Due Diligence: The Documents a Serious Buyer Requires for Your Plex

ImmoMulti — a direct buyer of income properties on the North Shore — sees it in every transaction: a plex sells on paper first. Before signing, every serious buyer runs due diligence, a methodical verification of the leases, the numbers and the condition of the building. The seller who hands over a complete file at offer stage shortens the conditions period, cuts the risk of renegotiation, and projects the image of a well-managed property. This guide, from the owner-seller's point of view, walks through the eight blocks of documents you will be asked for on your plex or multiplex — and how to gather them ahead of time.

What is due diligence when selling a plex?

Due diligence is the period during which the buyer verifies the leases, financial statements, taxes, physical condition and title of the property before removing conditions. It is framed by the purchase promise. A seller who provides a complete document file speeds up this stage and secures the transaction.

When a buyer submits a purchase promise on an income property, it is almost always conditional on their satisfaction with various documents and verifications: review of the leases, financial analysis, inspection, financing, title verification. That is due diligence. During this period, the buyer seeks to confirm that the building is worth the price offered and hides no surprises.

The seller's role is not passive. According to the OACIQ, the seller must provide the broker with available documents supporting their answers — notably invoices, warranties, plans, estimates, permits, reports, notices and leases. The more complete your file is from the start, the fewer reasons the buyer has to delay, renegotiate, or walk away.

Source: OACIQ — Guideline "Verification, information and advice" (duty to inform).

What financial and rental documents must you provide for a plex?

The leases in effect, the rent roll and the financial statements (rental revenues and operating expenses) are the heart of a plex file. The OACIQ indicates that, for an income property, the seller must provide the leases and documents related to the rental units in order to establish the revenues and expenses of the property.

The buyer of a multiplex is first paying for an income stream. Three documents let them validate it:

• The leases in effect — one signed copy per unit, including schedules, rent-modification notices and any special agreements. The OACIQ confirms that copies of the leases in effect must be provided for an income property.
• The rent roll — a summary table showing, unit by unit, the current rent, the lease start and expiry dates, the services included (heating, parking, appliances), arrears and any deposits. It is the tool that lets the buyer calculate the real gross income of your plex.
• The financial statements (revenues and expenses) — the detail of rental revenues collected and operating expenses (taxes, insurance, energy, maintenance, management) over the past two or three years. These figures feed the calculation of net operating income, GRM and cap rate.

A rent roll that is clear and consistent with the leases is probably the most scrutinized document. The slightest gap between the rent stated on a lease and the one in the table forces the buyer to dig — and to doubt.

To turn these figures into a building value, our guide to multiplex yield calculation explains the GRM and cap-rate mechanics the buyer applies to your file.

Why provide the tax bills and energy invoices?

The municipal and school tax bills, along with the energy invoices (electricity, gas, oil), let the buyer reconstruct the real operating expenses of the plex. These are third-party-verifiable cost items that lend credibility to your entire financial picture.

The municipal and school tax bills are unavoidable: they are often the two largest fixed expenses of a plex on the North Shore, especially after recent property reassessments. The buyer compares them to the amount stated in your financials. Providing the assessment notices for the past few years removes any dispute on this item.

The energy invoices — electricity, natural gas, oil, depending on the heating system — clarify who pays for what. In a building where the owner covers heating for common areas or certain units, these invoices document an expense the buyer will have to assume. They also help flag an energy-hungry building, a common negotiating point.

The location certificate, renovation history and permits

The Chambre des notaires recommends an up-to-date location certificate less than 10 years old, provided by the seller. To this add the history of major work and the corresponding municipal permits, which prove the condition and compliance of the building.

The location certificate is the document that describes the current condition of the property: it contains the plan of the property and the surveyor's report. The Chambre des notaires du Québec recommends that an up-to-date certificate describing the current condition of the property and dating no more than ten years be provided to the buyer by the seller.

The history of major work — roof, windows, plumbing, electrical, heating, foundation — reassures the buyer about the real condition of your plex. Keep the invoices, warranties and reports. The corresponding municipal permits prove these renovations were done by the book; their absence raises a doubt about compliance and can drag the price down. The OACIQ, for its part, lists invoices, warranties, plans, estimates, permits and reports among the documents to be provided in support of the seller's declarations.

For the physical condition of the building, our guide to the pre-sale inspection of a plex rounds out this documentary side.

Source: Chambre des notaires du Québec — "Do I need a new location certificate?".

Insurance policies and title verification by the notary

The building's insurance policies document the actual coverage and premiums. On the title side, the Chambre des notaires explains that the notary ensures the seller is the true owner and guarantees a clear title — based notably on an authentic copy of the title and the location certificate.

