One of our investment clients recently asked us about some of the income property forms involved in selling their seven unit complex. While this client does have a manager on-site, he was still concerned about the procedures, paperwork, and expectations for these forms.
Tenant Estoppel Certificate: This form verifies that the tenant/landlord/manager/new buyer all agree on the stated monthly rent, security deposit, lease dates (if any) and ownership of any appliances. Typically the tenant is provided a copy once the property is going into escrow and then it is signed by all other parties. In addition to the estoppels, landlords usually provide copies of any leases or rental agreements on the properties.
Profit & Loss Statements: These come in many forms as every landlord/manager will have their own way of accounting. Most are a simple one page sheet showing the rental income and expenses. The typical sales contract will ask the seller to provide such a statement for the last 12 months, though we often get a calendar year statement or two years, since it is kept that way for tax purposes anyways. Sometimes the buyer may ask to see additional information such as utility bills or details on recent repairs, but this is requested after the basic report is provided.
Do you have questions about preparing to sell your income property? From the paperwork to negotiations, to wrapping up the deal so you can move on, Charlemagne Int’l Properties is available to help our clients every day. If you would like to discuss how we can help, please give us a call.
Contact Norma at 310.493.8333 or Norma@CharlemagneProperties.com