In a previous blog, we covered what can’t be claimed during the retention period. Now, let’s take a look at what can be claimed.

As a reminder, the retention period [typically 90 days after settlement] provides the buyer with some protection against unexpected losses related to the transfer of properties.

 

what can be claimed under retention?

While the terms of the rent roll sale agreement will outline the specific claims allowable for a particular transaction, here are 4 common scenarios where a buyer may be entitled to a refund:

  1. The property is sold during the retention period, and the buyer hasn’t taken over management for the new owner, nor acted as sales agent for the sale.
  2. A landlord terminates the management during the retention period. [Remembering that mismanagement by the buyer is not an allowable claim]
  3. A property is unfit for living in, for example after a flood event.
  4. The property was vacant at settlement and remains vacant at the end of the retention period.

 

retention notice period

Along with outlining what is an allowable retention claim, the rent roll sale agreement will also outline the strict notice obligations for how the buyer must submit a claim to the seller. Failing to comply with these requirements, particularly by the due date, may result in the retention claim being deemed invalid, meaning the buyer may no longer be entitled to a refund.

 

best evidence

When it comes time to make a retention claim, make sure you’ve got the right evidence on hand to support it.

If there’s a dispute, it can often come down to the best evidence wins. The best form of evidence is in written format, so keep copies of any relevant correspondence [including texts] and detailed notes of any related phone conversations.

Being organised, communicating clearly, and ensuring your team documents everything is key. This will give you the best chance of minimising lost managements, avoiding disputes, and ensuring a smooth transition into your new portfolio.

 

we’re here to help

If you’d like to know more about rent roll retention periods or would like a confidential discussion about the current market status please feel free to reach out to our agency broking team at agencybroking@businessdepot.com.au or give us a buzz at 1300BDEPOT.

 

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