The insurance policies in effect show the buyer the current coverage and the real level of premiums — an expense item that has risen sharply in recent years for income properties on the North Shore. Providing the policy and the claims history avoids unpleasant surprises at renewal and lends credibility to your financial statements.

Finally, title verification falls to the notary. The Chambre des notaires du Québec explains that, in carrying out these verifications, the notary ensures that the seller is the true owner of the property and guarantees you a clear title of ownership. The seller must provide an authentic copy of their title and the location certificate. By gathering these documents early, you let the notary begin their searches without waiting.

Source: Chambre des notaires du Québec — "What does a title search by a notary involve?".

How do you prepare a complete file to sell your plex faster?

Gather the eight blocks of documents before listing, organize them in a single file (digital, ideally), and hand them over as soon as the offer is accepted. A complete file shortens the due-diligence period, limits renegotiations and signals a well-managed property.

The logic is simple: every missing document is a reason for the buyer to extend their conditions or lower their price. Conversely, a seller who provides a complete file as soon as the offer is accepted moves financing, inspection and title verification forward in parallel — and closes the transaction faster. This is even truer in the North Shore plex market, where savvy buyers compare several buildings at once.

Note that this file of supporting documents should not be confused with the seller's declaration about the immovable, a separate OACIQ form in which you answer questions about the condition of the property. The due-diligence file gathers the documents that back up those declarations. For particular situations — succession, corporation, lease assignment, complex titles — consult a notary or tax specialist.

For the rest of the selling journey, see also our North Shore real estate market analysis, which places this documentary file within the broader process.

The purchase promise and the conditions period: where your file fits in

A purchase promise on a plex is almost always conditional on reviewing the leases, financial verifications, inspection and financing. Your document file feeds each of these conditions. The more complete it is once the offer is accepted, the faster the buyer removes conditions — and the more the due-diligence period works for you rather than against you.

To understand why a complete file speeds up the sale of an income property, you first have to see how the purchase promise is structured. When a buyer submits an offer on your plex, they include a series of conditions to satisfy within a set timeframe — often 10 to 30 days depending on the complexity of the building. Until those conditions are removed, the sale is not firm. The OACIQ specifies that the purchase promise is notably conditional on the buyer examining and verifying the leases in effect, renewal notices and other related documents. If the buyer does not obtain these documents within the set timeframe, or is dissatisfied with their examination, they can cancel the promise.

This is exactly where the prepared seller's advantage lies. Each condition is a potential exit for the buyer. Each missing document extends the timeframe, feeds doubt, and reopens the negotiation.

The typical conditions of a purchase promise on a plex

Here are the most common conditions on a multiplex and the document in your file that feeds each one:

One point deserves special attention for income properties: compliance with municipal by-laws. The OACIQ notes that, for a multi-unit building, compliance with municipal by-laws must be verified, because a potential municipal inspection could result in a loss of rental revenue — for example if a basement unit is not authorized. A seller who documents in advance the number of units recognized on the assessment roll and the permits obtained defuses this concern before it becomes grounds for renegotiation.

Source: OACIQ — Mandatory forms and statements (purchase promise, verifications).

The seller's declaration about the immovable: distinct from your document file

The seller's declaration about the immovable is an OACIQ form in which you answer, in good faith, questions about the condition of your plex. The due-diligence file, by contrast, gathers the supporting documents that back up those answers. The two are complementary: the declaration says what you know, the file proves it.

Many owners confuse two very different things: the seller's declaration form and the document file. Understanding the distinction avoids many misunderstandings when selling a plex.

What the seller's declaration is

The "Declarations by the seller of the immovable" form is an OACIQ document that has been mandatory since July 2012 when a seller who is a natural person lists, through a broker, a primarily residential immovable with fewer than five dwellings — which covers most North Shore duplexes, triplexes and fourplexes. For divided co-ownership, the "Declarations by the seller of the immovable – Divided co-ownership" (DSD) form applies. In it, the seller answers, to the best of their knowledge, a series of questions about the condition of the property: roof, foundation, water infiltration, presence of contaminants, disputes, and so on.

Crucial point: the OACIQ indicates that the seller must provide the broker with available documents supporting their answers — invoices, warranties, plans, estimates, permits, reports, notices and leases. In other words, your due-diligence file is precisely the body of proof that makes your declaration credible and protects you against a later latent-defect claim.

Declaration vs file: two complementary roles

If the seller refuses to complete and sign the form, the OACIQ specifies that the broker simply cannot conclude a brokerage contract with that person. Transparency is therefore not a matter of style: it is a condition of listing.

This approach also applies to a direct sale. Even without a broker or official form, a savvy buyer will ask you the same questions — and a ready file turns an interrogation into a simple validation.

