The Listing Agreement between Broker and Landlord will specify the commission. Typically, you see language such as:
Leasing Fee: If a cooperating broker is involved, Broker and cooperating broker will enter into a separate agreement and split the following fee, 6% of the aggregate base rent for the initial lease term not to exceed ten (10) years. In the event Broker acts as sole broker in the transaction, 4% of the aggregate base rent for the initial lease term not to exceed ten (10) years. Additional compensation for initial lease terms longer than ten (10) years shall be at Landlord’s sole discretion, but in no event shall listing broker be compensated less than three percent (3%) on the initial lease term not to exceed ten (10) years.”
Exclusive Listing Agreement Clause
Hypothetical: Broker A is representing Landlord with a commercial property. Per above Clause, Landlord will pay 6% of the aggregate base. Broker B secures a Tenant who rents the commercial property from the Landlord for 10 years with a base rent of $10,000 per month. What is Brokers’ commission?
$120,000 (annual rent) x 10 (years) x 6% (commission) = $72,000 (full commission).
Answer: Broker A and Broker B will each earn $36,000.