Understanding Rent Rolls: A Guide for Landlords, Investors, and Tenants

Introduction

Key Things to Know

1. 1

   A rent roll is a legally significant document that may be used in financing applications, tax filings, and property transactions, so accuracy is essential.

2. 2

   Tenants have the right to verify that their information is correctly represented on a rent roll, especially during property sales.

3. 3

   In most jurisdictions, new property owners must honor existing lease agreements after purchasing a rental property.

4. 4

   Sophisticated investors typically verify rent roll information against actual bank deposits, lease agreements, and through tenant estoppel certificates.

5. 5

   Property management software can help landlords maintain accurate, up-to-date rent rolls that can be quickly provided when selling a property.

6. 6

   For landlords, maintaining detailed payment histories as part of your rent roll documentation can help demonstrate the quality of your tenant base to potential buyers.

7. 7

   Rent rolls for commercial properties are typically more complex than residential ones, including information about triple net charges, expense reimbursements, and tenant improvement allowances.

Minnesota Requirements for Rent Roll

• Fair Housing Act Compliance (42 U.S.C. §§ 3601-3619)

  The rent roll must comply with the Federal Fair Housing Act, which prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status, or disability. The document should not contain any information that could be used for discriminatory purposes.

• Minnesota Human Rights Act Compliance (Minnesota Statutes § 363A.09)

  The rent roll must comply with the Minnesota Human Rights Act, which prohibits discrimination in housing based on race, color, creed, religion, national origin, sex, marital status, disability, public assistance status, familial status, sexual orientation, or gender identity.

• Security Deposit Documentation (Minnesota Statutes § 504B.178)

  The rent roll must accurately document all security deposits held, as Minnesota law requires landlords to return deposits with interest within three weeks of lease termination, minus any amounts legally withheld for damages or unpaid rent.

• Rent Control Compliance (Minnesota Statutes § 471.9996)

  For properties in localities with rent control ordinances (such as St. Paul), the rent roll must document compliance with local rent control regulations, including maximum allowable rent increases and any exemptions claimed.

• Truth in Sale of Housing Disclosure (Minneapolis Code of Ordinances Title 12, Chapter 248)

  For properties being sold, the rent roll must be consistent with any disclosures required under local Truth in Sale of Housing ordinances, which may require disclosure of rental income and expenses.

• Privacy Act Compliance (15 U.S.C. § 6801-6809)

  The rent roll must comply with federal privacy laws regarding the protection of tenant personal information, including financial information that may be included in payment histories.

• Lease Term Documentation (Minnesota Statutes § 504B.111)

  The rent roll must accurately document lease terms, including start and end dates, as Minnesota law recognizes both written and oral lease agreements with specific rights and obligations.

• Late Fee Documentation (Minnesota Statutes § 504B.177)

  Any late fees listed in the rent roll must comply with Minnesota's restrictions on late fees, which cannot exceed 8% of the overdue rent payment.

• Rental License Information (Minneapolis Code of Ordinances Title 12, Chapter 244)

  For properties in municipalities requiring rental licenses (such as Minneapolis or St. Paul), the rent roll should include rental license information to demonstrate legal operation of the rental property.

• Section 8 Housing Compliance (42 U.S.C. § 1437f)

  For properties with Section 8 tenants, the rent roll must accurately document Housing Assistance Payments (HAP) and tenant portions of rent, in compliance with federal Housing Choice Voucher Program requirements.

• Tax Credit Property Compliance (26 U.S.C. § 42)

  For Low-Income Housing Tax Credit properties, the rent roll must document compliance with income restrictions and maximum allowable rents under the LIHTC program.

• Utility Payment Documentation (Minnesota Statutes § 504B.161)

  The rent roll should document which utilities are included in rent and which are tenant responsibilities, in compliance with Minnesota's requirements for clarity in lease terms regarding utilities.

• Rent Payment History Accuracy (15 U.S.C. § 1681 et seq.)

  Payment histories in the rent roll must be accurate and complete, as they may be used in tenant screening reports and are subject to Fair Credit Reporting Act requirements if shared with third parties.

• Tenant Identification Privacy (Minnesota Statutes § 13.05)

  The rent roll must protect tenant privacy by limiting personally identifiable information to what is necessary for legitimate business purposes, in compliance with Minnesota privacy laws.

• Accurate Unit Information (Minnesota Statutes § 82.68)

  The rent roll must accurately describe all rental units, including size, number of bedrooms, and amenities, to comply with Minnesota's prohibition against material misrepresentation in real estate transactions.

• Rent Increase Documentation (Minnesota Statutes § 504B.145)

  The rent roll should document any rent increases, which in Minnesota generally require proper notice (typically 30-60 days depending on lease terms) before implementation.

• Eviction Record Documentation (Minnesota Statutes § 504B.285)

  Any pending evictions should be noted in the rent roll, as Minnesota law requires specific procedures for evictions and disclosure of material facts in property transactions.

• Accessibility Accommodation Documentation (42 U.S.C. § 12101 et seq.)

  For tenants with disabilities, the rent roll should document any reasonable accommodations or modifications made to units, in compliance with the Americans with Disabilities Act and Fair Housing Act requirements.

• Accurate Financial Reporting (26 U.S.C. § 61; Minnesota Statutes § 290.01)

  The rent roll must accurately represent rental income for tax reporting purposes, as both federal and Minnesota tax laws require accurate reporting of rental income.

• COVID-19 Rent Relief Documentation (Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Pub. L. No. 116-136)

  Any rent relief, forbearance, or payment plans implemented during the COVID-19 pandemic should be documented in the rent roll to accurately reflect the current financial status of the property.