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“Independence” a vexed question when tenant reps share office with landlord reps With Mario Macri, Director ACORPP
Prospective and existing tenants are at the mercy of a curious set of industry dynamics where the typical multinational real estate agencies organising their lease can often also be representing their landlord. ACORPP Director Mario Macri said that exacerbating this odd state of affairs was that tenants were quite often unaware that they were in the middle of this potential conflict of interest. “If they are aware, they have usually been assured that there is an intra-company ‘Chinese wall’ between the parties representing them and the landlord,” Mr Macri said.
Mr Macri said such assurances were open to challenge where both parties were often housed in the same office and shared the same computer network and disclosed information to the same directors. “It stretches the bounds of believability that these individuals, often in side-by-side cubicles, are not going to share information, particularly when there is an overarching demand on them to get a deal done quickly,” he said. Mr Macri said this raised two key questions. “How can you have any confidence in the independence of advice given to you as a tenant when there is potential for a conflict of interest - and how will you ever know you got the best deal that you could?” he said. “These are the type of issues that should keep you awake at night if you’ve ever signed a deal in these circumstances.” Mr Macri was quick to dispel notions that any of these types of practices might be endorsed or applied in the WA or QLD market. “Not at all, but the mere fact that a tenant representative and a landlord representative can both be from the same company must at least raise a question on the independence of advice that might be offered,” he said. “Another perspective is: will the agency work harder for a landlord where they will earn ongoing property fees as opposed to the interests of a single transaction tenant?”
The ACORPP director believes there should be a duty of disclosure where parties declared their common backgrounds, giving both a tenant and a landlord the option to proceed or opt out of having the agency represent both sides of the negotiation. “This would at least ensure parties are proceeding with their eyes wide open,” Mr Macri said. Mr Macri said the ACORPP tenant representation proposal was unambiguous. “If we are representing you, all our efforts are directed toward getting you the best possible outcome,” he said. “We work for no other interests other than yours.”
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