If you're selling or buying a rent roll, it’s easy to assume the process mirrors a standard property transaction. Once you hit the contract stage, especially the Heads of Agreement (HoA), you’ll realise this type of deal is a lot more nuanced.
Unlike a straightforward property exchange contract which is usually only a few pages, a rent roll agreement needs to cover everything from retention periods to restraint clauses and employee transfers. This specialised transaction calls for more than your everyday conveyancing templates.
Too often, negotiations stall at the HoA stage, not because the deal is flawed, but because the process isn't managed by a lawyer who truly understands rent roll transactions. This is when things start to drag, time is wasted and the risk of a lost deal increases.
When you connect with BDH Solutions , you’ll now have access to our in-house lawyer Pat Gowans, who specialises in Heads of Agreements and other legal matters related to rent roll exchanges.
Here’s a look at this side of the process from his perspective:
Challenges of HoA during a rent roll transaction
In a rent roll exchange, the Heads of Agreement should outline the commercial terms of the deal before the formal contract is drawn up.
Here’s what can throw things off track:
1. Excessive details
Rent roll sales have more moving parts than most agents expect, but when the HoA tries to cover too much too soon, both parties can get stuck debating clauses which won’t have a great deal of impact on the final deal. This over-analysis creates fatigue and enthusiasm starts to wane before the formal contract is even drafted.
2. Too few details
On the other hand, a rent roll exchange isn’t only about a lump-sum figure. There are adjustments, clawbacks, restraint periods, due diligence access and handover expectations to consider. If the HoA is too vague or overly simplistic, it creates confusion during and after the retention period.
3. Fixating on the small stuff
It’s not uncommon for deals to slow down because one party is hung up on a minor clause (for example, whether restraint terms should be 12 or 15 kilometres). These micro-disputes can derail momentum, especially if there’s no clear commercial sense-check guiding the conversation.
What to do instead
The key to a smooth rent roll transaction is setting the right tone and structure from the start. That means having your HoA drafted by someone who knows what matters and what doesn’t in this kind of deal.
If you’ve never completed a rent roll transaction before, or even if you have worked through a few, it’s worth revisiting the difference between a term sheet and a Heads of Agreement.
Read more: HoA vs Term Sheet
A properly drafted HoA should:
Reflect the commercial heart of the deal, not try to lock down every legal clause prematurely
Anticipate the specific elements required in a rent roll transaction (retention terms, trust account transfer timing, staff handover, etc.)
Leave space for the formal contract to do its job without doubling up or overstepping
Avoid time lost to the HoA agreement
Having a legal advisor with real rent roll experience makes all the difference. Pat Gowans, our new legal director at BDH Solutions, has extensive experience in these complex transactions and understands how to keep them practical and focused. He knows which clauses matter, which ones are nice to have, and which ones increase time spent and delay a successful exchange without delivering benefits.
Preparing to sell or buy a rent roll? Want to avoid delays? Get in touch with BDH Solutions before the paperwork phase.
Heads of Agreement FAQs
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This is not recommended. Generic templates often miss the complexities specific to rent roll deals, including things like how clawbacks are structured, what happens if properties drop off during retention, or how staff handover is managed. Using a template designed for property or business sales can lead to delays or disputes later.
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Before the HoA is drafted. Getting advice early means the document will strike the right balance—capturing the essential terms without turning into a pseudo-contract. It also sets the tone for a smoother contract phase later on.
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No. The HoA is the framework that helps both parties commit to progressing the deal. The formal sale contract will build on it, fleshing out the legal details and obligations. That’s why it’s important the HoA doesn’t go too far or contradict what will later be negotiated in the final agreement.