Queenslanders Beware: Are You About to Buy a Problematic Rent Roll?
O*NO! Picture this: you’ve spotted what seems like the perfect rent roll to buy in Queensland. The numbers look great, you’re dreaming about the profits, and then someone casually mentions "Form 6 checks" and "valid assignments." Uh-oh. Suddenly, your dream acquisition feels more like a potential legal nightmare. Before you dive in and sign on the dotted line, let’s make sure your investment doesn’t turn into a costly mistake.
Rent rolls can be a fantastic asset for your real estate business, but buying one isn’t as straightforward as picking something off the shelf. There’s some homework involved, and that’s where we come in. As real estate lawyers, it’s our job to help you steer clear of the pitfalls. So, grab your notepad (and maybe a coffee), and let’s go over what you really need to know before buying a rent roll in Queensland.
The Good News: Queensland Makes Rent Roll Assignments Possible
Let’s start with something positive: Queensland is one of the few states where it’s legally possible to buy a rent roll without starting from scratch. That’s right! You don’t need to go back to every single landlord to ask them to re-sign a new property management agreement with you as the new owner.
Why? Because Queensland law allows these management agreements (known as Form 6 appointments) to be assigned from the seller to you. Think of it like transferring a train ticket – it’s valid as long as the original holder had the right to transfer it and followed the proper procedures.
But (and it’s a big but), this doesn’t mean the process is simple. There are some strict rules to follow to make sure the transfer is valid. Get it wrong, and you could end up in hot water with landlords, tenants, or even regulators.
Is the Seller Actually Authorised to Sell?
Just because someone manages properties doesn’t automatically mean they have the right to sell those managements to you. It’s a bit like buying a car: you wouldn’t hand over your money without first checking that the seller owns the car, right?
The key document here is the Form 6. This is the official agreement between the property owner and the real estate agency. Here's what you need to verify:
Who is listed as the agency on each Form 6?
Does this match the seller in your Contract of Sale?
If they're different entities, is there a valid legal connection between them?
If the seller can’t prove they have the legal right to transfer these management agreements to you, it’s time to hit the pause button. This step is non-negotiable—you don’t want to find out later that the properties weren’t theirs to sell in the first place.
The History Check: Following the Paper Trail
Even if the seller is authorised to sell, what if the rent roll has been sold before? This is where things can get messy. If any previous transfers weren’t done correctly, it could come back to haunt you.
Think of it like buying a house: you wouldn’t finalise the purchase without confirming that the title is clear of any disputes, would you? The same logic applies here.
Here’s what you’ll need to check:
Were proper notices given to property owners in previous sales? Section 113 of the Property Occupations Act is your guide here.
Was the correct paperwork used?
Were all legal procedures followed?
If a previous sale skipped a step or used dodgy paperwork, it could undermine your rights as the new owner.
How Can You Avoid This
Even with the best intentions, some buyers fall into traps when purchasing a rent roll. Here are a few common mistakes we see (and how to avoid them):
Relying Solely on the Seller’s Word: While most sellers act in good faith, mistakes happen. Always verify the documentation yourself—or better yet, get a lawyer to do it.
Skipping the Previous Sales Check: If the rent roll has changed hands multiple times, there’s a higher risk of errors in the paperwork. Never skip this step!
Overlooking Section 113 Notices: Notices to property owners are a legal requirement. If they weren’t sent—or weren’t sent properly—it could invalidate parts of your purchase.
Assuming All Form 6s Are Valid: Some Form 6s might have expired or been incorrectly filled out. Review each one carefully.
Key Takeaways
Queensland law allows Form 6 appointments to be assigned, but the process must be followed correctly.
Always check that the seller is authorized to sell by verifying the details on the Form 6s.
Investigate any previous sales to ensure there’s a clear and valid chain of assignment.
Missing or incorrect Section 113 notices can create big problems—don’t ignore them!
If in doubt, get professional advice. A small investment in legal help now can save you a fortune later.
YOUR NEXT STEPS
Ready to take the stress out of your rent roll purchase?
Our team specialises in helping Queensland real estate professionals navigate the legal complexities of rent roll purchases. We’ll review your documents, flag any red flags, and explain everything in plain English (because legal jargon helps no one).
Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.