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Lease Abstraction Services

For businesses that have a significant lease portfolio, lease abstraction is a vital tool. It helps summarize their leases and provides a snapshot of how they’re performing, so they can manage and use their leases as assets and business tools.

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  • iLeasePro Lease Management Solution

    But lease abstraction isn’t simple. It takes a variety of skills that can take years to acquire, not to mention years of experience. Which is why companies that need one or more lease abstract typically hire a lease abstraction service.

    What follows is a breakdown of what’s involved. We’ll go over the lease administration basics when it comes to lease abstracts and lease abstraction services, and we’ll also tell you who can use them and what benefits they provide.

    When we’re done you’ll see why you need to consider a lease abstraction service to get the most out of your lease agreements as both assets and business tools.

  • iLeasePro Minimizing Lease Errors and Risks

    What is a Lease Abstract?

    To understand what a lease abstraction service does, you have to know what a lease abstract is and why it is critical to successful lease administration.

    Lease abstracts condense and simplify the most important and frequently used information in a commercial lease agreements.

    They’re simple and easy to understand, but the information they contain is invaluable. It captures key concepts and puts the essential information up front where you need it most.

The Lease Abstraction Process

Lease abstraction is the process of summarizing key information from a detailed lease document into a simplified, easy-to-read summary. The purpose of lease abstraction is to enable stakeholders to quickly understand the critical terms, financial obligations, and important dates within a lease agreement without having to comb through the entire document. Here's a general breakdown of the lease abstraction process:

  1. Reviewing the Full Lease Document. The process begins with a comprehensive review of the entire lease agreement. It’s important to read each clause carefully to understand the financial information and obligations and rights of each party.
  2. Identifying Key Information. As the document is reviewed, the abstractor identifies and flags the essential clauses, terms, and conditions that govern the lease relationship.
  3. Extracting Essential Data. After identification, the relevant data is extracted. This involves summarizing complex legal language into plain terms while retaining the lease's intended meaning.
  4. Organizing the Data. The extracted data is then organized into a standardized format. This often involves categorizing information under various headings such as financials, legal, and operational details.
  5. Creating the Lease Abstract. The organized data collected is included in a lease abstract. This document will usually be a few pages long, depending on the complexity of the lease.
  6. Review and Verification. The abstract is then reviewed and verified for accuracy and completeness. It may be compared against the original lease to ensure no critical information has been missed or misrepresented.
  7. Updating and Maintenance. Lease abstraction is not a one-time task; abstracts need to be updated as amendments to the original lease occur, or as triggered by specific events detailed within the lease.

Lease agreement abstracting will include legal, financial, and, business relevant information like the names and contacts of the lessee and lessor, the specifics of the lease term including commencement, duration, extensions, and renewals, as well as financial terms like rent amount, rent increases or rent escalations, payment schedules, and any increment clauses form the core of the abstract. It also highlights the specifics of the premises, including its size, location, square footage, and permitted uses, along with who holds responsibility for maintenance and repairs.

Insurance requirements, compliance with laws and regulations, sublease conditions, and terms of termination are also summarized. Notably, the abstract pinpoints critical dates for renewals and compliance with certain lease obligations, as well as any rights the lessee has to renew, purchase, or expand. It doesn't overlook details on rent escalation and clearly outlines what constitutes a lease default, including the remedies available.Any special provisions unique to the lease, such as rights of first offer or exclusivity, are also captured.

The lease abstract isn't a static document; it's updated regularly to reflect any changes from amendments or specific events detailed within the lease. This dynamic document serves as a vital tool for stakeholders, enabling efficient management and informed decision-making regarding the company's leasehold interests.

By accurately abstracting these key attributes, stakeholders can gain a clear and concise understanding of the lease agreement without the need to navigate through complex and lengthy legal documents. The abstract provides a tool for better management and decision-making regarding a company's lease portfolio.

  • iLeasePro Minimizing Lease Errors and Risks

    Who Does Lease Abstraction and What Lease Skills Are Involved?

