Conflicts of Interest in Lease Transactions
A conflict of interest exists, when a person or business has more than one financial or other interest and serving one of those interests may work to the detriment of another party. A conflict exists when two interests are in direct conflict with each other and there is a risk that the professional judgment or action of a party will be unduly influenced or compromised.
Conflicts of interest are very common and are not illegal, but they must be fully disclosed and approved by each party having an interest.
A common example is when a person sees a for-lease sign on a building, calls the agent, and allows the agent, who represents the building owner, to represent him or her.
That agent may tell you he or she will look out for you but the truth is: (1) The agent is getting paid by the building owner, (2) The agent is the agent of the building owner, (3) The agent is hoping to get continuing business and income from the building owner, and (4) You probably represent a once in a lifetime transaction to the agent.
You should also be aware that the lease you are being asked to sign by the building owner's agent was probably drafted by the owner's attorney to protect the owner, not you.
The agent for the owner is not going tell you there are better lease terms available at other nearby buildings and is not going to volunteer any concessions that may be available.
When you rely on the building owner's agent you will be subjected to a major conflict of interest that is likely to benefit the building owner, not you.
This is precisely why commercial tenants need to be represented by a tenant leasing representative. It costs you nothing and protects your interest.