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THE BUSINESS OF SELLING OR BUYING A RENT ROLL

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THE BUSINESS OF SELLING OR BUYING A RENT ROLL

If you’re thinking of either adding to your Realty business, or otherwise selling up either all or part of your existing real estate business, then it is essential to document the terms of such agreement to ensure that your interests are protected.

Under a typical rent roll sale agreement, the factors to consider amongst others include essential operative terms focusing on :

  1. the due diligence provisions - you will need to review each file for every property owner/property to satisfy yourselves that the property is worthy of purchase as part of the rent roll, and essentially that the correct form of management agreement is in place such that the management of the property is capable of assignment;
  2. the finance clause - you need to enable enough time to be in a position satisfy your lenders requirements and investigations;
  3. the Supply Right Factor - this is the sum ("multiple") that you agree is to be paid against every dollar of income of the respective management agreement for each property;
  4. restraint of trade provisions - when buying a rent role it is essential to achieve best prospect to limit and restrain the Seller from undertaking such actions which may for contrary to the intention of you buying the products.
  5. Employee transfer with the Rent Roll sale.

As per our discussion I note your comments that it is proposed that employees may be an option to the agreement, and that is ultimately dependent upon your anticipated needs post settlement. Additionally we should advise that it is to be expected that if you operate as a corporate entity, that you and your partner will in all likelihood be expected to entry into a guaranteed indemnity the purchase.

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