Source: OACIQ — Mandatory form "Declarations by the seller of the immovable".

Building a flawless rent roll and financial statements (with a worked example)

The rent roll and the financial statements are the two documents the buyer scrutinizes most, because they directly drive the price. A clear rent roll, consistent with the leases, and financial statements that separate actual from potential income reassure the buyer and protect your price. Here is how to build them, step by step, with an example on a triplex.

A multiplex buyer is not paying for walls: they are paying for a net income stream. That is why the rent roll and the financial statements weigh more, in their evaluation, than the colour of the cabinets. Build them with rigour and you are already speaking their language.

Step 1 — Build the rent roll line by line

The rent roll is a summary table, one unit per line. Let's use a fictional North Shore triplex to illustrate what it should contain:

Total monthly rental income: $3,070, or $36,840 per year. Each amount in the table must match the signed lease exactly. The slightest discrepancy — $1,150 in the table but $1,125 on the lease — forces the buyer to re-verify everything and casts doubt on the rest of your file.

Step 2 — Distinguish actual income from potential income

In the example, the basement unit rents for $825 while the market would justify more. Two seller reflexes collide:

• Present the actual income ($36,840) — honest and verifiable, but it leaves value on the table.
• Highlight the potential income — noting separately that the basement rent is below market is a legitimate upside argument, provided you never blend it into the actual income.

The golden rule: never inflate the rent roll with theoretical rents. The buyer will cross-check your figures against the leases and tax bills. An inflated rent roll, once exposed, costs more in credibility than it earns in price.

Step 3 — Build consistent financial statements

The financial statements add the expenses to the picture. Taking the triplex again, with illustrative annual expenses:

This net operating income of $24,990 is the figure from which the buyer calculates the value of your plex. Applied to a cap rate of 5.5%, it gives an indicative value of about $454,000 ($24,990 ÷ 0.055). Change the cap rate to 5% and the value climbs to nearly $500,000; at 6%, it drops to $417,000. This shows why every dollar of documented — or undocumented — expense moves the value by thousands of dollars.

To turn this net income into a building value the way the buyer does, our guide to multiplex yield calculation details the GRM, NRM and cap-rate mechanics.

The common mistakes that derail the due diligence of a plex

Most plex sales that stumble in due diligence do not trip over a latent defect, but over documents that are missing, inconsistent or expired. Inflated rent roll, out-of-date location certificate, missing permits, understated expenses: these mistakes extend the timeframe, trigger renegotiations and erode trust. Knowing them is already avoiding them.

After dozens of transactions on North Shore income properties, the same pattern recurs: the same mistakes cost sellers time, price and sometimes the entire sale. Here are the most common ones and how to prevent them.

Mistake 1 — A rent roll that doesn't match the leases

This is the number-one mistake. A rent stated at $1,150 in the table but $1,125 on the lease, a unit presented as leased when it is vacant, a "planned" increase counted as acquired: every gap forces the buyer to re-verify and feeds doubt. Fix: align the rent roll with the leases, line by line, before listing.

Mistake 2 — An expired location certificate

The Chambre des notaires recommends a certificate less than ten years old. A seller who discovers, mid-transaction, that theirs is fifteen years old — or that they added a shed or parking not reflected on the plan — ends up ordering a new certificate in a rush. But the land surveyor needs several weeks. Fix: check the date of your certificate as soon as you consider selling.

Mistake 3 — Work done without permits

A basement finished as a unit without a permit, an undeclared extension, an unauthorized division into additional units: these situations raise a risk of lost rental revenue if the municipality intervenes, and the buyer knows it. Fix: gather the existing permits and, in their absence, clarify in advance the number of units recognized on the assessment roll.

Mistake 4 — Understating expenses

Presenting financial statements that "forget" management, the reserve for major work or vacancy produces a flattering net income… which the buyer will revise upward as soon as they run their own analysis. The result: an unrealistic asking price, then a downward renegotiation. Fix: normalize expenses with realistic line items.

Mistake 5 — Waiting for the offer to gather documents

Too many sellers start hunting for their leases, invoices and tax bills after receiving an offer. The conditions period ticks down while they dig through boxes. Fix: assemble the file before even listing.

Special cases: succession, corporation, lease assignment and sales taxes

Some situations add documents to the standard file: a sale by a succession requires the liquidator's papers, a sale by a corporation (holding) brings in corporate records, and lease assignments as well as sales taxes (GST/QST) raise particular questions. In these cases, the reflex is to prepare the extra documents early and consult a notary or tax specialist.

The eight-block file covers the "standard" sale of a plex by an individual owner. But several situations common on the North Shore add their own set of documents. Anticipating them avoids blocking the transaction at the last minute.

