Tenants signed lease, agent then requested commission, attorney canceled

Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes

1mo

I can't speak directly to your locale, but typically when an agent is "cooperating", there will be a Coop agreement that spells out the commission. This is routine. If you signed docs without reading, you may have committed yourself.

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Greg Magiera
OP
Member since 2026 · 14 posts · 8 votes
1mo
Thanks for your input.
To clarify, we never signed a co-op agreement or any separate agreement to pay her commission. The brokerage compensation section of the lease was left blank—no amount or payment arrangement was agreed upon.
We listed the property ourselves on Facebook Marketplace. She contacted us representing prospective tenants and asked whether we were “OK cooperating with an agent.” We said yes, meaning we were willing to work with applicants represented by her. She did not explain that she expected us to pay her or discuss a commission at that point.
Only after both sides had signed the lease and the tenants returned it did she request a commission and indicate that her clients might withdraw if we did not pay. By then, we had already turned down other applicants.
The tenants ultimately had an attorney disapprove the lease under its attorney-review clause. We understand that is a separate issue. Our concern is the agent introducing her compensation demand after signing, without any prior agreement that we would cover it, and linking it to whether the tenants would proceed.
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Michael Eskenasy

Investor · Pacific Northwest · Member since 2026 · 538 posts · 307 votes

1mo

Based on what you described, I’d separate this into two issues: whether the tenants had a contractual exit, and whether the agent handled the transaction appropriately.

If the attorney-review provision really allows disapproval during that five-business-day window for reasons other than rent, I would be very cautious about spending money chasing lost rent. You may be completely justified in feeling harmed, but a contractual escape clause can make the damages argument economically ugly very quickly. I’d have an Illinois landlord attorney review the exact language before investing another dollar in pursuing it.

The agent issue is different. I would absolutely send a calm, documented timeline to the managing broker: you agreed to cooperate with the tenant’s agent, compensation was never agreed upon, the brokerage-compensation section remained blank, the applicants signed, and only afterward were you asked to pay a commission with their withdrawal being raised as a possibility. Don’t frame it as a threat or demand for money. Ask the managing broker whether that sequence complies with their brokerage’s practices and obligations.

The bigger lesson is procedural.

I would never take the property completely off the market merely because a lease was signed if there is still an attorney-review contingency. I’d mark it pending, continue collecting backup interest, and only treat it as fully committed once every contractual review period has expired and the required funds have cleared.

I’d also make every non-rent charge part of the signed lease or a signed addendum—not just an email or information sheet. Application fees, pet-related charges, deposits, move-in amounts, everything. If somebody later says they didn’t understand it, you want one executed document that answers the question.

And if an outside agent is involved, settle compensation before the showing or application process goes very far: who represents whom, who is paying whom, how much, and where that agreement is documented. “Cooperate with an agent” is far too ambiguous for something involving money.

The expensive mistake here probably wasn’t choosing the wrong tenant. It was allowing several unresolved contingencies—attorney review, compensation, fees, and funds—to coexist while treating the unit as already leased.

Feel free to reach out if you have any questions.

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Greg Magiera
OP
Member since 2026 · 14 posts · 8 votes
1mo
@Michael Eskenasy

Thank you for the thoughtful response. To clarify, the tenants have now used Section 40, the attorney-review provision. Their attorney sent us written notice disapproving the lease within the five-business-day window and stating that the agreement was terminated with no further financial obligations.

Given that update, would you consider the lease issue effectively closed, or is there any realistic basis to challenge the disapproval? The commission demand and messages suggesting the tenants would withdraw if we didn’t pay came before the attorney became involved. Could that sequence matter, or would a valid attorney disapproval make it irrelevant to the tenants’ ability to exit?

I understand that the agent’s conduct is a separate issue. I’m trying to determine whether there is anything worth having reviewed regarding the cancellation itself, or whether we should focus entirely on finding a replacement tenant and addressing the agent’s conduct with her managing broker.
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John Clark

Member since 2018 · 1k+ posts · 1k+ votes

1mo

1. Don’t sign things based on “understandings.” Your proposed lease should EXPLICITLY state that lessee shall pay all commissions and hold landlord harmless from all claims for commissions and all reasonable attorneys fees and expenses incurred by you in fighting such claims. This forces the lessees to have a heart-to-heart talk with their broker before they sign anything.

2. attorney review usually specifies which provisions are unacceptable. It’s usually not “just because,” or due to business considerations.

3. probably best to move on and next time don’t make assumptions about who’s paying money to whom about what. Good fences make good neighbors and all that.

