| Situation | What the adviser gains | What the client risks | The question to ask |
|---|---|---|---|
| Commission-paid brokerage in a lease or purchase | A closed transaction, and a larger one | Advice tilted toward closing a bigger deal rather than the best one | Would you still recommend this if no transaction resulted, and will you put that in writing? |
| An outsourced-services audit performed by the firm that also delivers those services | A larger scope of work for itself | An audit that never proposes reducing what the same firm sells | Are you assessing anyone whose contract you would also like to hold? |
| Technology or IWMS selection support from a vendor’s implementation partner | A licence or implementation sale | A shortlist that starts with the vendor’s own product | Which product would you recommend if you sold none of them? |
| "Free" benchmarking or market data bundled with a brokerage or service relationship | Retention of the underlying relationship | Data you cannot independently verify and do not own once the engagement ends | Can I see the underlying data, and is it mine once this ends? |
Insights
Why Advice Paid by Commission Is a Governance Risk
Most real estate advice that costs nothing is paid for somewhere else – by a transaction commission or by the services the adviser also sells. That is a conflict of interest for governance to manage, not evidence of dishonesty.
Sept. 8, 2026 · Patricia Karchemny · 7 min read
Real Estate in the Boardroom Part 1 of 1
Three ways real estate advice gets paid
In corporate real estate, advice reaches a CFO’s desk through one of three money flows. Two of them can create a conflict of interest without anyone acting in bad faith. Only one removes it by design.
What each model incentivises
A commission-paid broker is typically paid by the other side of the transaction – the landlord or the seller – even when representing the tenant or buyer’s interests during negotiation. The incentive is straightforward: close a transaction, and where possible a larger one, because the commission is usually a share of it.
A services firm that also assesses the outsourced facilities or real estate services it delivers is incentivised differently: not toward a bigger transaction, but toward a larger scope of what it sells you next. A fee-only adviser, paid only by the client and selling nothing else, is incentivised toward the client’s outcome, because that is the only thing being bought.
None of this makes the first two models dishonest. Brokers move real transactions and know markets a fee-only adviser may not touch day to day. The question for governance is not whether the advice is honest; it is what it is structurally built to optimise for.
How boards already handle a conflict of interest like this one
This is not a new problem for governance, even if it is under-discussed in real estate. Financial statement auditors are required to be independent of the entity they audit: Rule 204, the profession’s harmonized rule of professional conduct, sets the standards Chartered Professional Accountants must uphold to maintain that independence on every audit and assurance engagement.
Fee-only financial planning exists as a distinct, disclosed category precisely because commission-based compensation can shape a recommendation. Procurement policies routinely require staff and vendors to declare a conflict of interest before a contract is awarded.
A board that would not accept an auditor being paid a bonus by the company it audits should ask the same question about the firm recommending its next real estate transaction, or its next outsourced-services provider.
What Québec’s regulator actually requires – and does not
In Québec, real estate brokerage is regulated by the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ). To represent a client’s interests, a broker needs a written brokerage contract with that client, must act with transparency and avoid placing themselves in a conflict of interest, and – since amendments to the Real Estate Brokerage Act took effect on June 10, 2022 – cannot simultaneously represent both parties to a residential transaction under separate brokerage contracts.
What these rules govern is the broker’s relationship to the transaction: who they represent, and whether that representation is disclosed and exclusive. They do not require disclosure of how the advice itself is incentivised by the size or existence of a deal, and the residential double-representation rule does not, on its face, extend the same protection to commercial and corporate transactions. As of September 2026, confirm the current scope – and any commercial-specific requirements – with counsel before relying on this distinction in a procurement or engagement decision.
The conflict inventory: what to ask any adviser
Four situations recur across real estate and outsourced-services relationships. In each one, the question worth asking is short enough to put on a governance checklist.
Testing for independence
A quick test for any adviser relationship: who pays, and does the same firm deliver anything else. Cross those two questions, and only one quadrant is structurally free of the conflict.
I am not against commissions – brokers move real transactions. I am against a governance body not knowing one exists. Ask who pays your adviser and what else they sell, then decide whether that is the structure you want behind your next real estate decision.
— Patricia Karchemny
Key takeaways
- Most “free” real estate advice is paid by a transaction commission or by the services the adviser also sells – a structural incentive, not a character flaw.
- Boards already manage this kind of conflict elsewhere: auditor independence rules and fee-only financial planning are the closest analogies.
- In Québec, OACIQ’s disclosure rules govern a broker’s relationship to a transaction, not how the underlying advice is incentivised – confirm the current scope with counsel.
- A short conflict inventory – who gains, who risks what, and the question to ask – belongs in every advisory engagement, not just real estate.
- Fee-only advice, paid solely by the client with nothing else sold, is the only structurally independent quadrant.
Frequently asked questions
Is fee-only real estate advice more expensive?
Not necessarily more expensive overall – commission-paid advice is rarely free; its cost is usually embedded in the transaction and paid indirectly through the deal rather than invoiced directly. A fee-only engagement makes the cost visible and lets a governance body evaluate it on its own, separate from whether a transaction happens at all.
What questions should a CFO ask a real estate adviser?
Who pays you for this engagement, and how much does that payment depend on the outcome? What else do you sell, and would this recommendation change your access to that business? Would you make the same recommendation if there were no transaction, and will you put that answer in writing?
Can a broker act for a tenant independently?
A broker can represent a tenant’s interests under a written brokerage contract and owes duties of transparency and loyalty to that client, but compensation structure still matters: if the broker is paid by the landlord or by a commission tied to the deal’s size, the incentive sits alongside – not necessarily against – the tenant’s interest. Ask how the broker is paid before assuming the two are aligned.
What is fee-only real estate advisory?
An advisory relationship paid solely by the client, at a fee that does not depend on whether a transaction happens, on its size, or on any other service the adviser sells. It is a structure, not a guarantee of quality – the point is that the incentive to recommend a particular outcome is removed by design.
Independence is not a marketing claim; it is a structure you can verify. For a confidential conversation about how your organisation is advised on real estate and outsourced-services decisions today, get in touch. For how we approach sourcing and governing outsourced-services contracts, see Supplier & Outsourced Services Governance; for portfolio and transaction decisions, see Portfolio & Capital Strategy.