Understanding Lease Abstraction Process
The term lease abstraction refers to process of preparing a summary of the key financial, business and legal information that exists in a commercial real estate lease document. Complete Legal Outsourcing supports a team who are experts in the field of lease abstraction and are known for hundred percent accuracy and timely delivery. Let us now help you in understanding lease abstraction process.
What is a lease abstract?
When a single property or an complete portfolio is being leased, it becomes very important to keep track of important details like commencement dates, landlord and tenant obligations, contract, payments and other logistical details. Keeping track of all this information manually can result in a nightmare as one needs to flip through hundreds of pages to look for relevant information. The lease abstraction process steps in here as it provides the user with a summary of all the crucial information of a particular lease along with the appropriate section or clause so that the reader is aware where to look at if detailed information is required. The abstract contains all information relating to terms and conditions, commencement and termination dates, rent projections, renewals, security deposits, maintenance terms and other crucial data.
Why Lease Abstraction is important?
Understanding lease abstraction process is crucial so as to make full use of the prepared abstract and for saving time. Lease abstraction is important as it is a summary of all the crucial information that a lease contains. A fully executed lease saves time as it saves the burden of flipping through pages that mostly contain routine information as it contains full details regarding the important information like dates, renewals, termination, relocation, landlord tenant obligations, insurance provisions, etc. Understanding lease abstraction process is crucial so as to make full use of the abstract and for saving time.
What are the essential components of a well drafted lease abstract?
A well drafted lease abstract defines the key terms one needs to know before executing the lease thus saving both time and money. The abstract also contains information about property repairs, common areas maintenance, improvements, etc. The abstract allows one to quickly discover key terms thus allowing effective management of the properties. From the lessees preview, the lease abstracts enables them to glance at landlord’s expectations and demands. A lease abstract also helps in answering questions that might affect the business like termination dates and rent increases, and provide the reader a basic outline of the provisions contained in the lease.
How lease abstraction proves beneficial?
As lease abstract condenses precise and crucial data from an extensive lease document and makes it accessible for users to review, monitor and update easily, it saves valuable man-hours as the abstract turns the lengthy lease document into a brief summary and tells the reviewer where exactly to look for certain specific information. Leasing agents generally get commercial leases abstracted for maintenance or property management and to locate repeatedly referenced terms of the lease without going through the whole lease document. A well drafted lease abstract documents all the financial terms of the lease thus making it beneficial for landlords and investors. Reviewing a lease abstract saves time for people executing due diligence on the property for a potential acquisition or sale.
How is lease abstraction done?
A well-drafted lease abstract is one which is short and gives out precise information. The well-drafted abstract helps in navigating the lease document. The information of lease abstracts differs based on the contents of the lease. Some of the important terms that a lease abstracts contains are the names of the tenant and landlord, duration of the lease, total area leased, base rent, escalations, renewals, landlord and tenant obligations and insurance provisions. Commercial leases usually contain customary clauses, like assignment, alterations, repair provisions, payment of operating expense and taxes and estoppel. Each clause contains specific information that is extracted to give formation to the brief contents of the abstract. An experienced lease abstractor has a good understanding of Lease Abstraction Process and knows what all information is important and needs to be extracted so as to serve the purpose of abstraction.
How can outsourcing lease abstraction help?
Understanding lease abstraction process is a crucial task and many offshore vendors have come up that undertake lease abstraction jobs, who have the skills to tackle the job efficiently thus saving the time and burden of reading hundreds of pages in order to extract the relevant information. Outsourcing lease abstraction jobs saves time and money as the offshore vendors undertake such tasks at a comparatively low cost and within a stipulated time frame. These vendors supports well trained team who are experts in the field and keep them updated through online training.