The Rent Roll AFL Grand Final
Play to the Final Siren
This Saturday, the Brisbane Lions and the Fremantle Dockers will run onto the MCG with history waiting at either end of the ground.
The Dockers finished the home-and-away season as minor premiers and will be appearing in only their second Grand Final. Victory would deliver them the first premiership in the club's history.
The Lions have a different piece of history within reach. They are chasing a third consecutive premiership — something the Lions previously achieved between 2001 and 2003.
Both teams reached the Grand Final the hard way.
The Dockers looked in serious trouble against Sydney in its preliminary final. Well behind late in the third quarter, they stormed home in the final term to win.
The Lions’ preliminary final against Hawthorn was even more dramatic. The momentum swung repeatedly in the final quarter. With less than a minute remaining, a much-debated holding-the-ball decision gave Hugh McCluggage the opportunity to put the Lions back in front.
He did.
The Rent Roll Parallel
There is a similar lesson for anyone buying or selling a rent roll.
During a transaction it is very easy to start reading the scoreboard too early.
A seller may have negotiated an excellent price and reached settlement believing the game has been won.
A buyer may discover several managements at risk and assume that a sizeable retention adjustment will follow.
Either assumption may prove premature.
Unlike many business sales, settlement of a rent roll may not be the final siren. A percentage of the purchase price may remain in retention for a defined period while the parties determine whether landlords stay with the incoming manager.
During that period, momentum can change.
A landlord may leave. Another may initially give notice and later reconsider. Questions may arise about whether a lost management qualifies for an adjustment. The parties may disagree about whether the contractual procedure has been followed.
Suddenly, the scoreboard looks quite different.
When the Umpire's Decision Is Debated
The finish to the Lions–Hawthorn preliminary final provides another useful comparison. Thousands of supporters can watch the same incident and reach completely different conclusions about the umpire's decision.
Rent roll disputes can be much the same.
The buyer may consider an adjustment obvious. The seller may consider it completely unjustified. Both may genuinely believe they are right.
But a rent roll transaction cannot be decided by barracking louder.
A well-drafted rent roll contract should tell the parties what constitutes a lost management, what notices must be given, what evidence is required, how any adjustment is calculated and when the retention is finally released.
That is why the wording of the contract matters — and why the procedures it prescribes should be followed carefully.
Keep Playing
There is another lesson from this year's finalists.
The Dockers did not stop playing because the scoreboard looked grim.
The Lions did not assume the game was lost when Hawthorn surged past it late in the final quarter.
In a rent roll transaction, neither buyer nor seller should allow an unexpected development to produce an emotional response that overtakes the contract.
Know the position. Check the rules. Consider the available tactics. Then make the commercial decision.
And keep playing until the contractual final siren.
COACHING LESSON
In football, the scoreboard matters when the final siren sounds. In a rent roll sale, the same discipline applies. Know the rules, follow the contract, keep your head when momentum changes — and don't start celebrating the win while there is still time on the clock.
Frequently Asked Questions
Is settlement the end of a rent roll sale?
Not always. Unlike many business sales, settlement of a rent roll may not be the final siren. A percentage of the purchase price may remain in retention for a defined period while the parties determine whether landlords stay with the incoming manager.
What can change during the retention period?
A landlord may leave. Another may initially give notice and later reconsider. Questions may arise about whether a lost management qualifies for an adjustment, and the parties may disagree about whether the contractual procedure has been followed.
What happens if the buyer and seller disagree about a retention adjustment?
The buyer may consider an adjustment obvious while the seller considers it completely unjustified, and both may genuinely believe they are right. But a rent roll transaction cannot be decided by barracking louder. The contract is the rule book.
What should a rent roll contract say about lost managements?
A well-drafted rent roll contract should tell the parties what constitutes a lost management, what notices must be given, what evidence is required, how any adjustment is calculated and when the retention is finally released. The procedures it prescribes should be followed carefully.
How should buyers and sellers respond to an unexpected development in a rent roll transaction?
Neither party should let an emotional response overtake the contract. Know the position, check the rules, consider the available tactics, then make the commercial decision, and keep playing until the contractual final siren.
Damien Ingwersen | Senior Consultant | Adamson Legal Group | damien@adamsonlegalgroup.com.au
This article is intended as general commentary only and does not constitute legal advice.