Conflicts of Interest in the Field of Tenant Representation

The role of a tenant representative is to represent an occupier in legal and financial matters that regard the occupier’s premises. Companies in the tenant representation industry are commonly providing not only tenant representation, but also various other services within the field of realestate.

Conflicts of interest can appear when the same tenant representation company works with not only occupiers but with landlords as well. Conflicts can also appear when providing several separated real estate services if the tenant representation companies choose to carry through the services in ways that are the most profitable for themselves, but not for its clients.

A principal-agent problem might occur when there is asymmetric information to the advantage of the  tenant representative. The thesis can be viewed as an international analysis, which seeks to investigate how tenant representatives perceive conflicts of interest, and how they manage such conflicts if they appear.

These are questions that has to be answered in order to determine the importance of conflicts of interest within the industry, which is why interviews with key persons in major global tenant representation companies has been carried through, in person as well as over the phone.

These interviews are the foundation for the results of this thesis in combination with responses from a survey that was performed among people in the tenant representation industry. The importance of conflicts of interest in the field of tenant representation varies across the world. The size of the company client will also determine how conflicts of interest are prioritized for the client.

While most in the industry seem to agree that conflicts of interest do exist in the field of tenant representation, there seems to be disagreement regarding whether or not such conflicts can be managed, and if they present an issue.
Source: KTH
Author: Cronsioe, Jesper

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