Lease abstracts are the backbone of your lease portfolio management process as they capture the essence of leases that otherwise run into hundreds of pages. By summarizing the key financial and non-financial data contained in the leases, lease abstracts make it easy for lease administration teams to stay on top of the lease portfolio. It ensures that lease administrators and lease portfolio managers don’t miss out on critical dates and payments, no legal obligations are violated and no opportunities provided in the lease is missed. However, a lease abstract will be able to serve these purposes only if it is accurate. Relying on a lease abstract that’s ridden with errors or is outdated will do more harm than good. This is where lease audits come into the picture. Lease audit is the process of verifying the accuracy of your lease abstracts and ensuring the abstracts are complete and up-to-date. Here are some reasons to commission a lease audit.
Your leases have been updated
If your leases have been amended, renewed or have had addendums included, it’s time to make sure your existing lease abstracts capture any relevant information from those. At this time, it makes sense to commission a lease audit and review the entire lease abstract in the light of the changes/modification to the original leases and make the necessary updates.
You are migrating from one lease administration system to another
If you are moving your leases and lease abstracts from one lease administration software to another, or even if you are making the big switch from spreadsheets to a more robust lease administration platform, it is a good time to do a lease audit on all your lease abstracts. As you invest in quality lease administration software with a view to streamline your lease management process, you don’t want to start off with outdated or inaccurate data. A lease audit ensures the information you move to your new lease administration system is accurate and useful.
You are are unsure of the quality of the lease abstracts in the first place
Lease audits can be used as a diagnostic and remedial tool if you are not satisfied with the quality of your lease abstracts. If you notice that your lease administrators are consistently having a tough time staying on top of critical dates, payments, notices, etc, and are scrambling for data in the last minute, there could be more to the problem than what meets the eye. If such misses are frequent, it could be indicating a problem at the very core of your lease database–the lease abstracts. Either your lease abstracts are inaccurate, meaning they don’t have the right information, or they may be incomplete in the sense that they may have not captured lease data that is critical to effective administration of the leases in your portfolio. A lease audit will help you figure out the root cause of the problem and fix it once and for all.
Rebolease.com, powered by RE BackOffice, Inc., is a premier provider of lease abstraction, administration, audit and accounting services. Headquartered in Pittsburgh, PA, we are a global boutique firm, providing high-quality services to top-tier clients across industry verticals, covering every type of lease and on any lease platform. We are proud to be a trusted partner, for 15+ years, to leading retailers, REITs, property owners/managers, and corporate accounts seeking a strategic advantage. All client projects are performed in-house.
