A sellers guide to disclosing the last rental increase

When it comes to selling a property that has been rented out, transparency and accurate disclosure are key to ensuring a smooth transaction. One area that often requires careful attention is disclosing the details of any recent rental increases, particularly if tenants have vacated the property within the last 12 months or if there is a current rental agreement in place.

As a property owner, ensuring that this information is shared accurately not only builds trust with potential buyers but also keeps you compliant with legal and ethical standards.

Steps for Accurate Disclosure

1. Complete the Rental Agreement Section of the Contract of Sale
   When preparing your contract documents, it's essential to provide accurate details regarding the rental agreement. If your property is being sold with a tenant in place, make sure that all sections related to the rental agreement are filled out in full. This includes the current rent amount, lease term, and any other relevant details.

2. Verify the Date of the Last Rental Increase
   To provide buyers with precise information, you should request a copy of the tenancy ledger from your property manager or records. This ledger tracks the rental payments and any increases during the tenancy. Additionally, you should secure a copy of the official notice that was provided to the tenant regarding the last rental increase. This notice will confirm the exact date and amount of the increase, which is critical information for the buyer.

3. Include an Annexure in the Contract of Sale
   For added transparency and clarity, it’s advisable to attach the tenancy ledger and rental increase notice as an annexure to the Contract of Sale. This documentation ensures that the buyer has access to all the necessary information regarding the property’s rental history. By doing this, you reduce the risk of misunderstandings or disputes that could arise later in the process.

Why Proper Disclosure Matters

1. Enhances Transparency
   Providing detailed and accurate rental history builds trust between you, your buyer, and the agents involved. Transparency ensures that everyone has the same understanding of the property’s financial performance.

2. Reduces Disputes
   Clear documentation of rental increases helps prevent disputes that could arise if certain rental terms or changes were not disclosed or misunderstood. Buyers appreciate knowing the full picture before making their investment.

3. Facilitates a Smoother Transaction
   When all parties are well-informed from the outset, transactions can proceed more efficiently. Buyers are more confident when they can review complete and accurate rental records, making them more likely to proceed without hesitation.

By adhering to these best practices, you not only streamline the selling process but also maintain a professional standard that can help you achieve the best outcome for your property sale. Proper disclosure is not just a requirement; it’s a key element in building positive relationships and ensuring successful property transactions.