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Chris SeveneyBusiness Member

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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

1mo

cook county has a significant amount of legislation as it relates to tenant rights. personally my recommendation would be to use an agent and property manager in this location because one small error can cost you tens of thousands of dollars.

this arrangement somewhat illustrates that whereas you are not using an agent, now you have a property that still continues to be vacant and is costing you holding cost.

i'm not trying to throw shade at you. just share in my experience in real estate, trying to save a few bucks on something you do not have the expertise in typically costs you a lot more in the long run. i'm just trying to protect you from future litigation when a tenant says the hvac doesn't work or something else breaks and they want months of free rent.

we see this in baltimore where a property fails an inspection and the tenants no longer are obligated or required to pay rent until the issue is resolved and the out of state investor is left holding the bag

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George SkidisPro Member

Rental Property Investor · Belleville, IL · Member since 2017 · 875 posts · 529 votes

1mo

I have been in this business since 1993 and have never heard of such a thing. Is it possible this was some sort of SCAM?

1. Always have the screening done before the lease is offered. Payment of the app fee always comes first.

2. Did you screen the "Leasing Agent"? Are they an actual licensed realtor or a cousin.

3. The timing of the rejection letter by the attorney is significant. It arrived the day after acceptance. What is the date of the postmark? Was it postmarked before the acceptance.

From what I am reading this sounds like a scam to get you to pay an "agent's" commission up front and then they all disappear with your money.

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Greg Magiera
OP
Member since 2026 · 14 posts · 8 votes
1mo
Thanks for weighing in. A few details to clarify: no commission was paid, and the attorney’s notice arrived by email the day after the lease was signed, so there is no postmark to check. The $150 fee was an association application fee disclosed before signing.
The agent requested a commission after the signed lease had been returned and indicated that the tenants might withdraw if we didn’t pay. We had never agreed to compensate her. After we refused, the tenants ultimately had an attorney formally disapprove the lease under Section 40, its five-business-day attorney-review clause.
I’m concerned about the agent’s conduct, but I don’t have evidence that this was a coordinated scam.
I’ve owned rentals for 15 years and have dealt with plenty of difficult situations. My specific question is about where we stand now: does the attorney’s timely disapproval effectively end the lease, or could the circumstances leading up to it provide a realistic basis to challenge it? And if the agent asks us to sign a separate termination releasing everyone from all claims, is there any reason we would need to sign that when their attorney already says the lease is terminated?
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Greg Magiera

OP

Member since 2026 · 14 posts · 8 votes

1mo

I’ve owned and managed rental properties for about 15 years, so I’ve been through my share of difficult situations. I understand the procedural lesson here, but I’m really trying to get an answer to one key question.

Based on the full sequence of events described above, the tenants’ attorney disapproved the lease under Paragraph 40. Does that make the termination a done deal, or could the surrounding circumstances—particularly the timing and the agent’s commission demand—still leave room to challenge it or pursue a claim?

Also, if the agent sends me a termination or mutual-release document stating that neither side has any further claims, should I refuse to sign it until an Illinois real estate attorney reviews it? I do not want to sign away any potential rights simply because their attorney disapproved the lease.

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Henry Lazerow

Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes

1mo

In future consider using a realtor or asking the agent who helped you buy for some blank lease docs as our standard leases do not allow any 5 day back out. I have never even heard of such a thing. If your lease really had that in it, then you are likely out of luck. As a realtor, I NEVER send a signed back lease to a tenant until their rent checks have cleared. That first months rents and move in fees would normally have been what you keep if someone randomly backs out and does not move in.

Also any agent that asks for commmision that was not signed prior to the lease being signed has no claims. You are correct to refuse that. Normally all co op information is spelled out and signed prior to lease signing. You should have crossed that part out with a red line but regardless should have been agreed upon upfront. The agent should have a contract with their client before they even work with them that says how they get paid.

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Greg Magiera
OP
Member since 2026 · 14 posts · 8 votes
1mo
Thanks for your input. I think we may actually be using the same lease form. In our copy, the provision is titled “40. ATTORNEY REVIEW,” on the page labeled “Page 11 of 13,” around line 452. If you search your PDF for “ATTORNEY REVIEW,” you should be able to check whether yours includes it. It provides a five-business-day attorney-review period.
At this point, the tenants’ attorney has already emailed us formally disapproving the lease under that provision after reviewing it. That is where things currently stand.
The agent is no longer asking us to pay anything—she subsequently said she would waive her commission. My suspicion is that her agreement with the tenants may have made them responsible for her compensation if we didn’t pay, and that this contributed to their decision to withdraw. However, I haven’t seen their agreement, so I can’t confirm that.
The outstanding question for us is whether the attorney’s disapproval closes the matter entirely, given the sequence of events. The commission demand itself is no longer on the table.
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Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

1mo

This is simple....the tenants have an out of the lease. You should have kept showing and processing applications til after the expiration of all contingencies.

Also seemed like you stepped over dollars to pick up pennies. Is it worth having the unit vacant another month longer, to save what was probably like half a months rent in fees?

