5 Common Mistakes & Solutions with Rent Roll Transitions
We help many vendors with rent roll transitions and when the rent roll is exchanged, only half the job is done. The real work begins when you're about to embark on re-signing agency agreements. Careful planning and a good process is the secret to a successful transition and 100% compliant agency agreements.
Poor Data – a rent roll transition is only as successful as the data in the property management software. Do you have all fees & charges as well as contact details for all your landlords?
Not including GST or excluding GST – quite often an old agency agreement will state plus GST, however the property management software will include GST.
Not Enough Time – the larger the rent roll the longer the process. Don’t rush preparing all your agency agreements.
Proof of Identity – you’ve known your landlords for over 20 years, however you now have to identify them and prove their ownership for the new purchaser.
Poor Planning & Process – you rush into preparing all your agency agreements without a plan or process for all your staff and resources to follow.
Once you’ve exchanged there is a lot of work to begin the process of re-signing all your agency agreements. What forms are you to use? Do you have a digital signing subscription? Do you have enough staff or property managers dedicated to the transition? Some contracts are exchanged with a minimum threshold of returned compliant signed agency agreements to be presented for settlement. A successful rent roll sale is at least a minimum of 80% returned signed agency agreements from landlords.
Check your Data – do you have all the necessary fees & charges for all your landlords but most importantly, do you have correct email addresses for all owners? Most rent rolls will have one contact and one email address, even if there are two or more landlords of the property management, however you must have an email addresses for all landlords for a signed compliant digital signature. Do you have the correct personal addresses for all your landlords?
PM Software NOT Agency Agreement – make sure you check your data for correct inclusive or exclusive GST. Once your template agency agreement has been populated, the management fee will be different for every landlord. Do not go off the old agreement, make sure what the landlords has been charged is what is on the new agency agreement. You only have one shot at getting this right.
Allow enough Time – rent rolls up to 250 properties need 4 to 6 weeks from exchange until settlement to have them all back signed and ready to go. Rent rolls up to 500 need minimum 6 weeks to 8 weeks and rent rolls greater than 500 need a minimum 8 weeks.
POI & POO Landlords – its important all your landlords are identified for the rent roll sale. This can be a challenge when you are trying to obtain a signed agreement from your landlord. Some landlords will be reluctant to provide a copy of their DL or passport which is essential for identification. Ways around this are video conference calls, facetime etc. Identifying their ownership is also critical and water/council rate notices will suffice, however in some instances a title search may be needed which is expensive.
Have a Proper Plan – get organized with what resources you need, what forms template to use and if it talks to your software, map out all your required data, obtain missing email addresses and personal addresses of landlords, set weekly team goals to achieve and most importantly have a workflow of each stage in the process and what milestones need to be achieved. Have daily meetings to begin with then weekly catch-ups to review problems, challenges and celebrate wins with getting compliant agreements back from landlords.
In NSW over 80% of rent roll sales are asset sales and re-signing of agency agreements. If you implement a team to manage the re-signing process, what seems to be daunting can be turned into a very successful transition for both the vendor and purchaser.
If you are thinking of selling or even if you have your buyer but you’re not sure what to do next, please do not hesitate to call or email Matt Ciallella on 0414 668 972 or matt@mcrrb.com.au.