    While there are software products from companies like iLeasePro that simplify the abstraction process, the expertise provided by lease abstraction services is impressive and comprehensive.

    Here’s a summary list of what’s involved:

    • Financial analysis
    • Information analysis
    • Coding skills
    • Training in GAAP (Generally Accepted Accounting Principles)
    • Legal training to understand legal principles and the language used in legal documentation
    • Understanding and experience with commercial lease agreements
  • iLeasePro Lease Portfolio Management

    What Lease Abstraction Services Provide

    While least abstraction services tend to design their presentation to individual clients, here’s a general list of what they provide:

    • An initial analysis of all lease-related documents
    • Document updates that include current data that is in compliance with all relevant standards.
    • Report generation that meets the needs of the requesting company.
    • A quality assurance review of all lease abstracts.
    • Custom templates for gathering all data not contained in the lease agreements that many be necessary to perform the abstract.
    • A consistent format for information across the lease portfolio based on established best practices for lease accounting and administration
  • iLeasePro ASC 842 Transition Solution

    The Advantages Provided By a Lease Abstraction Service

    Now let’s talk more about the specific benefits of using a lease abstraction service. They’re extensive and comprehensive, so we’ll start with this partial list.

    1. Efficient utilization of resources. For some companies, allocating resources to perform lease abstraction is time consuming and takes valued employees away from other essential tasks. A lease abstraction service allows a third party with a fresh perspective to analyze your lease agreements, and you get an accurate, concise abstract that can be used right away to make better business decisions with your leasing portfolio.
    2. More accurate data. It’s easy to make mistakes if you’re not experienced when it comes to lease abstraction, and those mistakes can be very damaging, especially if they involve financial, technical or personal data. Lease abstraction services eliminate this possibility. Some of these companies use sophisticated software that implements AI and machine learning to make sure these kinds of errors don’t occur. Accurate data saves you from increased expenses down the line.
    3. Cost savings. While the outlay to use a lease abstraction service can be considerable, the cost actually balances out when you consider what these services provide. Here are some of the cost advantages to hiring such a service.
      • No training required for existing personnel or hire contractors to do lease abstraction for you.
      • Increased accuracy reduces costs. No more errors that lead to delays in payments or financial mistakes.
      • You get lease abstracts faster, which decreases operating costs.
    4. Quick turnaround time. Lease abstraction services tend to have experience with a variety of different types of lease agreements, so they can produce abstracts faster and more accurately and saves time. Lease abstraction software may be used eliminating manual processes are eliminated, so you get data and results in days, not weeks.
    5. Better property portfolio management. Managing lease agreements is a complex task for property management companies. Different lease agreements may have different terminology and conditions, which makes it more difficult to abstract them.
      Lease abstraction services have experience meeting the needs of all kinds of firms, from property management companies to construction companies doing a lot of equipment lease agreements. They’re familiar with the different types of lease agreements and the terminology involved, and as such they can abstract them faster and more easily.
    6. Security and data confidentiality. Lease agreements contain a variety of personal, financial and technical data that can be very damaging if it gets into the wrong hands.
      Airtight security is essential, and lease abstraction services actually offer confidentiality guarantees to prevent data leaks.
    7. Better compliance with existing accounting standards. Helps keep lease agreements in compliance with ASC 842, GAAP, FASB, IASB and so on. Mistakes are eliminated, and data collection and reports are generated according to established best practices that you set up to meet your needs.
  • iLeasePro Real Estate Equipment Lease Accounting

    iLeasePro Works as a Team to Service Your Lease Abstraction Service Client Needs

    At iLeasePro, we understand every aspect of lease abstraction. We’ve done it with thousands of different kinds of lease agreements, so we know how to produce concise, accurate abstracts that meet your needs.

    To find out more and set up a free consult, call us at 888-351-4606 or email us at

    We also have plenty of great information about lease abstracts and lease abstraction services on our website, which, and you can chat with a live representative there as well.

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