When an entity is in search of a new space for its operations, there are some key players who make the deal happen.
I happen to be a licensed attorney in New York State, but in my role as a tenant representative, I am limited in the legal advice I can offer to my clients. I can’t act as both a broker and an attorney because it is considered unethical by the bar association; a broker’s incentive is to close the deal and an attorney’s incentive is to protect his client. These roles can be in conflict.
Despite the advantages of attorneys and brokers working together, when it comes to real-world situations, some attorneys fail to communicate with their client’s broker, often by design. This leaves the project with no feedback mechanism between team members, and that is when problems occur.
In situations like these, it is my observation that tenants do not fully understand their responsibilities because the lawyers do not explain all the potential liabilities to their clients. Also, some lawyers take on negotiating a lease without the prerequisite experience. Leases are complex. In New York City, they are especially convoluted, with many traps.
It is important to know what your risks are as a tenant and how to respond to a landlord’s attempts to shift risks onto your shoulders. As an attorney and a broker, I can look over a lease and take an inventory of dozens of legal issues—I can give those insights to the tenant’s attorney, who oftentimes overlooks critical issues. However, brokers are not allowed to give legal advice.
I’ve had clients who didn’t hire attorneys, and it was detrimental to their interests because, in that situation, a broker can not give any legal comments because they are not allowed to practice law while acting as a broker. That ends up being especially hurtful to the client when dealing with common sticking points such as:
- sublease clauses;
- compliance with future rules and regulations;
- how space is delivered; and
- building operational issues.
The best lawyers are the ones who typically understand leases and realize the value of having a broker involved. After 30 years’ worth of experience representing commercial tenants, I have had the pleasure of working collaboratively with many such legal practitioners. In fact, if you find yourself in need of someone to represent you, I urge you to contact me.
My “Rolodex” is your “Rolodex.”
George E. Grace
Mohr Partners, Inc.
232 Madison Avenue
New York, NY 10016