Tenant Creditworthiness...AComplicated Discussion

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Landlords and brokers have been forever locked in a battle overthe amount and timing of landlord paid compensation, when landlordsare unsure of the quality and stability of particular tenants.Landlords contend that because brokers bring tenants to landlords,that those brokers should be responsible for their tenants'creditworthiness and should participate in the credit and otherrisks borne by landlords.

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I've written a lot on this subject. Landlords are in the riskmanagement business. Commercial real estate brokers are in the feefor service business, and are therefore not in the business ofaccepting the type or quantities of risks that landlords accept.Accordingly, this matter is more appropriately one to be hadbetween landlord and tenant.

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The reality is that commercial tenants are responsible for theirown creditworthiness, good, bad, or otherwise. And, whilelandlords are in the business of bearing acceptable levels of risk,neither landlords or brokers should bear unnecessary orunreasonable amounts of risk on a tenant's behalf.

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In assessing the financial wherewithal of commercial tenants,landlords will consider numerous factors, including a tenant's:

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