Glossary / Commissions and splits
Also known as: Brokerage fee, broker's fee
A broker fee is the payment a broker earns for arranging a transaction. In commercial leasing the term is often used for the leasing commission itself, and the lease or brokerage agreement sets who pays it, how it is calculated, and when it is due.
Nasdaq defines a broker fee broadly as a fee a broker charges "to complete services or finalize transactions for clients." In lease documents the term usually points to the broker's commission. Law Insider collects examples from real contracts, including a "Brokerage Fee" paid for each adjustment in base rent and a sublease commission calculated as 15% of the total rent due. A.CRE notes that leasing commissions are generally paid by the landlord.
Who pays the fee decides who you collect from and when. The landlord generally pays, but tenant representation agreements can add a second source. The Florida Realtors exclusive tenant brokerage form, for example, makes the tenant responsible for the broker's compensation while crediting the tenant with "any amount which Broker receives from a landlord" or the landlord's broker. That structure can protect a tenant rep broker if the landlord does not pay.
How the fee is calculated also shapes timing. A fee tied to rent adjustments, like the Law Insider example, is paid in pieces over the lease term rather than at signing. A fee based on total rent may be paid at execution, at occupancy, or in installments, depending on the Commission agreement. See Leasing commission for more on how the amount is set. If a deal involves a co-broker or a referral, the broker fee in the lease is the gross figure, and your share is set by those separate agreements.
Whatever the document calls it, find the clause that says who pays the broker fee, what it is based on, and the date it is due.
