The rent roll said one thing and the leases said another

The situation

Kittipong bought his first rental property, a townhouse, several years earlier and had managed it himself in the evenings after finishing his shifts as a court clerk. It had gone well enough that he and his wife Anong began talking about a second property, something bigger, that could produce steadier income without doubling the hours he spent on it. A fourplex in Brampton came up that spring, listed by a seller named Haruto who managed the building directly rather than through a property manager. Haruto's listing package included a rent roll showing all four units occupied and producing a combined monthly income that, once annualized, made the purchase price look reasonable and comfortably supported the mortgage Kittipong and Anong were qualifying for.

The offer went in, the offer was accepted, and a closing date was set about six weeks out. Kittipong asked for copies of the actual leases as part of his conditions, partly out of habit from his work in the court system and partly because Anong had asked him to be thorough. One evening after his shift, he sat at the kitchen table with the lease copies in one stack and the rent roll printout in the other, and started matching them unit by unit. Two lined up exactly. The third unit's lease specified a monthly rent nearly four hundred dollars lower than what the rent roll claimed the tenant was paying. The fourth unit had no lease attached at all, just a note that the tenant was on a verbal, month-to-month arrangement.

He read through it twice before he said anything to Anong. It was not a huge discrepancy on paper, a few hundred dollars a month on one unit and an unverifiable arrangement on another, but it was enough to change how the whole deal looked. If the real income was lower than represented, the price no longer made the same sense, and the mortgage qualification the bank had approved was built on a number that might not hold up.

Kittipong could not simply pause everything to sort it out himself. Between his job and the property he already managed, he had almost no spare hours during the work week, and the closing date was fixed. He and Anong decided they needed someone who could look at the documents quickly, tell them plainly whether the discrepancy mattered, and deal with the seller's side directly while Kittipong kept working his regular schedule.

What the other side was relying on

Once we had the file, the pattern behind the numbers became clearer. A rent roll is only a summary; it is the leases and, where available, direct confirmation from the tenants that establish what a building actually earns. Sellers are not always trying to mislead a buyer when a rent roll runs ahead of the paperwork, sometimes a rent increase was agreed verbally and never formally papered, but the effect on a buyer is the same either way: the income used to justify the price is not the income the units can be shown to produce.

What Haruto's side appeared to be counting on was fairly ordinary, and worth naming because it is common in smaller multi-unit deals. Buyers often treat the rent roll as the final word and only skim the leases behind it, especially under time pressure with a closing date already set. There was also a practical reality working in the seller's favour: a buyer juggling a full-time job and an existing rental has limited hours to dig into a stack of paperwork, and a seller managing the sale personally, without an agent double-checking every figure, has more room for a number to drift from what the leases actually support.

There was nothing in the file suggesting outright fraud. The fourth unit's tenant genuinely was on a month-to-month arrangement, and interviews later confirmed the rent had crept up informally over about a year without a new lease being signed. But an unwritten arrangement is worth less to a buyer than a signed one, because a new landlord has no document to enforce it against, and a tenant on a verbal deal can simply say the rent was lower than claimed. The third unit's mismatch turned out to be an old lease that had never been updated when the rent changed, leaving a document on file that no longer reflected reality.

None of this made Haruto obviously dishonest, but it meant the price on the table had been built on numbers that would not survive scrutiny, and that the risk of that gap sat entirely with whoever bought the building unless it was fixed before closing. The multiplex market in the region rewards a clean, fully tenanted rent roll with a higher price, which gives every seller of this kind of property a quiet incentive to round figures up rather than down, even without any intention to deceive anyone.

It also mattered that Haruto managed the building alone. A larger landlord with a property manager and standardized paperwork is less likely to have a lease that quietly falls out of date, because rent changes tend to get processed through the same system every time. A self-managed fourplex has no such backstop, and small gaps between what is charged and what is written down can sit unnoticed for years until a sale forces someone to look closely.

