10 Seller Documents You May Need to Review When Buying a Rental

by | BiggerPockets.com

After the purchase and sale agreement has been signed, it’s time to start reviewing the documents. If you are buying a single-family home that has not recently been used as a rental, the documents you receive may be minimal. However, if you are buying a rental house, a multifamily property, or a commercial building, you’ll likely have a lot to review.

As I mentioned at the beginning of this chapter, the purpose of the due diligence process is to make sure you are actually buying what you think you are buying. Inspecting the paperwork is a good way to do that. The seller may claim that the property’s tax bill is $1,500 per year, but how would you know for sure if you don’t investigate? They may say the property rents for $675 a month, but how would you know if you don’t check to confirm this?

The following is a list of documents you may receive from the seller. Keep in mind, not all of these will be used in every situation, because it largely depends on the type of property you are buying. However, I’ll list the most common possibilities here so you can know what to keep an eye out for.

10 Seller Documents You May Need to Review When Buying a Rental

1. Seller Disclosures

Most states, if not all, require that the seller disclose any known defects in a property before selling it. Therefore, in most deals you purchase with the help of a real estate agent, the seller will give you a pile of forms in which the seller lists anything that might be wrong with the property. You’ll want to read this document carefully, so you’ll know immediately about any issues with the property that the owner knew about. Of course, the large loophole here is that the owner must know about the problems, so this should not take the place of your doing your own investigation on the property’s condition.

2. Seller’s Tax Returns

One of the most powerful tools you can use to determine the truth about a property’s financials is the seller’s tax returns. A seller will not likely make a property look extra “cash flow-plush” for the IRS, so tax returns will likely be the most accurate representation of how the property really performs. To get these, simply ask for them! Look for any discrepancies between tax returns filed and the financial information provided by the seller, but also recognize the difference between aggressive tax write-offs and deception. If you find inconsistencies between the numbers they provided and the numbers on the tax returns, you’ll want to dig further into this.

Related: 4 Practical Ways to Keep All Your Real Estate Documents Organized

3. Current Leases

If the property is an existing rental property, be sure to dig through the lease(s) with a fine-tooth comb. After all, a lease goes with
the property, so that lease between the seller and their tenant will become the lease between you and the tenant. Be sure to pay special attention to the rental rate, the length of the agreement, and any special, out-of-the-ordinary terms written into the lease.

You don’t want to discover after you buy the property that they had a 20-year lease for $1 per month!

4. Current Rent Roll

The rent roll is a list of all current tenants, their rental amount, and other information (such as move-in date and lease term length). In essence, it’s a summary of what you’ll hopefully find in their leases, but double-check that anyway. Make sure the numbers add up to what you think they should.

5. Tenant Estoppel Certificates

If you are buying a property that is already rented, and especially if you are buying a property with multiple units, I highly recommend getting estoppel certificates from all the current tenants. An estoppel certificate is simply a form that the existing tenant fills out, letting you know what the terms of their current lease are. This can help you verify that the seller did not change the lease agreement without the tenant’s knowledge or create a fake one, just to make the income seem higher (trust me, this happens!).

6. Current Year’s Tax Bill

Be sure to verify that the tax amount you ran your numbers with is the actual tax bill. You can usually verify this online through your local assessor’s office.

7. Recent Utility Bills

Utilities are a major expense with real estate, so verify that the numbers you used for your math homework are accurate. Either ask for specific bills or call up the local utility companies and get the information directly from the source. Also verify who pays for which utility, especially if you are purchasing a multifamily property, and always check to make sure the utility bills have all been paid. When I first got started investing in real estate, I discovered several days after closing that there was a $400 garbage bill that the previous owner had not paid, and the debt was now mine. Now, I check to make sure all bills have been paid before closing!

8. Security Deposits

If the property is already rented, make sure you verify the security deposit amounts to ensure you are given the correct cash at closing.

9. Recent or Current Maintenance on the Property

Again, this is most helpful when a property is already rented. You’ll want to get a good idea of what work has recently been completed on the property and what still needs to happen. This can also help you determine whether the owner has simply been deferring maintenance to make the expenses appear less than they really are.

