The Rent Roll Coaching Team – Part 2
When the Game Gets Heated
Sometimes the best advice is to keep the players on the field.
Rent roll transactions can become emotional affairs.
A management appointment is lost. The seller blames the buyer. The buyer blames the seller. Someone produces an email written three weeks earlier. Voices rise. Positions harden. Before long, everyone has forgotten about the rent roll and is concentrating on winning the argument. That is when the coaching team earns its keep.
The broker and solicitors cannot make the commercial decisions for the players. But neither should they sit quietly in Row Z while the game descends into an out-of-control scrum. Sometimes their most valuable contribution is to calm the game down and keep the players on the field.
A good starting point is the contract. If several managements have been lost, does that justify terminating the transaction? Or has the contract already allocated the risk through a retention, adjustment or dispute-resolution mechanism?
That distinction mattered in Arete Real Estate Pty Ltd v realT Properties Pty Ltd [2025] QCA 133. The rent roll comprised 46 properties. Before settlement, the owners of 11 properties - almost 24% of the rent roll - gave notice terminating their appointments. The buyer purported to terminate the whole contract.
The contract, however, already contemplated that appointments might be lost. Ten per cent of the purchase price was to be held for 180 days and adjusted if properties left the rent roll. The Court of Appeal held that requiring all 46 appointments to remain was inconsistent with the contractual machinery the parties had agreed.
The buyer had no right to terminate and its failure to complete was a breach. Damages were ultimately assessed at $104,678, with the buyer also exposed to the substantial legal costs of the litigation and appeal. A serious commercial setback had become a far more expensive legal defeat.
No solicitor can guarantee harmony. Occasionally, the referee really does need to blow the whistle. But before declaring war, good advisers should ask:
When the temperature rises, do not automatically reach for the termination clause. First read the contract, identify the agreed remedy and take a commercially sensible course.
Frequently Asked Questions
Does losing several management appointments before settlement automatically justify terminating a rent roll contract?
Not necessarily. It depends on whether the contract has already allocated that risk — for example through a retention, an adjustment mechanism or a dispute-resolution process. In Arete Real Estate Pty Ltd v realT Properties Pty Ltd [2025] QCA 133, the Court of Appeal held that losing 11 of 46 appointments did not entitle the buyer to terminate, because the contract already contemplated that appointments might be lost and had a retention mechanism to deal with it.
What happened in the Arete Real Estate v realT Properties case?
Before settlement, the owners of 11 of the 46 properties in the rent roll gave notice terminating their management appointments — almost 24% of the roll. The buyer purported to terminate the whole contract, but the Court of Appeal found it had no right to do so, because the contract already held back 10% of the purchase price for 180 days and provided for adjustment if properties left the rent roll. The buyer's failure to complete was a breach, and damages were ultimately assessed at $104,678, on top of substantial legal costs.
What role do the broker and solicitor play when a rent roll transaction becomes confrontational?
They cannot make the commercial decisions for the buyer or seller, but they should not stay silent either. Often their most valuable contribution is to calm the situation down and keep both parties engaged with the transaction, rather than letting the dispute overtake the deal.
What questions should advisers ask before reaching for a termination clause?
What is actually in dispute? What does the contract say? What remedy did the parties agree? Can the undisputed part of the transaction proceed while the disputed amount is quarantined? Is there a commercially sensible way through the issue?
Is disputing or terminating a rent roll contract ever the right move?
Yes — no solicitor can guarantee harmony, and sometimes termination genuinely is the correct step. But it should follow, not replace, a careful read of the contract and an assessment of the agreed remedy, rather than being an automatic reaction to a heated moment.
Damien Ingwersen | Senior Consultant | Adamson Legal Group | damien@adamsonlegalgroup.com.au
This article provides general information only and does not constitute legal advice. Advice should be obtained about individual circumstances.