Representation Agreements: What Every CRE Client Should Know

If you’re a regular reader of this blog, you know I’m an owner of Commercial Brokers International, so you might assume I believe in representation agreements simply because I’m a broker. That’s probably partially true, but I’m also an investor.

I’ve invested in single-tenant net lease properties for several years, and I’ve learned how important it is to have a great broker in my corner. When I take on a new client, I won’t work with them without a representation agreement.

Over the years, I’ve come to appreciate how these agreements clarify the relationship for both sides. Here are a few reasons why.

Representation Agreements Are Now Required in California

Effective January 1, 2025, buyers’ agents in California must enter into a buyer-broker representation agreement with their clients. The agreement must be signed before the agent takes the client on a property tour.

Beyond meeting the legal requirement, the agreement establishes the broker’s responsibilities, the client’s expectations, and how the relationship will work from the beginning.

They Help Prevent Commission Disputes

Without a representation agreement, two brokers can claim credit for the same transaction. The client can then be dragged into the dispute—or potentially face claims for a second fee.

A clear agreement with a defined scope, term, and protection, or “tail,” period establishes who is representing the client and who may be entitled to compensation.

For those who don’t believe this situation can happen, I’ve seen it firsthand.

I once listed a building in a very hot market and received more than 20 offers during the first week. Surprise, surprise—the three best offers came from the same buyer and were presented by three different brokers.

A representation agreement could have made it clear which broker was authorized to act on the buyer’s behalf.

Overlap Should Be Addressed When Changing Brokers

If a client switches brokers, the new representation agreement should identify any properties that are excluded because they remain protected by the previous broker’s tail period.

Alternatively, the agreement can state that the new broker will split or credit the fee.

Addressing this during the transition helps prevent two valid agreements from claiming the same transaction.

You Get One Point of Contact and a Dedicated Advocate

When I’m acquiring properties, I prefer to work with one broker who I know is among the best in the market and asset class I’m targeting.

Communication is simpler, responsibilities are clearer, and I’ve found that we’re much more effective when we work together as a team.

Instead of receiving scattered information from several sources, I have one trusted professional who understands my objectives, knows what I’ve already reviewed, and can evaluate opportunities through that lens.

Your Broker’s Interests Become More Closely Aligned With Yours

This may be the most important point.

Without an agreement, a broker may have an incentive to focus on opportunities that can produce a commission quickly—particularly if another broker might otherwise secure the transaction.

With exclusivity, the broker can focus on finding the best transaction for the buyer or tenant, even if the process takes longer or requires more extensive research and negotiations.

The broker has greater confidence that the time and resources invested in the assignment will be protected. In return, the client can expect a more focused and committed search.

Fee Language Clarifies Who Pays

A representation agreement typically states that the broker will first seek payment from the landlord or seller. Any fee paid by the other side is then credited against the client’s obligation.

This helps prevent the client from being billed separately on top of a fee that has already been paid through the transaction.

The agreement should clearly explain how compensation will be handled so there are no surprises later.

What Happens if the Broker Isn’t Performing?

This also needs to be addressed in the agreement.

After a specified period, the buyer or tenant should have the ability to cancel the agreement if the broker isn’t performing as expected. The broker should then provide a list of the properties they introduced or showed to the client and for which they may retain representation or compensation rights during the tail period.

The client should share that list with the new broker so the same properties aren’t presented again without first addressing the existing protection.

A clear termination process protects everyone and makes the transition easier.

Clarity Makes the Process Easier

Commercial real estate is a relationship business, but having a clear understanding of how the relationship and transaction will work gives both the broker and the client a better picture of what to expect.

When you’re buying or leasing commercial real estate, there are a lot of moving parts. The more clarity you have in your broker relationship, the easier the entire process becomes.

A well-written representation agreement isn’t meant to make the relationship more complicated. It’s there to define responsibilities, align expectations, and protect everyone involved.

Joe Killinger is a partner at Commercial Brokers International and founder of the CRE Affiliate Network. Come hang out with me on YouTube, Instagram, and X at @JoeKillinger, and find more at JoeKillinger.co.

Can This One Simple Fix Solve California’s Housing Crisis?

We’re just putting the finishing touches on another election, and once again, we’ve been listening to politicians talk about homelessness, the need for more housing for the unhoused, and the need for more housing in general.

This may be more of a rant than a blog this week, but I’m hoping we can start a real discussion about how to finally create a pathway toward where we need to be on housing.

