How fighting for your clients can differentiate your company

How Robert Bello and Hughes Marino went to bat for tenants in California and changed the rental game

You might not hear Hughes Marino in the same breath as Facebook and Google, but Robert Bello says the real estate advisory firm is unlike any other, offering a company culture akin to Silicon Valley giants. Bello, the general counsel, was instrumental in helping pass a law that protects tenants and buyers throughout the state of California by extending commercial transactions disclosure requirements that already existed for residential transactions.

Modern Counsel: What makes Hughes Marino a different kind of firm?

Robert Bello: The culture is incredible. We’re incredibly progressive here. The owners have deeply invested in the work environment—bringing in inspirational speakers, holding multiple team-building events, and fervently living our core values. Unlike other companies where the mission statement often has no meaning, we discuss our core values in every meeting and have had a number of team-building contests centered around the core values. You can see that our owners and staff operate by these values day in and day out. These core values deeply resonate with me because they’re the same core values I believe in.

MC: What was the genesis of the law you helped pass?

Setting Precedent

Just before moving in-house, Bello helped secure a precedent-setting opinion in California concerning wrongful termination cases. The case concerned the proper standard for determining whether an employer wrongfully terminated an employee and broke the law. Another case, decided just one week before Bello’s client’s opening brief was due, changed the causation standard for wrongful terminations in violation of California statute. Bello’s case set a new precedent by extending the prior decision into the common law wrongful termination cause of action, raising the bar, and making it more difficult for plaintiffs to succeed on such a claim.

RB: Our president and CEO, Jason Hughes, has been doing this for 28 years and representing tenants for 25. In California, conflicts of interest in commercial real estate have long existed. Unlike in residential real estate, brokers had not been required to disclose such conflicts to their clients in writing, so most tenants were completely blind to it. This concept of dual agents and same agents representing the buyer and seller or landlord and tenant just never seemed right. In the commercial world, landlords hold more power and sway. They have the long-term relationships with brokers because a typical landlord will have a number of offices open up every year in comparison to a typical tenant, who will sign a new lease every three to five years. The steady stream of business means landlords are most brokers’ primary clients. We had the legislature extend the same protections that existed in residential transactions.

MC: Why was this law important to Hughes Marino?

RB: We represent only tenants and buyers, so we don’t have any conflict of interest in our representation. In California, the prior rule was that you had to make a disclosure, but it did not have to be in writing. Most brokers just never made the disclosure, and if a problem developed, it was typically a “he said, she said” situation, making it very difficult to prove the warning was given. I really enjoy helping people get a fair shake. Most tenants don’t have an understanding of the process. In this instance, whether it’s a FORTUNE 500 company or two-person start-up, our job is to level the playing field and swing the pendulum back towards the tenant.

MC: You lobbied long and hard for making this a reality. What lasting impact will the legislation have with the tenants affected by it?

RB: We had the law extended to cover commercial transactions, so now brokers have to provide disclosure and obtain signed consent. Jason and I helped line up grass-roots support, reaching out to past clients, getting permission to share stories on how people were taken advantage of, and highlighting the structural imbalance inherent in the industry. We highlighted that, talked to clients, lobbied firms and worked with the state senator who sponsored the bill. The legislation was signed in August 2014 and went into effect January 2015. It’s been a huge change. Now, brokers have to make disclosures up front, so tenants have a fighting chance.