About Tenant Advocacy
To parody the film's monster hit theme song by Ray Parker Junior, "They're here to save the tenants' world. They ain't afraid of no landlord. Who ya gonna call?"
Dan Aykroyd and Bill Murray were driven, out of necessity, to create a new profession in the movie Ghostbusters. They set up a private company to save the public from demonic entities, with wild results.
In much the same way, Parallel Directions founder Peter Scott was driven to create a new category of property professional in New Zealand - the Commercial Tenant Advocate - to protect the interests of commercial tenants in a property world that serves property owners very well but is riddled with conflicts of interest when dealing with tenants.
Parallel Directions serves corporate tenants from a wide range of companies and industry groupings throughout New Zealand. When we first analyse a new client's office leasing affairs, we are often able to save $2 to $10 for every $1 they spend. The service is effectively free, paying for itself many times over. As a tenant advocate, our business is geared to the interests of corporate tenants.
Commercial tenant advocates separate themselves from others in the industry by:
- Working only for tenants - never landlords
- Working only for corporate tenants - not residential
- Being a registered property consultant with the New Zealand Property Institute - and bound by that institute's code of ethics
- Being inherently tenant-biased, i.e. biased in all dealings towards achieving the best outcome for tenant clients - not commission-paying property owners
Anthony Robertson, president of the New Zealand Property Institute, made a good case for tenant advocacy in an article he wrote for The Property Business magazine. The article was titled "Who Pays The Real Estate Man?" and cautioned that, "There is no such thing as a free lunch in any business and certainly not in the real estate sector." Anthony's point was that tenants pay the real estate man... but it's not always apparent or transparent. Beware of dancing with the Devil.
Some property professionals are paid by the landlord, while others work for both landlords and tenants. It pays to understand where they derive their income and therefore where their loyalties might lie.
Sitting at the same table (with one foot either side of the supply/demand razor blade), you can have the deal-driven real estate salesperson, the property manager and the valuer (sometimes all from the same property company). The latter two are often under pressure to drive business to their own company's lucrative agency business. Internationally (in the UK for example), this situation is not allowed to occur.
You dance with the Devil when you deal with professionals who also work on the supply side of the supply/demand razor blade. Dance with your eyes open and your guard up!
Tenant advocates work solely for the interests of tenants, and are truly free from conflict of interest... real, potential or perceived. If you are a corporate tenant, your ideal dance partner is a commercial tenant advocate.
There is much confusion about the difference between a tenant rep and tenant advocate, especially within the property industry. Many claim to be tenant advocates, but upon enquiry it becomes apparent they are only tenant reps. Here's how to tell the difference...
A commercial tenant advocate is a:
- Registered property consultant
- Works only for corporate tenants
- Provides them with property consulting services
- Champions their interests in all dealings with real estate agents, landlords and other property professionals.
A commercial tenant representative is a:
- Property consultant (registered or not)
- Represents corporate tenants (sometimes exclusively, sometimes not)
- Provides them with property consulting services, and
- Works within an integrated property services company or agency that also works with landlords.
The implication is clear. Tenant Representatives within integrated agencies are often unable to show office space to clients unless it is listed with their own company. This is an example of the conflicts of interest prevalent in the property industry.