I think everyone agrees that we need more housing across California. Every election cycle, each politician presents a plan to fix the problem, but it never seems to get resolved.

I’ve been in the commercial real estate industry in Southern California for almost 30 years. You would think that, during that time, we could have made some kind of dent in this problem. Instead, it only seems to be getting worse.

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How Much Property Does the Government Own?

I did some research into how much property the State of California, the City and County of Los Angeles, and the Los Angeles Unified School District actually own.

The numbers are eye-opening.

City of Los Angeles

The City Controller’s Office has mapped 8,974 parcels owned by the City within Los Angeles County, including parks, libraries, parking lots, commercial and industrial buildings, and vacant land.

That includes 17,000 acres in Palmdale that were originally purchased for an airport that was never built. When every public agency is included, there are more than 14,000 government-owned properties within Los Angeles city limits alone.

Los Angeles Unified School District

LAUSD owns more than 6,400 acres across 3,200 parcels and 21,000 buildings, making it one of the largest landowners in the region.

Only recently, under its 2025 agreement with the teachers’ union, did the district commit to identifying which of its vacant and underutilized parcels could potentially be used for affordable housing.

State of California

Following the Governor’s 2019 executive order, the California Department of General Services reviewed 44,370 state-owned parcels and identified only 1,330 as potentially viable for housing.

The state now publishes an Excess Sites map showing land that may be available to developers.

County of Los Angeles

Los Angeles County tracks vacant parcels through its housing element sites inventory and periodically puts surplus vacant property up for sale through its Development Authority.

However, the County has never published one simple number showing how much vacant land it owns.

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A Broader Look at Publicly Owned Land

The broadest examination of this issue came in 2023, when the Committee for Greater L.A. commissioned the Center for Pacific Urbanism to study 65,000 parcels owned by the City, County, State, federal government, Metro, and LAUSD.

The parcels were filtered based on factors such as slope, zoning, and access to utilities to identify sites that could realistically become housing or shelter.

That brings me to the part that frustrates me most.

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Twenty-Six Sites—and Little to Show for Them

In 2021, a federal judge ordered the City of Los Angeles to identify properties that could be used to house people experiencing homelessness.

In January 2022, the Controller’s Office began with approximately 8,000 city-owned parcels and narrowed the list down to 26 sites.

These properties were vacant or unused, large enough to make a meaningful difference, and collectively offered approximately 1.7 million square feet for tiny-home villages, safe parking, and shelters.

The Controller said the sites could be used immediately.

The largest was a 394,000-square-foot lot on Clovis Avenue in South Los Angeles. The Controller held a press conference there in May 2022, urging the City to act.

So I went looking for what happened to those 26 sites.

I couldn’t find a single public report tracking their progress.

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One Vacant Lot Tells the Story

The one property I was able to follow is a nearly 20,000-square-foot vacant lot at 1636 W. Manchester Avenue in South Los Angeles.

In September 2025—more than three years after the property was identified—the City Council asked staff to report back on what should be done with it.

In April 2026, the City requested approval to issue a request for proposals.

That RFP is for commercial or mixed-use development, which could include market-rate housing. It is not the homeless housing for which the property was originally identified.

More than four years later, the lot remains empty.

For the three largest sites—on Clovis Avenue, Western Avenue, and San Fernando Road in Sylmar—I could not find any record of something being built at all.

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The Land Exists. The Management Doesn’t.

This isn’t happening because the land doesn’t exist. It’s happening because nobody is managing it like a real estate portfolio.

The City itself was told as far back as 2016 that it needed a Chief Asset Manager to do exactly that.

In my business, if you held a vacant parcel for four years without a plan, you would be out of business. When the government does it, nobody seems to be held accountable.

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Could the Solution Be That Simple?

I believe a solution has been sitting in front of us all along, but we continue to overlook or ignore it: manage publicly owned land like a real estate portfolio.

That means creating a complete inventory, identifying which properties are genuinely usable, establishing clear plans and timelines, assigning responsibility, and publicly tracking what happens to every site.

As I said at the beginning, this may be a bit of a rant. But I would genuinely like to hear your thoughts.

Could better management of publicly owned property help California make real progress on housing? What other solutions should be part of the conversation?

Joe Killinger is a partner at Commercial Brokers International and founder of the CRE Affiliate Network. Come hang out with me on YouTube, Instagram, and X at @JoeKillinger, and find more at JoeKillinger.co.