An important aspect to consider when it comes to lease abstraction is lease data management. This has 3 key elements. So what are they?
Data type and formatting
First is the data type and formatting. Your lease abstract templates should allow for effective data searching and meaningful reporting. The data in your lease abstracts is useful only when it can be converted into meaningful pieces of information (knowledge) that you can leverage to arrive at the right business decisions. The right lease abstract acts as a powerful lease reporting tool allowing you to engage in data-driven decision-making in a proactive manner. Data cross-linking, reference and document tagging are elements that can help you accomplish this goal effectively.
Document management
Second is effective document management, which plays a crucial role in helping you stay on top of your lease portfolio. Once your team is ready to actually get started with the lease abstraction project, the first step is document organization. This involves a systematic arrangement of all lease documents including amendments, side letters, estoppels and even relevant email communications where applicable.
Document audit
The next step in this process is to identify the missing documents and data points that are missing as a result of that. Once the document audit is complete, the next step is to scan and upload the relevant documents onto your lease management system. At this stage, it is recommended that you perform a quality check to ensure the documents are legible and if you have used an OCR (optical character recognition) software to digitize them, then the output is accurate. Also, ensure the documents have the right tags and filters. Having the right tags and filters help by improving document accessibility, so you can find what you are looking for, right when you need it.
Overall, you can leverage your lease abstract to its maximum potential by integrating with a lease management software platform. While your lease abstract will mention the key events/dates/numbers to watch out for, the lease management application offers timely access to those critical data points and also ensures you never lose sight of them by tracking these for your consistently and alerting you on time, so you don’t miss any critical timelines.
