Information on buying/selling a Real Estate Agency Rent Roll

A Rent Roll can be acquired either with or without the agency business that operates it.

Rent Roll sales contracts must accommodate many eventualities and provide a mechanism for the transfer of property owners’ “appointments to act” in favour of the Rent Roll buyer. The Purchase Price is usually arrived at by applying a goodwill multiple to the gross annual management income derived from each property under management. Thus the actual settlement sum will be dependent upon the final inventory of managed properties at completion date.

The contract must also provide either a reasonable method of allowance to the buyer of a refund in respect of property is a manager with management of which in this within a short time (usually three months) following completion.

Because the transfer of property management to the buyer is dependent upon property owners completing and signing new appointments buyer’s favour, the contract should also provide for second and third settlements to accommodate the late return of such documentation from owners and the sign-up of additional properties over that period by the Seller.

Be sure to engage experienced legal advice in any rent roll transaction with which you are involved otherwise your investment is at risk as occurred in this situation.

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Last updated: 29 January 2020