One of my favorite clients has held an exclusive leasing listing on a suburban office building for almost two years. It is good “product,” and its tenants and prospective tenants are not those who would be suffering from having their employees working from home. In other words, demand for space for these tenants’ uses (medical, professional, and assorted other uses) has been robust. That means that my client has done an excellent job filling vacancies, taking a building with some worrisome vacancy when purchased, to a far more robust investment. You would think the owner would be grateful; and you would think that the owner would, at least, respond to my client’s many invoices. But, no, this was not the case.

When my client approached me to help him with collections, one large lease commission was so far overdue that the period for recording a broker lien had lapsed. The bad news is that there were three more commissions unpaid at the time; however, we could still record a broker lien to secure a claim for those commissions, and of course we did. There was one more lease negotiation pending when my client finally decided to cut the cord and not renew the listing, and he followed through, registered the prospective tenant, and eventually finalized that lease as well. If you have been counting, that is five (5!) lease commissions which are unpaid, and only four of them are covered with two separate broker liens. That same landlord who has ignored five invoices has now received a summons and complaint, and we will be moving ahead to prosecute the claim, yes, pleadings, discovery, all to my client’s expense (for now), with the hope that we rouse this building owner from his slumber and recover the commissions, costs, and fees. The total claim today is almost $200,000!

This raises that annoying question that we have all faced at one time or another: When do you face the facts and fire a bad client? I know, there were deals to be made, leases to finalize, and commissions to be earned. It seemed like a good idea at the time to go along with Mr. Slow Pay, who has revealed himself to be Mr. No Pay. At what point do you realize that your time and your efforts are better directed elsewhere, rather than working for a difficult, and in this case, rude and unappreciative client? That time could have been spent in any number of ways: (1) with family; (2) on the golf course; or (3) looking for other clients whose needs could be met and result in payment of your fees. It pains me (it really does) to see my friend and client now having to advance thousands of dollars in pursuit of fees earned and long overdue. Will we collect? I suspect so, at some point, the building appears to be close to full and is presumably cash flowing. But how many of us want to turn accounts receivable into a recurring expense for collection?

In order to part ways with a bad client, you must have confidence in yourself, confidence that you deserve better treatment, and confidence that you will find other clients who are more deserving of your efforts and your time. That confidence should also motivate you to confront Mr. Slow Pay early on, before the hole he digs gets deeper, and is less likely to ever be filled with full payment. Managing brokers, I suggest that you monitor your younger brokers’ business, their receivables, and discuss with them whether they are working with the right sort of client. I know that at law firms, partners have to explain overdue receivables, and occasionally cut off that slow paying client. I would think that brokers’ interests are better served cutting the dead wood and clearing the way for better clients. It could be painful at first, but I assure you that it will be better for all concerned in the long run.

Be sure and ask me how this one turns out, I will be going after Mr. Slow Pay No Pay with hammer and tongs; and I would even surmise that this landlord’s attorney will lose his enthusiasm to defend the claims, just about the time he realizes that a landlord who doesn’t pay his brokers is likely to stiff his own counsel. It happens almost every time.