Florida Real Estate Audit Checklist

Real estate audits are an integral component of running any brokerage firm, serving to ensure you comply with local and state rules and regulations.

Use an online transaction management system to keep track of all of your records and transactions accurately, while staying audit-ready. Managing compliance breaches effectively using an ATS is also key.

1. Review financials

Real estate audits involve reviewing various documents, from brokerage records and property financials, to all incoming and outgoing cash flows as well as verifying proper processes are in place.

At affordable properties, the auditor will review tenant files to evaluate if the application process is fair and equitable for both current and prospective residents, while also investigating eligibility requirements of the property.

Preparing for an audit early is essential. Implementing best-in-class recording, compliance, and record keeping practices will enable you to avoid penalties during an actual audit - something transaction management systems with features like document tracking can assist with.

2. Review contracts

Audits of brokerages and commercial real estate firms are designed to verify compliance with local real estate regulations. An essential step for any such firm.

An auditor from the Department of Real Estate will contact your office to arrange an audit, providing details regarding exactly which documents they require and when. These could include financial statements, transaction documents, property listings and listings details as well as trust accounts details, property management agreements or funds and more.

Your broker should conduct a physical walk-through of the property to check for any latent defects and examine for any encroachments onto neighboring properties - these steps are all part of an audit for Florida commercial real estate properties.

3. Review leases

Property inspections are an integral component of due diligence, yet often overlooked is the necessity of lease audits for real estate investments. Lease agreements dictate how much income an investment generates over its lifespan.

Contingencies & Payments - When reviewing the contingencies listed in your lease, ensure they are documented properly and verify how procedures for submitting financial statements or contingent payments work.

Tenant Ledgers - When reviewing tenant ledgers to assess how well your management team is overseeing properties, verify the number of tenants that meet occupancy rules in each unit as well as whether each tenant has made their payments on time and up-to-date with rental payments. Likewise, ensure your property manager has put into place adequate accounting controls and procedures.

4. Review marketing materials

An audit is designed to ensure your brokerage meets state and national regulations, by reviewing records and transaction management processes to assess compliance. Performing an audit can take months; make sure all pertinent documents are in order beforehand so as to avoid surprises during an audit.

An effective transaction management system will alert you of upcoming deadlines and track who has reviewed specific documents, making your audit more manageable while decreasing penalties.

Commercial real estate due diligence requires gathering an abundance of documentation, such as zoning regulations, environmental reports, financials and surveyor notes. Utilizing a Florida real estate audit checklist will assist in understanding all steps involved and mitigating potential issues.

5. Review legal documents

Legal due diligence for real estate involves reviewing numerous documents. This may include title insurance policies, zoning regulations, surveys and tax certificates as well as seller financial records and operating statements. Furthermore, it is crucial that any pending litigation or regulatory issues be reviewed thoroughly.

Conduct a comprehensive physical inspection of the property. This should include visiting at different times of day and speaking to locals; identify any potential hazards like flooding, hurricanes or pests and check for any encroachments on other properties.

Make sure that all transactions and brokerage activity comply with state and national real estate regulations, with an integrated transaction management system providing essential support in order to prevent compliance breaches while creating audit-ready records.