answer will tell you more than any pitch deck.

Want someone at the table who stands exclusively on your side? Get in touch.

Filip Sarzyński Partner [email protected]