The age-old biblical adage, “No man can serve two masters; for either he will hate the one and love the other …” certainly holds true today in the secular world of commercial real estate where it is being ignored en masse.

Neither state law nor common sense has dealt in any meaningful way with the “dual agency” paradox that suggests somehow, some way, one broker can equally serve both the landlord and tenant in a leasing transaction. Those who engage in this practice, in effect, prey upon the lack of knowledge tenants have about the inherent conflicts of interest in dual agency situations and the fact that they are more focused on wrapping up a deal to lease the space they need in as little time as possible. Problem is, though, they will have to live with the consequences of whether or not their interests were represented all that well for a long period of time — five to ten years in most leasehold arrangements.

What makes dual agency problematic is, in fact, the “dirty truth” that most brokers who represent landlords hope tenants never understand. Many, if not most, commercial real estate brokers make their money by representing landlords. Their fiduciary obligations are to the landlord — the party paying the commission. Their sole job is to fill vacant space and keep existing tenants in their landlords’ buildings. Their goal to achieve the highest rent obtainable and to give away as little as possible in the way of concessions and benefits to tenants. If they do a good job, they will retain the listing for the building and even gain referrals to other landlords.

Certainly, there’s nothing wrong with doing a good job for one’s landlord client. The landlord, however, is only half the lease transaction equation. The other half is sitting across the negotiations table as the prospective tenant — all too often with only the landlord’s broker there to “represent” both sides.

The question you’ve no doubt asked by now is intuitively obvious: “How can a broker whose primary responsibility it is to drive the best bargain for his landlord client also obtain the best deal for the tenant?”

The answer is equally obvious: There’s no way. The landlord’s broker cannot fairly represent both sides. Think about it; can an attorney or his or her law firm represent a party in a lawsuit while also representing the other side? The state bar, for one, doesn’t think so. Neither does anybody else with any sense of fairness.

The whole notion of dual agency ignores the distinct roles and interests separating landlords and tenants. Good landlord agents work with sophisticated building owners who well understand and demand leasing reports, absorption studies and the like, and who demand their brokers spend the majority of their time and energy selling the specialized attributes of their buildings.

Tenants need a broker who spends his or her time and skills understanding the specific needs of clients and filtering through all the available space to help them determine the best overall deal, regardless of who owns the building and is paying the commission.

Yet another problem for tenants arises when they try to deal directly with the landlord’s broker without benefit of being represented by a separate broker who only has their best interests at heart. The theory seems to be that if they deal directly with the landlord, they’ll save money.

What they don’t realize in most cases is that the commission the landlord pays is essentially the same, whether or not there are one or two brokers involved in the transaction. That means the landlord broker’s commission increases significantly, if not doubles, if the tenant does not hire his or her own broker to negotiate the deal. You think just maybe the landlord broker might get a little pushy in persuading tenants not to “bother” getting their own broker?

Real estate transactions are fraught with disclaimers and disclosures about all sorts of issues that impact real estate values. And yet, there’s no requirement, legal or otherwise, that compels a landlord’s broker to disclose the financial gains that would accrue to the broker if there are no tenant representative.

Dual agency — serving two masters — has long been a major problem for commercial space tenants seeking fair lease terms. Until state regulations — or heightened personal ethics — are put in place to control the abuses brought about by this patently unfair practice, tenants will need to take the initiative on their own to seek out and retain a broker who specializes in representing tenants to even out the playing field at the bargaining table.

That narrows the field of brokers considerably.