If tenant defaults on lease & leaves, what happens to brokers commision with management company?

A multi tenant building had two tenants default for non payment on five year leases. One was evicted in court, one left in the middle of the night. If the broker for the management company that handles the property was already paid at signing of lease, is landlord due a refund?
In Leasing Property - Asked by joanne c. - Sep 28, 2010
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Answer(s)

Richard P.
Broker/Agent
Honolulu, HI

Typically not unless it is stated otherwise in your contract with the owner.

Sep 28, 2010
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Rob B.
Chandler, AZ

Joanne....
This is a question that you may have asked many times in your career if you are a leasing agent. The answer given by Richard P. was correct and quite succinct. I would add some justification to that. A leasing agent works very hard to provide tenants to a building and often spends a great deal of expense and time in advance. (Often for naught, when a lease does not consummate). As a part of the agent's responsibility they should present to the owner a thorough credit check, along with the results of checking the prospective tenant's rental history. If in doing so, the owner then determines to accept the tenant and enters into a lease, it then becomes the owner's responsibility for the lessee.
I have had owners suggest that they would pay only one year at a time on a longer term lease. In such cases I have always refused to accept this. If the owner wants to pay in this manner, then he/she should limit his or her leases to one year at a time, which usually does not make economic sense to the owner or gives him/her the sense of security he/she seeks.
Best wishes in your leasing activity.
Rob Baird, CA RE Lic. #544165 (One of the oldest, active licenses in CA)
951 515-5855

Sep 28, 2010
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