There is the moment you close the deal, and there is the moment the money actually lands. In commercial leasing those are rarely the same day, and they are often months apart. This guide walks the real payment timeline milestone by milestone, so you know when each piece of your commission is supposed to arrive and what triggers it. This is about the payment schedule once the commission is earned. For the timeline of the deal itself, from first tour to signature, see the guide on how long a commercial lease takes to close.
Your commission does not pay on a calendar date. It pays when specific events happen. Four milestones matter.
Once the lease is fully executed, the first half of your commission is earned and due. How fast it actually pays depends on the agreement and the payor. Many agreements specify a window, payment within a set number of days of execution, and a reliable payor will hit it. The first half is the easy half. It is tied to an event that has already happened, the signing, so there is little left to wait on except the payor cutting the check.
Then comes the wait. The second half is tied to occupancy, and occupancy is tied to the tenant actually being able to use the space. If there is a build-out, and in commercial leasing there usually is, the second half cannot pay until that work is done and the tenant moves in. This gap is the defining feature of leasing payment timing. It can be a few weeks on a simple space or many months on a heavy build-out. The reason the gap exists, and why it is structured this way, is covered in the guide on the 50/50 trap.
When the tenant takes occupancy, the second milestone is met and the final half becomes due. As with the first payment, the agreement usually defines how quickly it must be paid after the trigger. Once that final payment lands, the commission is fully collected and the deal is closed out for you.
Say you sign a lease in January with a commission that pays half on execution and half on occupancy, and the tenant has a four month build-out. Your first half might pay in late January or February. Your second half waits until the tenant occupies, perhaps May or June, and then pays within the agreement's window after that. So a deal you closed in January is not fully paid until roughly mid-year. That is normal, not a problem with your deal.
You control how clean your paperwork is and how clearly the agreement defines the triggers and payment windows. You do not control the build-out schedule, the tenant's move-in, or how promptly the payor performs. That mix of controllable and uncontrollable is why leasing income is lumpy even when your pipeline is strong. When the uncontrollable part stretches too long, an advance is the lever that puts the timing back in your hands, which is covered in the guide on commission advances.
The first half is usually paid within a defined window after lease execution, often specified in the agreement. The second half waits on occupancy and can land months later, depending on the build-out.
Generally at lease execution, once both parties have signed and you are the procuring cause. That is the moment the landlord's obligation attaches, and it is why the first half becomes due right away. Earned and paid are two different things, though. Your commission can be fully earned in January and not fully paid until June, because the payment triggers sit later than the earning event. Read your agreement carefully on this point, because some are written to condition the earning itself on occupancy or on the tenant's first rent payment rather than on signature, which changes what you are owed if a deal unwinds midway.
Because it is tied to the tenant taking occupancy, which waits on the build-out. The heavier the tenant improvement work, the longer the second half sits. See the guide on the 50/50 trap.
You can tighten your paperwork and the agreement's payment windows, but you cannot speed up the occupancy trigger itself. To convert an earned commission to cash before occupancy, a commission advance is the option. To see how that compares against borrowing on your own numbers, use the advance vs loan comparison.
Commission paid by the landlord, calculated as a percentage of the total base rent across the lease term rather than on a single year. The rate almost always steps down year by year on a declining schedule such as 6-5-4-3-3%. That gross commission is then split between the listing side and the tenant representation side, and each broker splits again with their own brokerage. Some corporate and portfolio assignments are paid a flat advisory or project fee instead, and referral fees on deals passed to other markets are a secondary income line.
Two different numbers get quoted here and they are often confused. The commission on the deal is typically 4% to 6% on a declining schedule, which blends out to roughly 3% to 4.5% across the full term. What the individual broker personally takes home is much less, because the gross is divided between the two sides of the deal and then again with the brokerage, with house splits ranging from about 50/50 for newer agents to 90/10 for senior producers. In practice an individual commonly keeps somewhere between a quarter and 45% of the gross. On a $63,000 commission that is roughly $15,000 to $20,000. Run your own splits through the commission net payout calculator.
Landlord credit approval on the tenant usually takes a few days to two weeks once financials are submitted. The full path from letter of intent to a fully executed lease more commonly runs 30 to 90 days, and longer on large, multi-site or heavily negotiated deals. That approval window sits before anything on this page begins, which is worth remembering when you are forecasting cash. The deal timeline itself is covered in the guide on how long a commercial lease takes to close.
For a tenant, representation is usually free at the point of use, because the landlord pays the commission whether or not the tenant is represented. Going unrepresented does not save that money, it simply leaves the landlord's agent to collect both sides. The value a tenant rep adds is comparable deal data the tenant cannot see, knowledge of which concessions are actually available in that submarket, and negotiation of free rent, improvement allowances and renewal terms that a tenant would not know to ask for. On the landlord side the case is exposure and speed to lease-up, measured against the vacancy cost of a slower deal.
There is no recognised 1% rule in commercial leasing. The phrase comes from two unrelated places. In residential rental property investing it is a screening shortcut that monthly rent should be at least 1% of the purchase price. In car leasing it is a rough guide that the monthly payment should sit near 1% of the vehicle's MSRP. Neither applies to a commercial lease. The nearest real equivalents in commercial work are the annual escalation clause, usually around 2% to 4%, and occupancy cost as a percentage of tenant revenue, which is how retail landlords test affordability.
Auto lease brokers are a different industry from commercial real estate. They are typically paid a flat fee by the client, commonly a few hundred dollars up to around a thousand, and in some arrangements the dealer pays the fee instead. There is no declining schedule, no split between two brokerage sides, and no occupancy trigger. Everything else on this page describes commercial real estate leasing commissions, which work nothing like that.
This guide is general information for commercial real estate brokers and is not financial, tax, or legal advice. Payment timing depends on your agreements and payor. Confirm specifics with your brokerage.