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Greg Magiera
OP
Member since 2026 · 14 posts · 8 votes
1mo
It is definitely worth it when you own multiple rental properties and have turnovers throughout the year. By handling leasing myself—mostly after hours—I save thousands of dollars annually. Normally, I list a unit and rent it fairly quickly, but this time I encountered an unusual situation.
At this point, it is not even primarily about the financial loss. I am trying to understand the legal issue so I know how to handle it in the future: Can an attorney simply disapprove and terminate an already signed lease under this attorney-review provision for any reason, leaving me with no option but to accept it? Or, considering the timing and circumstances, is there any action I should still take?
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Diana KhanPro Member

Attorney · 10451 Mill Run Cir #755 Owings Mills, MD 21117 · Member since 2024 · 483 posts · 177 votes

1mo

Quote from @Greg Magiera:

Illinois landlord seeking advice

My wife and I listed our rental in Palatine, Cook County, Illinois, on Facebook Marketplace. We handled the listing and paperwork ourselves to avoid hiring a leasing agent.

A tenant’s agent contacted us and asked whether we were willing to cooperate with an agent. We said yes, understanding that she represented the applicants. We never agreed to pay her commission or discussed an amount.

After viewing the property and taking several days to decide, the applicants confirmed they wanted to proceed. Both sides signed the lease, and the tenants returned it. Relying on their commitment, we turned down other interested applicants. No rent or deposit was paid, and the tenants never took possession.

After we received the signed lease, the agent requested a commission and said her clients might withdraw if we would not cover it. We declined. She later said she would waive her commission but that the tenants were uncomfortable with additional costs, including a $150 application fee and a deposit for occasional dog-sitting.

However, we had emailed her a tenant information sheet listing both fees several days before signing. Our email sending the lease to the tenants for signature also expressly listed the $150 fee and total initial payment.

There are some important details: the signed lease lists a $0 pet deposit and does not authorize pets; the brokerage compensation section was left blank. The agent had reviewed the lease beforehand and told us it looked in order.

She sent a mutual termination releasing everyone from further obligations. We declined and proposed discussing reimbursement of documented lost rent while we sought a replacement tenant.

The tenants then retained an attorney, who formally disapproved the lease under its five-business-day attorney-review clause. The notice arrived the day after acceptance. That clause allows attorney disapproval, provided it is not based solely on the stated rent.

We understand that this clause may allow them to exit, but we are left with a vacant property and have to restart the process.

For landlords familiar with Illinois/Cook County:

• Is there any realistic basis to recover rental losses in these circumstances?
• Is the agent’s handling of compensation and fee disclosures something worth raising with her managing broker or IDFPR?
• How do you handle lease signing, attorney review, and taking a listing off the market to avoid this situation?

I would appreciate practical experience or guidance on whether pursuing this further is worthwhile.

@Greg Magiera, the part I would slow down on now is the separate mutual release.

In my experience, when a deal falls apart, I separate two questions: did the contract end, and are there any other issues that may still exist outside of that contract? Those are not always the same thing. If the attorney-review clause validly ended the lease, that may resolve the issue between you and the tenants. But a separate release could be written much more broadly and could potentially cover other claims or issues you did not mean to give up.

I would not sign it just because everyone agrees the lease is over. I would have an Illinois real estate attorney read the attorney review clause and the proposed release together before you sign anything. I would also keep every email, text, timeline, and message showing when the commission was first requested and what happened after that.

You can move forward with finding another tenant while still preserving the record of what happened here.

From a practical standpoint, I would treat getting the unit rented again as one issue and deciding whether anything should be raised with the agent or managing broker as a separate one. I’m licensed in Maryland, not Illinois, so I would definitely rely on Illinois counsel for the final answer.

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Marcus Auerbach

Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes

1mo

With or without an attorney approval clause, it is tough to enforce a contract unilaterally. Its the same thing with selling a property if the buyer wants to back out, you won't make them buy it by pointing at the contract. "I just keep the EM" does not work either, because they also have to agree to that. And litigating over it will cost you way more in atty fees than the EM and you'll settle eventually for half.

Lessons learned:

1.) Don't be ambiguous with an agent. You said "yes" and now you are both claiming that meant something different. Technically you are right, bc nothing was signed, but I am guessing you knew in the back of your head what the question was about, but you chose to keep it vague. "Yes, but we don't offer commission" would have been the correct answer.

2.) Don't stop marketing until you know it's rented. We don't sign a lease until we have SD in hand and we don't hand over keys until we have 1st month rent. As much as it sucks sometimes to have a "for sure" tenant back out last minute, that's just the nature of the business. As landlords we are not entitled to the result, we still have to work for it and sometimes that means an extra lap.

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Crystal SmithPro Member

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Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes