A tenant representation agreement is a written contract in which a commercial tenant hires a broker to represent it, and only it, in finding space and negotiating a lease. It spells out the broker’s duties, the area and type of space covered, how long the agreement lasts, whether it is exclusive, and how the broker is paid. In most commercial leases, the landlord pays the tenant’s broker by sharing the leasing commission, so the tenant usually pays nothing out of pocket. The agreement should say what happens if a landlord will not pay. In Illinois, a written agreement is required before a broker begins working for a tenant.
This article is general information, not legal advice. Your written agreement controls, so read it carefully and talk with your attorney about specific questions.
What the agreement covers
- The parties and the role. The broker represents the tenant, not the landlord.
- The scope. The type of space, the size range, and the market area, such as industrial space in Lake County, Illinois or office space in the northern suburbs.
- The term. Often six months to a year, sometimes with an option to extend.
- Exclusivity. Whether the tenant agrees to work only with this broker for the covered search.
- The broker’s duties. Market surveys, tours, requests for proposals, comparing offers, negotiating the lease, and coordinating with your attorney.
- Compensation. How the broker is paid, by whom, and when.
- The protection period. How long after the agreement ends the broker is still owed a fee if you lease a building it showed you.
- Termination. How either side can end the agreement.
Who pays the broker
In most commercial leases, the landlord pays. The landlord agrees to a leasing commission with its own broker, and that commission is shared with the tenant’s broker. The tenant does not write a check.
There are exceptions, and a good agreement addresses them:
- A landlord without a broker may not have agreed to pay a commission. Your broker usually negotiates the fee into the deal.
- A landlord that refuses to pay leaves a gap. The agreement should say whether the tenant owes it, and many tenants negotiate that they never do.
- Consulting work such as lease audits, renewals where the tenant stays put, or advisory work with no new lease is sometimes billed directly.
- Buying instead of leasing. If the search turns into a purchase, the seller usually pays, but the agreement should cover it.
Does having a broker raise my rent?
Generally no. Landlords budget leasing commissions into their costs whether or not the tenant has its own broker. A tenant without representation often pays the same rent and simply has no one negotiating on its side. A good tenant broker usually saves far more than it costs the landlord by finding options you would not see, creating competition between buildings, and negotiating free rent, improvement allowances, and lease terms.
Why tenants sign an exclusive agreement
- Landlords take you seriously. One broker speaking for you shows you are a real, organized tenant.
- No crossed wires. Several brokers calling the same landlords about the same requirement weakens your position.
- Full market coverage. An exclusive broker can invest time in finding off-market and sublease options, not just listed space.
- Confidentiality. Your broker can approach landlords without naming you until you are ready.
What Illinois law requires
- A written agreement. Since January 1, 2025, the Illinois Real Estate License Act requires a written brokerage agreement when a broker begins working for a client, including commercial leasing.
- Compensation disclosure. The broker must disclose what it will be paid and any amount it may pay to a cooperating broker.
- Dual agency only with consent. If your broker’s firm also represents the landlord, Illinois requires your informed written consent before the firm can act for both sides. Ask about it up front.
What to check before you sign
- That the agreement says the landlord is expected to pay, and what happens if it does not
- A term and protection period that match your timeline
- A clear way to end the agreement if the service falls short
- How the firm handles buildings it also lists for landlords
- Exactly which locations and property types are covered
Work with a tenant representative
The Van Vlissingen and Co. tenant representation team represents office, industrial, and retail tenants across Lake County, Illinois, the northern and northwest suburbs, and Southern Wisconsin, under clear written agreements. For current market conditions, see the daily-updated RFP Chicagoland Commercial Real Estate Index, or see what tenant improvement allowance to expect.
Frequently asked questions
Do tenants pay for a commercial tenant representation broker?
Usually not. The landlord typically pays the tenant’s broker by sharing the leasing commission. The agreement should say what happens if a landlord will not pay.
How long does a tenant representation agreement last?
Often six months to a year, sometimes with an option to extend. It should match your search and move timeline.
What is a protection period?
A period after the agreement ends during which the broker is still owed a fee if you lease a building it introduced to you.
Is a tenant representation agreement required in Illinois?
Yes. Since January 1, 2025, Illinois requires a written brokerage agreement before a broker begins working for a client, including commercial tenants.
Can my broker also represent the landlord?
Only with your informed written consent under Illinois law. Ask how the firm handles buildings it also lists before you sign.
Will using a tenant broker raise my rent?
Generally no. Landlords budget leasing commissions into their costs, and a tenant broker usually negotiates savings well beyond that cost.