The importance of identifying problems with a rent roll due diligence

We were able to determine the past income of each property managed and future income potential of the rent roll being purchase which differed from the information originally provided in the Buyer Information Pack.

The Seller, prior to placing the rent roll for sale, was unaware that there were any discrepancies within the rent roll. The Seller was confident that the employees of the business had kept up to date with the day-to-day operations of the portfolio and that documents were up to date and correctly completed.

The Seller was disappointed to find the number of discrepancies which were uncovered during the rent roll due diligence report, however, welcomed the opportunity to fix the discrepancies.

Upon employment, Opulence Consultancy undertook the review of the property management files being purchased by the Buyer. We liaised with the Seller, querying the results found and collated the information.

Upon completion of the review, a detailed spreadsheet and rent roll due diligence report was provided to the buyer which included a financial review of the rent roll, together with all search results and answers. We also met with our client, the Buyer, to discuss the findings.

Several discrepancies were found within each file ranging from, but not limited to, incorrectly completed forms, missing documents, incorrect bonds, property tasks which had been missed or not yet completed and incorrectly charged fees etc.