This article was originally published on June 14, 2017 in the Property Management Insider.
In commercial property management, most of the heavy slogging that goes on in your back office involves onboarding, updating, amending and tracking leases. That means there’s a huge opportunity in moving from the mostly manual lease administration you’re probably doing now to an automated solution that streamlines the work of your back office people while reducing errors. With an automated solution, you’ll be able to handle more leases, in less time, with fewer people – liberating your staff for other duties and keeping a lid on your headcount.
The efficiencies of an automated solution manifest themselves in three major areas:
- Onboarding new properties and leases
- Adding leases to an existing property
- Processing and tracking changes to leases
Let’s have a look at some of these efficiencies.
Onboarding new properties and leases
Much of the work related to setting up the leases for new properties is redundant. Often you use similar types of leases, and the language, structure and amendments are largely the same.
Templates integrated with your lease administration software can enable onboarding new properties and tenants in bulk. While you might expect this to be a standard capability for lease administration software, it’s sadly lacking in most solutions. You’re likely to have to hire consultants to help, or to resort to manual data entry. Built-in data import template features that can be used by your internal staff will reduce your costs and drive workforce efficiency.
Adding leases to an existing property
Your lease administration solution should enable the quick and easy entry of a new lease for an existing property using configured lease boilerplates based on your lease types. New lease setup, including the collection of abstract data, is thereby standardized. There’s no reason to reinvent the wheel every time you add a new lease. This also ensures that data governance and standards are maintained during lease entry.
Processing and tracking changes to leases
Renewals, extensions, expansions, terminations, modifications and other amendments are common in the lifecycle of leases. So why not make them easier to process?
You should be able to carry over from the original lease all its information and then apply information relevant to the amendment, without manual data entry. But even more importantly, your software should track the history of contractual changes through the entire lifecycle of the lease. It’s surprising, but there are modern (even popular) lease administration solutions that give you no clue how a particular lease has evolved over time since the original execution date. What’s been taken out, what’s been put in, and when? There’s no complete view of the entire lease contract lifecycle.
Though it’s certainly not the most colorful part of commercial property management, setting up and administering leases properly is the backbone of managing the revenue. At heart, the business is about a manager and a tenant, with the lease as the embodiment of their relationship. If your people aren’t empowered with the right software to administer these leases, you’re wasting more of their time than you’d like to know –in addition to greatly increasing opportunities for errors that can directly impact revenue and the value of an asset.