What we did

1. Requested written confirmation directly from all four tenants of what they actually paid each month and under what terms, rather than relying on the seller's rent roll, because a tenant's own statement carries more weight than a landlord-prepared summary and let us see precisely where the figures diverged from reality. We approached each tenant separately, framing it as routine due diligence on a change of ownership, so no one felt pressured to defend a number the outgoing landlord had reported.
2. Compared every lease against the rent roll line by line and put the results in writing before approaching the seller's side, so that when the discrepancy was raised there was no room to argue about the underlying facts, only about what should be done to fix them. That comparison became the basis for every later conversation with Haruto's side, since a dispute grounded in a shared document is harder to talk around than a phone call nobody can verify later.
3. Reviewed the mortgage commitment to see how the projected income had been used, since part of the approved loan amount had been built on the inflated rent roll figure, and the client needed a clear answer on whether the financing still held at the corrected numbers before committing to close. Lenders qualify a rental purchase partly on expected income, so a lower confirmed rent could, in principle, have reduced the loan a bank was willing to approve.
4. Raised a formal price adjustment request with the seller's side, laying out the corrected income figures unit by unit and showing that the purchase price, calculated the same way the original offer had valued the building, no longer matched what it actually produced. The request included the tenant confirmations and the lease comparison so Haruto's side could verify the numbers independently.
5. Negotiated a reduction to the purchase price that reflected the true combined rent rather than walking away from the deal entirely, since Kittipong and Anong still wanted the property and a fair price was a more realistic outcome than starting over. Walking away would have cost weeks of lost time and a fresh financing approval, with no guarantee the next property would be any cleaner.
6. Documented the corrected rent figures and the fourth unit's unwritten arrangement in a formal schedule attached to the purchase agreement, so that neither side could later claim a different understanding of what income the building was actually generating at closing. That schedule became the reference point for the lender's final review and for Kittipong's own records as landlord.
7. Advised the client to secure a new written lease from the fourth tenant as soon as possible after closing, since a landlord who wants to rely on a rent figure going forward needs an enforceable document behind it, not a history of verbal understandings that can shift with every new conversation. A verbal arrangement inherited from a previous owner creates no obligation to the new one.
8. Coordinated the revised closing timeline with the lender so the mortgage amount and the corrected purchase price stayed aligned right through to the final closing date, avoiding a last-minute financing gap that could have delayed or derailed the transaction altogether. Any slippage between the approved loan and the negotiated price at this stage would have forced a fresh round of underwriting.
9. Kept the client updated by email and short calls scheduled around his shifts rather than requiring meetings during the work week, since Kittipong could not take time off court to attend in-person appointments while the deal was being worked out. Anong, who works as an electrician on her own rotating shifts, reviewed each update after her workday ended and flagged questions before the next call.

The outcome

The deal closed roughly three weeks later than originally planned, at a purchase price reduced by an amount that reflected the real combined rent across the four units rather than the figure on the original rent roll. The adjustment was not large in absolute terms, but it meant Kittipong and Anong were not paying a multiplex price for income the building was not actually generating.

The fourth unit's tenant agreed to a new written lease shortly after closing, at a rent close to what had informally been paid, which gave Kittipong an enforceable document where before there had been none. The third unit's tenant stayed on the corrected rent going forward, which was lower than the rent roll had claimed, meaning the building's actual monthly income was and remains modestly less than what Kittipong and Anong had first been shown when they made their offer.

Because the discrepancy was caught and dealt with before closing rather than discovered afterward, there was no dispute to unwind, no overpayment to try to recover, and no gap between what the mortgage assumed and what the building could actually support. The delay cost a few weeks and some back-and-forth with the lender, but it was manageable set against the alternative of closing at the original price and finding out only after the fact that two units were paying less than represented.

Kittipong went back to managing both properties around his court clerk schedule, with Anong now helping track the leases so a gap like this would be less likely to reappear unnoticed. The file that matters going forward, the actual signed leases rather than a summary sheet, now matches what each tenant is paying, and both units without a proper written lease at the time of purchase have one on file today.

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