Related: The Loan Application: A Complete Checklist of Documentation Investors Need for Approval

10. HOA Documents

If the property is governed by an HOA, you’ll need to review the HOA’s declaration of covenants, conditions, and restrictions, more commonly referred to as the CC&Rs. This document explains all the things you can and cannot do according to the HOA. For example, an investor I recently talked with told me that he bought a condo in Chicago, only to find out a few months later that the HOA would not allow the property to be used as a rental! Don’t fall into that trap. Review the CC&Rs!

You may also review other documents, depending on the property and the rules or customs of the location in which you are buying. I simply could not list every possible document! The important thing to remember is this: verify everything.

Any documents I missed?

Comment below!

About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on BiggerPockets.com. Like… seriously… a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of “The Book on Investing in Real Estate with No (and Low) Money Down“, and “The Book on Rental Property Investing” which you should probably read if you want to do more deals.


  1. Cindy Larsen

    Brandon, this is a great list. I just closed Jan 30 on a small complex consisting of three duplexes on two tax parcels, and this list would have been very helpful. This is my first property with existing tenants, so I did a lot of research, and came up with pretty much the same list as yours, except that it never occurred to me to ask for tax returns. Since closing, I have, of course, discovered a few other things I should have asked for.

    1. utilities: The seller told me, in writing, the cost of garbage service. I confirmed it with the utility company (price for existing dumpster, recycling bins, etc.) I should have asked for all of the actual utility bills for the last year. Turns out there have been extra charges of about $60/week because the dumpster is always overfilled and tenants pile extra garbage around it, as well as the dumpster having lifted lids. it was a two yard dumpster. I asked to have a three yard one installed. Turns out there is not room for that. cheapest solution is 1.5 yard emptied twice a week, and communicating with tenants about that. I am switching to tenants paying me for garbage charges, as soon as current leases expire

    2. tenants background checks. I did not ask for this: result is I have a tenant with recent assult convictions who is such a delight to deal with that my private name for him is Angry Anthony. Every time I talk with him, he is still about 8” taller than I am, still outweighs me by at least 50 lbs of muscle, and is still angry. Unfortunately his lease doesn’t expire until the end of August.

    3. move-in checklists: You would think these would have come along with the leases and all of the other addendums. Nope. Fortunately, the tenant who moved out yesterday had a copy of his. Now I have to go back to the previous owner and ask for checklists for the other units. Otherwise, Imwill have to eat the cost of all tenant caused damage.

    4. Special questions to ask about leases and tenants: I did not ask if any of the tenants were section 8. I have no experience with section 8, and did not realize that the tenant lease I received was in addition to a section 8 contract. There was no indication in the tenant lease thatnthe tenant was section 8. The contract signed between owner and housing authority looks a lot like a lease, and it overrides the lease between the tenant and the owner. As the new owner, If you want to keep that tenant, you need to sign a new contract with the housing authority. Their contract, the terms of which are not negotiable. The previous owner did not reveal any of this. neither did the tenant. The tenant signed up to pay rent via cozy, just like all the other tenants (except Angry Anthony, who of course is being recalcitrant). Then the section 8 tenant did not pay his rent. I later found out that the housing authority sent payment to the previous owner. The tenant failed to pay his portion of the payment on time, and offerred me partial payment when I contacted him to find out why he did not pay on time. I checked, and, legally, accepting partial payment is a BAD idea, especially if you later need to evice, so I did not take his money at that time. Fortunately, I discovered the truth of the situation in time to give the tenant his 20 day notice since, fortunately, he was month to month. I finally got my rent Feb 23, not Feb 1. The tenant moved out on time, leaving me with lots of extra garbage charges. And he does not feel that he owes late fees. Now I have to turn the unit and rent it.

    Anyone else have things to ask about tenants before you inherit them? I close on another tenanted duplex next week.

  2. No seller is likely to give you their tax return, but you can ask for the Schedule E: Supplemental Income and Loss, which reports revenue and expenses for each of all their properties on one form. Even then they may balk at sharing more information than what pertains to the particular property being investigated. Otherwise, it looks like a good list and every landlord/seller should have no problem cooperating.

    • Isiah Thibodeaux III

      I have experienced this as well. Unless you’re doing a massive deal in the millions or a seller is really desperate most sellers will not share their tax returns or any information contained in them. The only way I’ve found around this which is a little easier for sellers to swallow is asking for the bank statements showing the deposits of the monthly rent. I then cross reference this with the income statement from property management and/or the rent roll and leases.

