"After his divorce and bankruptcy, Jerry moved into the nicest furnished apartment he could afford."

Frequently we receive collection files at Rent Recovery Service from someone who recently acquired their building without any tenant documentation, leases or original applications. As a landlord myself, I have a difficult time understanding how this occurs. If you find yourself under contract to purchase an income producing property, the life blood of that purchase is the income derived from the tenants.

During a due diligence period, request copies of the leases, tenancy agreements, rent receipt books, and/or bank deposits to verify income. Demand estoppels from each tenant and compare all the documentation for consistency. In the even the seller can not supply the documentation, create it.

If you are purchasing a foreclosed property from the lender and no documentation is available, the lender should cooperate in having applications filled out and screening reports run on the existing tenants. Taking the time to create tenant files that are correct and current can save you incalculable thousands in the future.

<< Tenant File Maintenance | Index | Fraud >>