Lease abstraction is an important task for effective lease administration, especially when one manages multiple commercial leases. By creating an abstract of the lease, you can quickly reference information when required rather than reading the entire lease each time something comes up. The abstract allows you to quickly reference information, and easily find full details within the lease if necessary.
It is best to come up with a format you will follow for all of your leases, and use it religiously. Make sure you include all the information you may need for your purpose, and follow the tips below for an effective lease abstract that will serve you well for some time.
1. Be certain that you abstract the important “dates and dollars” of the lease.
This includes the commencement of the lease, expiration or renewal date, option dates, and other important dates and figures. You should also reference the square footage and the amount of money to be exchanged for the lease.
2. Keep your abstract to one to three pages.
Any longer than that and it defeats the purpose of having an abstract. Double space, at least between references, to make the information easily scanned by the eye.
3. Before abstracting the lease, make sure that the lease and file are in order.
You should also consider your purpose behind lease abstraction, and keep that purpose in mind as you plan what will be included in the abstract. Read through the entire lease and take notes of what you may want to reference. This will help you decide what to include in the abstract.
4. Reference the page and section number of the lease in which the full information can be found for any given abstracted item.
This will allow you to quickly look up the full details for any situation that requires them. You should include such a reference for every point that you make in the abstract.
5. Effective lease administration requires a large amount of organization.
As you abstract the leases, assign each a number you can easily reference. This will make tracking leases much simpler.