Advice On Rent Rolls From Seller For 1st Rental

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Advice On Rent Rolls From Seller For 1st Rental

Dustin Murphy
Investor · Capital Region NY State · Member since 2020 · 22 posts · 9 votes

I am in escrow for my first rental property and asked for rent rolls to be provided on the contract as one of the contingences. The sellers attorney sent an email stating his clients informed him the rents and deposits were the amount each unit was but nothing showing tenants paying their rents. How should the rent rolls be presented to me from the seller to show rents are actually being paid? I am getting nervous that they are not paying because we are now about 2 months in escrow and countless times asking for rent roll to be sent and we only got the one email from the attorney stating the amounts. Anyone have any advice how I should proceed? I do not want to inherit tenants that are not paying rent in the giving state of the eviction moratorium.

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Bjorn AhlbladPro Member
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
5y

At this point I would want Estoppel Certs completed and signed by tenant and seller. The seller's attorney will know exactly what you want and why. If I did not get that; in today's climate I would walk-especially in NY.

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  • Laticia Braxton
    Real Estate Consultant · Joppa, MD · Member since 2015 · 218 posts · 178 votes
    5y

    The rent roll will show you rents charged, unit numbers/sizes and lease term, but you really want to see the A/R report and each tenant’s rent ledger to get a true sense of what you’re dealing with. Send the attorney another email requesting everything and keep sending that email everyday until you get a satisfactory response. 

    Hope this helps and best of luck to you!

    Laticia 

    1Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    5y

    At this point I would want Estoppel Certs completed and signed by tenant and seller. The seller's attorney will know exactly what you want and why. If I did not get that; in today's climate I would walk-especially in NY.

    3Reply
  • Dustin Murphy
    OP
    Investor · Capital Region NY State · Member since 2020 · 22 posts · 9 votes
    5y

    @Laticia Braxton , @Bjorn Ahlblad Thank you both for the advice!

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    You have to be very clear when you ask for something.

    I agree with Bjorn. Ask for an estoppel certificate (also called estoppel form or agreement). The estoppel certificate is a form filled out by the tenant and then confirmed by the Landlord and then accepted by you. It's supposed to ensure there are no surprises after closing. For example, you buy the place and the tenant could claim the Seller allowed them to paint the walls black or that their security deposit was twice what the Seller claimed. How will you know? An estoppel certificate fixes this problem.

    Some things it may include:
    1. Tenant name, contact information, and address
    2. Occupancy date
    3. Is there a written lease? If so, review it to ensure it matches the estoppel certificate
    4. Are there any modifications to the written lease?
    5. Are there any verbal agreements or arrangements between the current Landlord and Tenant?
    6. Current lease term (expiration date, month-to-month)
    7. Current rent rate
    8. Rent due date
    9. Security deposit amount
    You can find plenty of examples by searching for "tenant estoppel certificate doc" or exchange "doc" with "pdf" for more options.

    Here is an example and explanation: https://eforms.com/rental/esto...

    Some have a lot of legal jargon but this document does not need to be so detailed. This is an important tool for anyone buying a tenant-occupied property.

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  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    5y

    Rent rolls come in all shapes and sizes.  Some are very formal and done by professional software, some are done by hand or in excel.  I have had sellers show bank statements as well.  Some I am 100% convinced were just created they are so lame lol. It all depends on who is managing.  If there is a manager or a professional company involved you will get a nice printout from their software.  If it is self managed, anything is possible.  

    Given the attorneys incredibly weak answer I would not accept it.  You were smart enough to put it in the fully executed contract and they are not providing it for some reason. So that opens the door to you asking for more.  All they can do is say no.  Just stick to your guns though,  you deserve an answer on this.   

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  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    5y

    @Bjorn Ahlblad and @Nathan Gesner have you covered. If they can not provide proof of rents, you can't buy it. No one will buy it if they have any sense in their head. A rent roll is just a piece of paper, if it can't be backed up with proof of bank account payments of Cozy ledgers, it's just paper in the wind...or down the drain for those who accept it as true.

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  • Dustin Murphy
    OP
    Investor · Capital Region NY State · Member since 2020 · 22 posts · 9 votes
    5y

    @Nathan Gesner @Scott M. @Jonathan Greene - Thank you for the advice. Attorney has sent the request. We shall see what happens now.

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