Encyclopedia
Rent roll
A list of a building's tenants, rents and lease terms.
For example: A buyer checks the rent roll against leases and estoppels. (Illustration only, not a real deal.)
This is a general industry term with no single official definition. Your lease or contract wording controls.
Example only, not a real client. Say you are looking at a small strip centre that the listing describes as fully leased. On the rent roll, you see two of the five leases end within a year, one tenant is still on free rent, and another pays well above today’s market. Your offer reflects that the income is less secure than the headline suggests.
What I’d tell a friend
Read the rent roll line by line. The totals tell you less than the dates, the options and how each rent compares with today’s market.
Why it matters to you
It's the summary a buyer relies on to value the building. If it doesn't match the leases, or hides free rent or arrears, the price is based on income that isn't there.
How to use it in your deal
Buyers should check the rent roll against every lease, amendment and estoppel certificate, and against bank deposits, because summaries can contain mistakes or optimistic numbers. Look for leases ending soon, below-market rents, free rent periods, tenants in arrears and options to renew or terminate. Sellers should update it carefully and disclose known issues. Landlords should keep it current for management.
Lenders use it to size loans and may ask for a certified rent roll signed by the owner at closing. A good rent roll also shows each tenant's share of operating costs, recovery type, security deposit and any guarantees, so you can see real income, not just basic rent.
Tenants rarely see the full rent roll, but a landlord's buyer will, which is one reason estoppel certificates arrive in your inbox before a sale. Owners selling should ask your accountant to reconcile the rent roll to the financial statements before listing; mismatches found by a buyer during subjects tend to become price cuts.
Mistakes I see
Relying on the summary alone. Missing free rent. Ignoring arrears. Outdated data. Counting a tenant who has given notice as stable income. Listing month-to-month tenants as if they had long leases.
In BC and Vancouver
No statute governs rent rolls; contract terms and representations in the purchase contract matter.
Official sources: CanLII (court decisions)
What to look for
For each tenant, check the rent, start and end dates, renewal options, deposits and any free rent or allowances still owed. A cluster of leases ending at the same time is a real risk to income.
Compare each rent with market. Rents above market may drop at renewal, while rents below market can be an opportunity if the lease ends soon.
Checking it against the leases
A rent roll is a summary prepared by the seller, and errors are common. Compare it with the actual leases and amendments during due diligence.
Ask for estoppel certificates from key tenants before you firm up. They confirm the main lease facts directly from the tenant.
Your subject period, in order
Subject periods go fast. This is the order I work in so nothing important is left for the last day. General information, not legal advice; your lawyer drafts the actual terms.
- Day 1: one written document request. Leases and every amendment, the rent roll, two or three years of operating statements, the property tax and assessment notices, utility bills, service contracts, insurance, any building or environmental reports, and for a strata lot the strata documents and minutes.
- Days 1 to 5: leases against the rent roll. Check each tenant’s rent, term, renewal options, deposits and any free rent against the actual lease. Then check the bank deposits or ledger, so you know the rent is collected, not just billed.
- Days 3 to 10: additional rent. Compare what tenants pay in operating costs and taxes to what the building actually spends. Check that recoveries follow each lease.
- In the offer: a rent roll warranty. Attach the rent roll and have the seller confirm it is accurate, with wording your lawyer sets up to survive closing.
- As a subject: signed estoppels from the main tenants. Each key tenant confirms in writing their rent, term, deposit, options and that there are no disputes. If a tenant’s answer doesn’t match the rent roll, you find out before you go firm.
- Building, environmental, zoning and financing run in parallel. Order inspections early, since reports take time.
- Before removing subjects: list anything you found, and decide whether it means a price change, a repair credit, more time or walking away. Ask for any extension in writing before the deadline.
Questions to ask before you sign
- Does it match leases?
- Who's in arrears?
- When do leases end?
- Are there free rent periods?
- What options exist?
Keep reading
Related terms: Estoppel certificate, Net operating income (NOI)
Working through this right now? Questions are free. Book a 15-minute call or call or text 604 256 2002, and I’ll give you a straight answer.
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.