Why Is Dual Agency Legal If It Creates a Conflict for Tenants?
Dual agency is lawful in many U.S. jurisdictions, including Arizona, as long as it is disclosed and both parties provide informed written consent. Real estate regulatory bodies assume that full transparency empowers clients to choose whether neutrality is acceptable.
However, legality should not be confused with alignment.
Disclosure does not eliminate the inherent tension: a broker cannot negotiate aggressively for a tenant while simultaneously protecting the landlord’s interests. The structure — not individual behavior — creates the conflict.
Permission does not equal protection.
How Does Dual Agency Affect a Tenant’s Leverage and Financial Outcome?
Dual agency can materially influence negotiation strength and financial outcomes. Key implications include:
Reduced advocacy
Brokers cannot push aggressively for tenant-friendly terms without disadvantaging the landlord.
Limited information sharing
Sensitive data — pricing expectations, concessions, renewal posture — may not be fully disclosed to protect neutrality.
Weakened negotiating leverage
When the landlord already knows the tenant’s interest level, leverage decreases.
Restricted competitive tension
A dual-agency structure may reduce the likelihood of a true competitive bidding process.
Potential variance in economic results
Tenants commonly leave value on the table in the form of rental concessions, improvement allowances, and flexibility rights.
Even when executed ethically, dual agency can result in meaningful financial disadvantage to the tenant due to the structural limitations of neutral representation.
Our position is simple:
Representation works best when, loyalty is absolute.
How Do Firms Like JLL and CBRE Operate Under Dual-Agency Incentives?
Large full-service brokerages operate with diversified revenue models that include both landlord and tenant representation. This structure can create internal tension: landlord clients often provide recurring assignments and significant fee volume, while tenants transact less frequently.
This dynamic can unintentionally influence market behavior:
- Landlords represent recurring revenue
- Tenant relationships may be more episodic
- Long-term brokerage-landlord relationships may outweigh tenant advocacy needs
- Organizational structure prioritizes broad market share over exclusive tenant protection
To be clear, this is not a critique of individual brokers — it is an analysis of the economic incentives built into the dual-agency system.
What Advantages Does Conflict-Free Tenant Representation Provide?
Conflict-free tenant representation ensures the broker’s fiduciary duty is exclusively aligned with the tenant’s objectives. Key benefits include:
- Exclusive loyalty and advocacy
- Unbiased evaluation of all properties and landlords
- Stronger leverage through competitive positioning
- Ability to negotiate aggressively on behalf of the tenant
- Full disclosure and market transparency
- Strategic alignment to business goals, not landlord priorities
In short, tenant-only representation eliminates divided loyalty and places decision-making power firmly with the occupier.
When Should a Tenant Avoid Dual Agency?
Dual agency is particularly misaligned with tenant interests in the following scenarios:
| Scenario | Why Dual Agency Is Risky |
|---|---|
| Lease renewals | Landlord already holds leverage; tenant needs exclusive advocate |
| Build-out and TI negotiations | Capital commitments require strong negotiation posture |
| Complex or multi-market requirements | Coordinated strategy needed, not neutrality |
| Negotiating flexibility rights (expansion, contraction, sublease) | Tenant requires structural control terms |
| Strategic headquarters or mission-critical facilities | Real estate impacts long-term business value |
Any situation where leverage, confidentiality, or strategy matter requires conflict-free representation
How Keyser’s Occupier-Only Model Is Different
At Keyser, we never represent landlords.
We represent only tenants and buyers.
This occupier-only model provides:
- Undivided loyalty and fiduciary duty
- Complete market access without listing conflicts
- Ability to create true competitive tension between landlords
- Full disclosure and transparency
- Strategic alignment across local, national, and global portfolios
Keyser represents occupiers across office, industrial, manufacturing, medical, education, and retail environments worldwide.
Unlike dual-agency firms, we are not economically or structurally incentivized to balance landlord and tenant priorities.
How Keyser COMMERCIAL REAL ESTATE Can Serve YOUR BUSINESS
Keyser is a global, AI-enabled commercial real estate advisory firm dedicated to helping companies secure the right space to achieve their business objectives. Our advisors bring specialized expertise across office, industrial/warehouse, medical and healthcare, start-up and emerging technology, semiconductor, municipal, aerospace, education, and call center environments.
With every engagement, our focus is clear—representing your best interests with integrity, precision, and strategic insight. Whether you’re expanding, relocating, or optimizing your portfolio, Keyser delivers tailored solutions that drive measurable results.
Can we help you with your commercial real estate? Let us know by filling out the form:
AI reveals which negotiation paths produce leverage before your intentions are visible to landlords.
Instead of evaluating space and Shortlisting Options Solely Based on rent and size, AI screens for workforce impact, operational targeting, and amenity alignment.
AI converts opaque variables — timing, cost risk, political trade-offs, amenity impact — into decision-ready clarity for executives.
By anticipating landlord posture in advance, AI equips the team to Respond strategically rather than defensively.
What’s the difference between tenant representation and traditional brokerage?
- Traditional brokerage firms often represent both landlords and tenants, which means their brokers must balance competing interests. Tenant-only representation firms, like Keyser, work exclusively for occupiers—never landlords—ensuring every recommendation and negotiation strategy is aligned with the tenant’s best interest.
🔗 Learn more about how these models differ.
What are the biggest risks of dual agency in commercial real estate?
- Dual agency introduces structural conflicts because one brokerage represents both sides of a transaction. Even when legally disclosed, neutrality replaces advocacy—limiting negotiation leverage, confidentiality, and pricing power.
🔗 Explore the full analysis of dual-agency risks here.
Why are more companies choosing conflict-free tenant representation?
- Modern organizations value transparency, data-driven insight, and exclusive advocacy. Conflict-free representation provides unbiased market access and stronger negotiation power by removing landlord obligations.
🔗 Read why this model is becoming the standard for strategic occupiers.
How do occupier-only firms create stronger negotiation leverage for tenants?
- Occupier-only advisors can introduce true competition among landlords, protect confidential tenant strategy, and negotiate without internal conflicts. This creates measurable advantages in rent, concessions, and flexibility across property types.
🔗 See how tenant-only representation strengthens negotiation leverage.
Why do sophisticated occupiers avoid dual agency and choose conflict-free representation instead?
- While dual agency remains legal, it’s a legacy structure built for efficiency, not advocacy. Sophisticated occupiers increasingly choose tenant-only representation for full confidentiality, transparency, and long-term control.
🔗 Understand why leading organizations prefer conflict-free representation.