If you’re used to the average time it takes to close a property sale, the timeline of a rent roll transaction can come as a surprise. This isn’t a standard real estate deal; it’s a business acquisition, with layers of legal, financial and operational detail which must be carefully negotiated, documented and transitioned.
So, how long does it really take to buy or sell a rent roll? While some deals can wrap up in 6 months, others can take longer. The final timeline depends on complexity, preparation requirements, due diligence and finance approval and the responsiveness of both parties.
Below is a breakdown of what’s involved and what typically adds time to the process.
In short:
Rent rolls are not a standard sale – you’re acquiring a business, not a property
The timeline will be around 6 months at a minimum, but the process can take longer
The multiple steps of a rent roll sale include legal groundwork, due diligence, finance approval , administrative updates (for the seller), negotiation and the retention period
Buying or selling a rent roll requires planning, time, and professional advice ( accounting and tax advice).
Step 1: Legal groundwork: Heads of agreement and term sheets
Before anything goes to contract, both parties need to agree on the basic terms of the deal. This usually takes the form of a heads of agreement or term sheet (a non-binding document which sets out the key commercial points such as purchase price, inclusions, timeline and conditions).
At this stage, delays often come from misalignment between buyer and seller expectations, or a lack of clarity around deal structure. If either party isn’t well-advised, negotiations can stall or go in circles, adding weeks to the process.
Once the HoA term sheet is signed, a contract is drafted based on the commercial terms. The contract will provide conditions precedents (CPs) for elements including due diligence and finance approval.
Read more: Heads of Agreements vs Term Sheets
Step 2: Contract of Sale/Asset Agreement
Based on the HoA or term sheet, the vendor’s solicitor will draw up the contract of sale. This step often stalls the timeline as it is at this point the legal team can - and usually are - particular about specific details.
It is worth noting here; while the expectation is more-often-than-not that the HoA and contract will not vary - it is in fact where it WILL vary and it is these details which can become - for better or worse - sticking points in proceedings.
As the vendor, you want to make sure the changes are in fact what you want and as the purchaser, you need to assess the real importance of the detail to the end result.
It is easy to get caught up on things which don’t really affect the outcome of the deal.
Once the contracts are finalised and the sale is unconditional, it typically takes 30 to 60 days to completion. Upon completion, funds are disbursed with the retention funds held in trust for the retention period (up to 6 months). Once the retention period ends, a final reconciliation is done and funds are disbursed accordingly.
Step 3: Due diligence & finance approval
Once the contract of sale has been signed, the vendor is then able to release information required by the purchaser to do their due diligence and apply for finance if needed.
Due diligence is where buyers take a deep dive into the quality, stability and compliance of the rent roll.
This includes reviewing:
Management agreements and fee structures
Arrears and vacancy rates
Lease documentation
Compliance with legislation (including trust accounting)
Client retention risks.
If files aren’t in order, or if the buyer’s team uncovers inconsistencies, the timeline can stretch significantly. A well-prepared seller with clean, accessible data can speed this up.
Step 4: Administration: assignment letters and documentation
Once due diligence is complete, administration and transition occur, and the transition phase begins. This involves administrative work such as preparing assignment letters and updating agency agreements.
We see it constantly; a rent roll sale reaches a certain point, but a significant percentage of assignment letters are out of date. Updating them is labour-intensive and depends heavily on timely responses from clients. If communication is slow or poorly managed, this stage can add weeks to the timeline.
Read more: The importance of assignment letters in rent roll transactions
Step 5: HR matters: contracts and shareholder agreements
If a rent roll exchange involves staff moving across with the rent roll, HR becomes a key focus.
Employment contracts need to be reviewed or reissued, award compliance checked, and potentially new agreements drafted. If the owner of the rent roll is staying involved in some capacity (common in phased transitions), a shareholder or contractor agreement may also be required.
Delays here usually relate to unclear expectations around staff roles or slow legal drafting and review.
Step 6: Insurance, indemnities and warranties
Before settlement, buyers often request insurance protections or specific indemnities and warranties from the seller.
This could include:
Warranty against future claims
Indemnities for unpaid liabilities
Evidence of professional indemnity or business continuity insurance.
These terms can take time to negotiate, especially if either party is unfamiliar with this layer of protection, or if legal teams take a conservative approach.
Step 7: Retention period (we’re not done yet)
This is like property settlement on steroids. Once an agreement is reached, most rent roll transactions include a retention period of 90 to 180 days. During this time, part of the purchase price is withheld to cover potential losses from landlord churn.
This is a standard part of the process and needs to be factored into the timeline of the deal. The seller still has a role to play, to maintain relationships and ensure a smooth handover.
As mentioned earlier, the end of the retention period means the remaining funds held in trust for the retention period can be disbursed according to the final number of PUM and any other activity during this period.
Read more: Rent roll vendors: don’t get caught at the end of a retention period
It’s not a property exchange: it’s a business transaction
One of the biggest mistakes in the real estate industry is treating rent roll sales like property settlements. In reality, this is a far more complex exchange which requires planning, structure, due diligence and patience.
The more prepared both sides are, the smoother and faster the process will be. But even at its best, a rent roll sale takes time.
Rushing the process isn’t in your best interest, as there is a great deal at stake. Be patient, prepare for several months of dealing with this situation and loop in stakeholders who are experienced and capable to prevent the deal from being too drawn out.