Commercial Tenant Representation Fees in Alberta

1. Reject the standard-fee assumption

RECA Rule 43 requires every written service agreement to state the amount or method of calculating remuneration or alternate compensation and the circumstances when it is payable. Competition Bureau guidance confirms that real-estate compensation is independently determined rather than fixed by a regulator or association.

Commercially does not publish or imply a standard Alberta tenant-representation commission, percentage, per-square-foot fee, retainer or landlord contribution.

• Scope
• Calculation
• Payer
• Shortfall
• Payment event
• Later transaction
• Expenses
• GST

2. Define the services being priced

List requirement design, inventory search, direct outreach, tours, comparison, cost modelling, proposals, conditions, improvement coordination, lease execution and possession work. Separate included brokerage service from legal, design, engineering and other professional work.

A fee comparison without an identical service scope can reward an incomplete mandate rather than lower cost.

3. State the calculation and units

Define whether the fee uses base rent, total rent, area, years, steps, flat amounts, retainers, hourly work or another method. Identify measurement standard, rent definition, term, options, expansions, inducements and taxes.

Use written examples for stepped rent, partial floors, early occupancy, renewals and multiple premises. A headline percentage is not a complete calculation.

4. Separate payment source from obligation

State whether the brokerage may seek payment from the landlord or listing brokerage, how that amount is credited and what the tenant owes if the contribution is zero, lower, conditional, delayed or disputed.

Landlord-paid is not the same as no fee and does not define who the brokerage represents. Representation and compensation require separate disclosure.

5. Define the payment event

Identify whether payment relates to an executed offer, binding lease, condition removal, possession, rent commencement, landlord receipt, renewal, expansion, option, assignment, sublease or another event. Address failed delivery and tenant default.

Do not infer payment from market custom. The operative agreement, cooperating terms and transaction facts control.

6. Address retainers and expenses

Document retainer amount, application, refundability, replenishment and trust or accounting treatment. List approved travel, data, consultants, plans, measurements or other expenses and required authorization.

A retainer can be a payment mechanism or credit, but it should not conceal the total calculation or create an undocumented additional fee.

7. Include later occupancy events

State whether renewals, extensions, expansions, contractions, relocations, options, assignments, subleases, additional premises or purchases are included and how compensation is calculated. Define protected premises and periods.

A later transaction with the same landlord does not automatically carry the original calculation. Review the written mandate and amendments.

8. Compare conflicts and referral payments

Ask about landlord relationships, brokerage listings, referral arrangements, incentives and other compensation connected to the assignment. Obtain required disclosure and consent before treating any outside payment as neutral.

Compensation can create a conflict but does not by itself prove misconduct. The relationship, duties, disclosure and consent determine the control process.

9. Approve a complete fee record

Keep the signed agreement, amendments, calculation examples, cooperating terms, invoices, credits, expense approvals and transaction evidence together. Obtain legal and tax advice for material uncertainty.

This guide is educational and does not quote a Commercially fee, calculate tax or determine entitlement in a particular lease.