  3. Anthony Wick

    And ask if you can inspect property one last time right before you sign closing docs. And get the keys and garage door openers at close. I know, seems obvious. But, my seller “forgot” the garage door openers in his other car. I close, get the keys, go over to duplex, and discover he left lawn mower and wheel barrow in garage. But, hey, a free lawn mower and wheel barrow for me, right? WRONG! Seller hasn’t turned over garage door openers yet. He decides before doing so, and after close, to go ahead and head back to property and retrieve his things. He says to my realtor, as he hands over garage door openers; “hey, I went over to duplex to get some of my things, but the door from the garage door to the house was locked. Can you ask if I left any tools?” Me: “Ya, I locked that door on purpose. If he left any tools, they’re mine now. Tell him the next time he lets himself into my duplex he will be arrested.”

  4. Stephanie Windemuth

    This is a great list! Over time, I’ve been adding to my list that I give to the seller/agent once we reach mutual agreement. We write in to our offers that we will conduct our inspection within 10 AFTER we receive the entire requested disclosure list. This keeps us from paying for an inspection on a property that doesn’t pencil once we see real/actual numbers.

    In addition to what is listed above, I also ask for:
    – Copy of the pet and smoking policy = we continue to find out that often this information is not listed in the lease and was negotiated after the fact)
    – Copy of the Insurance policy = when properties are converted to multi-family, we find that more often than not they are still being insured as a single family residence. This insurance expense can significantly throw things out of whack if it goes from being a SFR to a 4-plex for example
    – Contracts/Services = do they have existing contracts for yard care? snow removal? pest control? trash service? Good know, good to have those contacts and amounts, and good to be able to price shop (but still have something in place for a few weeks if you need)
    – Incomplete maintenance requests
    – Any floor plans, as-builts, site diagram with numbers, etc.
    – City Certification documentation = this depends on your locale, but is becoming more prevalent
    – Itemized inventory = refrigerators, washer/dryers, stoves, landscaping and maintenance equipment (this comes up when a tenant leaves and claims the refrigerator is theirs to take)
    – List of recurring maintenance problems = we’ve had great success with this as sellers have told us things that are fantastic to know up front (but not deal breakers). Things such as unit #3 seems to regularly get a leaky faucet in the winter, etc.
    – Claim history = has the property had any insurance claims in the past 3 years? Not a deal breaker, but good to know
    – Verification of the paper/money trail: look at lease and determine security deposit amount. Look at bank statement of security account and match items to leases. Match to rent roll. Match rent roll to bank deposit statements. Match everything to estoppels.
    – List of Capital Improvements done in the past 3 years = sellers are usually eager to brag about these
    – List of upcoming cap improvements = do they foresee a roof? water heater? Unit #5 needing an upgrade?

    We ask all these questions. Some sellers disclose very little, but to our surprise, many are very forthright about the needs of a property and are willing to give information.

    • Cindy Larsen

      That is a very helpful list. thank you. I will be asking for more info from now on 🙂
      I really love having the inspection period start after they give you all the property
      documentation.I usually end up extending the imspection period as we discover things both in physical reality, and in the property documentation. This seems like a cleaner approach.

  5. Kat Malkowski

    This may seem like a silly question, but when do you request such documentation? Once it is under contract? I would imagine that would be the case for most of these items, but what out of this list would you want to see (and expect the seller to be willing to share) before even making an offer? I just can’t see a seller running around collecting utility bills and proof of security deposits for an investor who is just “kicking tires” and may not even put in an offer. Also, say you put the property under contract and then you find large discrepancies in the stated rent versus the actual (once you get copies of the leases or estoppel certificates) or the utility bills turn out higher than expected – are you able to exit the contract and if so, under what clause so that you do so legally and don’t lose any potential security deposit?

  6. Jerry W.

    I don’t have much to add, there are some pretty good lists above. One I have never seen a tax return disclosed on a SFR. Occasionally you will see a disclosure on a multifamily for that property alone. Finally in my area often subdivisions have things called covenants. They may include things like being obligated to pay part of the cost of maintaining a road, plowing snow, assessments for irrigation water, or even weed control, garbage disposal, can or cannot have dogs, livestock, etc. You should always get a list of covenants and look at the title commitment for a list of easements across the property. You might a huge lot with only half of it being able to be built on.

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