Whether it is lease accounting, property management, CAM reconciliation, or other lease services, they all require one thing in common—easy access to accurate lease data in a user-friendly format. The convenience of having a lease abstract saves time, mostly because it eliminates the tedious job of going through a huge volume of lease documents.
Lease abstraction requires abstractors to gather crucial data from voluminous lease contract that demands acute attention. Even experienced in-house lease abstractors can make errors that lead to misinterpretation of clauses, dates, or obligations. A simple neglected obligation could cause severe implications and monetary damages to the real estate firm or the tenants.
Due to the critical nature of lease abstraction, many companies outsource the service to lease abstraction vendors. But not all abstraction providers are equally qualified. The right vendor for your business model can dramatically increase the benefits of outsourcing lease abstraction.
Here’s a quick reference guide to consider when selecting an outsourcing partner for lease abstraction.
Working with clients from your industry and their experience
There are many lease firms who have experience to fulfill the standard criteria of lease abstraction. However, the most important factor to consider while choosing the firm is their experience working with both tenants and landlords. Since lease documents are complex, having worked with both parties gives a unique perspective for the vendor to understand the lease nuances.
Another key factor to consider is their experience in working with leases of your industry. It is important to remember that every lease is unique and every industry has its own peculiarities. The lease agreement of residential property differs from the commercial property, where there are industry-specific clauses, CAM charges, percentage rent, lease liabilities, lease audit right, etc. Understanding the nuances and the vocabulary of the industry are the key to accuracy and risk reduction.
No matter the size of the vendor, you must ask for references. Former clients will provide real-time experience and insights to help you make a suitable decision more than a company’s demo and testimonials.
Transparent communication
Transparency and timely communication account for a successful outsourcing partnership. While searching for an outsourcing agency, look for vendors that encourage transparency and continued communication throughout the abstraction process. The lease abstraction vendor should provide you with routine reporting and stick to the given timeline. Clear and timely communication ensures smooth workflow and gives confidence and trust for a profitable collaboration.
Expertise
It is crucial for real estate companies to maintain 100% accuracy in their lease abstracts, and your lease abstraction vendor should deliver on that promise. Your lease abstract template forms the backbone of the abstraction project. An experienced lease abstraction vendor must be able to suggest or design the optimal abstraction template for your business model. In addition, your lease abstraction vendor should have the expertise to identify and fix any issue with existing abstract templates.
Your lease abstraction partner brings the necessary domain knowledge and expertise in handling lease contracts. Working with such a partner gives access to top-quality services, cutting-edge technology, and industry best practices.
Flexible contract
It is essential for real estate firms to partner with vendors that offer contractual flexibility to implement services as per business requirements. Certain lease abstraction vendors have a specific lock-in period that limits the ability to modify the lease abstraction process. On the other hand, flexible contracts allow you to scale up or down based on your business needs, providing you room for new investments.
Summary
Accurate lease abstracts are a must to maintain a successful lease portfolio management, and the right vendor will help you streamline operations and provide the frame of reference to make strategic decisions. An experienced lease abstraction vendor ensures a proper setup of the abstraction process at the initial stages and adds value to lease portfolio management services by reviewing the existing abstraction template and offers timely guidance to optimize it.
PreludeSys have been working with various real estate companies to help simplify and customize their complex lease documents into a much more readable format. This greatly improves the operational efficiency of lease portfolio management.
If you are you looking for a reliable lease abstraction service, connect with us for a quick demo.
FAQ
What is lease abstraction?
Lease abstraction is the process of capturing critical information from lease agreements.
What are the benefits of outsourcing lease abstraction services?
- Expert lease abstraction
- Scalability
- Time saving
- Access to advanced technology
- Data security
