Quite often a purchaser accepts newly signed agency agreements in their company name as being true, correct and compliant, even if they haven't physically checked every agreement that has been returned to the vendor.
It's the vendor's job to procure every new agency agreement, isn't it? Well, yes – however, you as the purchaser have the right to review every single one of them before settlement or before you hand over a stack of money. You as the purchaser have to rely on them going forward throughout the term of your agency agreement with the landlords, so you better make sure they are compliant and correct.
Once settlement occurs, the purchaser turns up to the vendor's office with a ute or a big truck to pick up a lot of filing cabinets. Or, for the modern purchaser and vendor, hopefully a pocket-sized portable hard drive that fits into your brief case. It's not until the purchaser is back in their office that they start the process of a data merge of all the property management information across to their property management software. This is when they start going through the property files and see what's inside. In some and most instances it's too late if you've paid for the new agency agreements, and you as the purchaser are not happy with the accompanied property file. Once you pay, a vendor could quite rightly state, 'I'm not refunding your money on a file because something is missing', when they've procured newly signed agency agreements from the landlords. Let's face it, imagine telling a landlord you now want them to sign a new agency agreement again, but back in your company name because their property is coming back to be managed by the vendor. More than likely, the landlord will get fed up and look elsewhere for their investment property to be managed by a more capable and professional agency.
So to avoid these disastrous circumstances, below is a list of what I make sure is in each file before completion or settlement. This way the vendor has to not only provide newly signed agency agreement at settlement but also a property file that is complete so you as the purchaser can continue to manage the property properly:
1. Ingoing condition report for the current tenant signed
2. Existing tenant lease agreement signed
3. Tenant application forms completed
4. Photocopy of the keys given to the tenant(s)
5. Copy of the last rent increase letter if applicable
6. Copy of last tenant inspection report and letter
7. Copy of bond lodgement form with the Rental Bond Board (RBIS)
If these seven items are all prepared and ready in each property file, then you have the basics to properly manage and take over the management of the rent roll.