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CBRE Lawsuit Involving Dual Representation Is Dismissed

CBRE has won a lawsuit in Washington, D.C., in a case involving dual representation, which has gained more attention because of a separate, closely-watched case involving JLL. New York Judge Jennifer Schecter dismissed the suit filed by a D.C. landlord last year and ruled that CBRE could keep the $11.6 million commission on a big private school lease.

The owner of the building, 601W Companies, sued CBRE last year over a 600,000-square-foot sublease signed in 2018 with the Whittle School & Studios. 601W argued CBRE should return the commission because it didn’t correctly disclose it was representing both sides of the transaction. CBRE claimed it represented the Whittle School, but the landlord was represented by Cushman & Wakefield. CBRE was working separately with the landlord as a property manager and project manager, but that didn’t mean it repped the landlord in the deal.

The suit against CBRE was filed two months after a separate ruling in D.C. said a landlord didn’t have to pay JLL its commission because of dual representation. JLL has appealed the case, which has yet to be decided in the U.S. Court of Appeals. The JLL case has larger implications because it hinges on the interpretation of the D.C. Brokerage Act, a 1996 law regarding dual representation. The CBRE ruling should be a relief for commercial brokerages in D.C., but the industry will now turn its attention to the JLL suit. Dual representation is a common brokerage practice, but we may see increased scrutiny of it in the years ahead and more court disputes like these ones.

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