Compliance on Rent Rolls – Share Sales & Asset Sales
Quite often a purchaser accepts newly signed agency agreements in their company name as being true, correct and compliant. They haven't physically checked every agreement that has been returned to the vendor for settlement of an asset sale, or re-sign of new agency agreements. So, why is it we see so many management agency agreements just before first settlement are rejected? Below are some common errors or problems with non-compliant management agency agreements. This also applies for a share sale when you’re buying a company or selling a company and there is no re-sign of management agency agreements.
So many mistakes are made at the beginning of the re-sign process before a new management agency agreement has even been sent out, especially when using DocuSign or other digital signing applications. A proper process and careful audit of your property management data is imperative.
Incorrect Corporation Licence and/or ABN – Many agreements are with an individual’s licence and not the corporation licence number, especially on company share sales.
Incorrect Corporation Name and/or ABN – Sometimes landlords purchase properties in a company name. Take the time to do an ABN search.
Incorrect Directors listed – If there are more than one Directors you will need both signatures. If there are two or more directors in the company then you will need any of two to sign.
Directors need to Personally – Directors cannot sign as a company. As an individual Directors need to sign themselves, not as the company.
More than one Landlord name – Quite often agencies only hold one email address for correspondence, however when signing a compliant agreement all owners need to sign.
Poor Data Preparation – Check you have all email addresses for landlords that are required to sign. Quite often properties are in both couples’ names. You will need all email addresses otherwise the digital signing application will sign on behalf of both people if chosen.
It is so important that management agency agreements are signed correctly and the data is prepared carefully. Take the time to carefully check all directors names, ie do company searches, and make sure you have the correct individuals names and email addresses for the DocuSign process.