Selling a plex held by a succession

When the building is part of a succession, it is not the deceased but the liquidator who sells. The notary will need additional documents to confirm that the liquidator has the power to sell and that title can be transferred cleanly: will or declaration of heredity, proof of the liquidator's capacity, publication of the required documents in the register. Tax issues linked to the deemed disposition at death may also apply. Gather these documents from the start and entrust their validation to a notary.

Selling a plex held by a corporation

If your plex is held by a management company (holding), the transaction brings in corporate records: resolutions authorizing the sale, identification of directors and shareholders, up-to-date articles. The notary must ensure that the person signing validly binds the corporation. Note too that the taxation of a sale by a corporation differs from that of an individual — a tax specialist will clarify the impact at the corporate level and on your personal withdrawals.

Lease assignments and particular rental situations

Some leases contain assignment or sublet clauses, or verbal agreements that must be documented. A sublet unit, a special agreement on parking or appliances, a tenant in arrears: all of this must appear in black and white in the rent roll and the attached leases. The buyer of an income property inherits these situations; better to disclose them in advance than to let them surface during inspection.

GST/QST and the welcome tax

The question of sales taxes (GST/QST) on an income property is technical: depending on the type of building, the use and the status of the parties, the sale may be taxable or exempt, and self-assessment rules may apply to a registered buyer. Assume nothing: this is a classic case where a consultation with a tax specialist before signing avoids nasty surprises. For their part, the buyer will pay the transfer duties ("welcome tax") to the municipality after the sale — an item they factor into their total cost calculation.

In all of these situations, prudence calls for consulting a notary or tax specialist. This guide describes the documents to gather; it does not replace professional advice tailored to your building and your structure.

The notary's role and the closing, step by step

Once the conditions are removed, the notary takes over: they verify title, obtain the discharge of your mortgage, prepare the deed of sale, publish it in the land register, carry out the tax and rent adjustments, then remit your balance. A complete file provided early lets them begin this work without waiting.

Due diligence prepares the ground; the notary closes the transaction. Understanding their steps shows why each document in your file speeds up the closing of your plex sale.

Step 1 — Title verification

The notary consults the land register to confirm that you are the true owner and that title is clear. They spot any charge, servitude or un-cancelled entry that could harm the buyer. To do so, they need an authentic copy of your title and the location certificate — hence the importance of having them on hand.

Step 2 — The mortgage discharge

If your plex is charged with a loan, the notary obtains from your lender a document called a discharge (quittance/mainlevée), which proves the complete repayment of the debt and allows the mortgage to be cancelled in the land register. This is an unavoidable step: without a discharge, the buyer does not obtain clear title.

Step 3 — The deed of sale and its publication

The notary prepares the deed of sale, has the parties sign it, then publishes it in the land register. After publication, they verify that no other transaction has come to affect title in the meantime.

Step 4 — Adjustments and remittance of funds

The notary obtains the official tax statements from the municipality to ensure that municipal and school taxes are paid, then carries out the adjustments (prorations): taxes, rents, tenant deposits — everything is prorated between seller and buyer at the sale date. Only at the very end — once the balance of your loan is repaid and accounts settled — do they remit the balance owed to you.

Here the loop closes: the rent roll and tax bills you prepared for due diligence serve a second time, for the notary, to calculate the adjustments. A single well-built file serves the whole process.

Source: Chambre des notaires du Québec — "The notary's role in real estate law".

Due diligence via a broker or in a direct sale: what's the difference?

Whether you sell your plex through a broker or directly to a buyer like ImmoMulti, the buyer runs the same due diligence on the leases, the numbers and the condition of the building. What changes is the listing (public or confidential), the presence of a commission, and the speed of the process. The document file itself stays the same — and serves you in both cases.

Many owners believe due diligence depends on how they sell. In reality, the buyer requires the same documents in every case — because they assess the same risk and the same income stream. What varies is the context around that diligence.

Sale with a broker

The broker has you complete the seller's declaration, gathers your file, lists the multiplex publicly (Centris, showings, photos) and manages the purchase promises. You benefit from support and broad exposure, in exchange for a commission. Each prospective buyer's diligence follows the broker's verification form; conditions are removed as documents are obtained.

Direct sale to a buyer

By selling directly to an income-property buyer, you skip the public listing and the commission. The buyer analyzes your file themselves — leases, rent roll, financial statements, tax bills — and makes an offer. The process is more confidential (no sign, no curious visitors) and often faster, provided your file is ready.

To compare the methods of selling an income property as a whole, our North Shore real estate market analysis details each option.

Informational content only. Does not constitute legal or tax advice. Requirements and deadlines may change; consult a notary or tax specialist for advice specific to your property and situation.