Did You Know…a Broker May Lose Out On A Commission In D.C. If The Broker’s Disclosure Of Dual Representation Is Incomplete Or Inconspicuous? – Landlord & Tenant – Leases
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On March 23, 2022, the United States District Court for the
District of Columbia decided the case of Jones Lang
LaSalle Brokerage, Inc. v. 1441 L Associates,
LLC, D.D.C. No. 20-3687 (FYP)
(“JLL v. 1441”) where a Broker lost out on a
commission of almost $800k for failure to properly disclose dual
representation of a Tenant and Landlord.
The D.C. Brokerage Act requires Brokers to obtain written
consent of the parties to a dual representation and provides a
Sample Form for consent. If the dual representation disclosure is
given in combination with other disclosures or provided with other
information, the disclosure must be conspicuous, printed in bold
lettering, all capitals, underlined or within a separate
box. D.C. Code § 42-1703(i).
In JLL v. 1441, the Landlord and Tenant did not
sign the Sample Form or any separate disclosure form consenting to
the Broker’s dual representation. The commission agreement
between the Landlord and Broker contained an exhibit mirroring the
Sample Form but the exhibit was not signed by the Landlord or
Tenant. The lease contained a provision on page 51 of a 65-page
lease which stated Tenant and Landlord “consent to the dual
agency” and “waive any conflict of interest” but
the provision was not bolded, in all capitals, or underlined.
Further, the lease did not contain language that the Broker may not
disclose to either client any information given to the dual
representative by the other client within the confidence and trust
of the brokerage relationship. For these and additional reasons,
the Court found the Broker’s disclosure of dual
representation was incomplete and inconspicuous, making the
commission agreement void and unenforceable.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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