If you are still analyzing your contracts without lease abstraction software, you are giving yourself unnecessary work. Before formulating the lease abstract, this software considers key factors like tenant agreements, lease details, and sales portfolio. As a result, you get a highly accurate report and includes all the provisions of the original documents. Using this data-review technology, you'll be saving an immense amount of time and labor.
Integrating a lease abstraction software into your property can be a hassle for beginners with such technology in place. In such cases, teaming up with a reliable tech consulting firm can help you get better results. Collaborations with companies like these can also grant you access to crucial technology like MRI and Leverton.
Top Features of Lease Abstraction Software
There are an AI-based software and capable of self-learning. These inbuilt algorithms allow it to integrate itself into existing workflows and read the data from the inside out.
OCR
There are aspects of the system that require a little manual work. For example, software with built-in optical character recognition (OCR) can translate physical data. Crucial information like paper reports and statistics enters the system via scanning. But since Excel spreadsheets are the norm among the workflow, the software also converts these files into readable scripts. Since it is an API-compatible system, a lease abstraction software makes its audit easy to access for all internal parties.
AI
As system using advanced Artificial Intelligence (AI) programming, it goes through a 'training' or 'self-educating' phase. During such a period, features like machine learning (ML) and natural learning processing (NLP) help it learn about the existing workflow. Such technology allows the software to customize itself to the particular user by detecting writing style, grammatical errors, and more. Aside from the technological support here are other ways a lease abstraction software can help your business.
1. Improvement in Tenant Landlord Relationships
Lease agreements are the backbone of every tenant-landlord relationship. The clauses included in the contract govern how both parties function around each other. Adhering to the outlined rules can help avoid disputes.
Cause of Dispute
However, since the traditional lease abstraction system is labor-intensive, there are bound to be errors. Contracts are usually long, elusive, and written in legal jargon. They are easy to misinterpret for both tenants and landlords. Such misinformed contentions usually arise regarding the common area maintenance clause in the lease.
CAM Reconciliation
Therefore, clarifying CAM expenses is one crucial step that a lease abstraction software takes in improving tenant-landlord relationships. The subject of common area management fees is usually the top subject of contention between the two. Such a misunderstanding is no particular party's fault. The system itself is opaque and vague, and prone to tampering. The landlord can send an invoice to the tenant if they feel that their expenses exceed the amount they pay with the lease. Since there is no fixed template to measure such fees against, the latter can feel cheated.
Effective Solution
A lease abstraction software can help solve this problem by providing both tenant and landlord with a clearer view of the contract. An AI-produced abstract is precise and helps both parties get a more accurate understanding of the lease. As they understand the terms and conditions better, they realize the individual responsibilities.
No tenant or landlord can assure a software of being biased. Every scrap of information, from the contract footnotes to market indexes, goes into the formulation of the report.
The objectivity of the final distilled abstract is always guaranteed. Neither party can accuse the other of including or leaving out essential information. Such transparency in lease negotiations dramatically helps to improve client-landlord relationships.
Hiring Consulting Firms
In such cases, hiring an expert real estate consultation firm can even help avoid possible legal disputes. You may employ them primarily to make use of lease abstraction. But once you onboard with them, you get access to their expert CAM reconciliation services. All reliable consulting companies in real estate have experience navigating tricky tenant-landlord dynamics. Collaborating with them can rest your tenant disputes once in for all.
2. Increased Efficiency
An increase in workplace efficiency is the most evident advantage of a lease abstraction system. You cannot over-emphasize the efficacy of AI in such a workforce.
Lease statements are usually tediously constructed and are often vaguely worded. It is not uncommon for agreements to be exhaustively long, especially for a commercial property. Lease abstraction requires you to take out those clauses that you believe are important.
Problems with Manual Workforce
In addition to this, the content often varies in grammar and format. The same clause may appear in a different form, simply in the garb of a different jargon. On the other hand, some documents may be in Word or PDF format, while others may be on paper. This lack of efficiency poses a massive problem for a market expected to grow to $4263.7 billion by 2025. Navigating such a huge workload is sure to affect your concentration adversely. In such conditions, mistakes can also be a norm.
Fortunately, the AI in lease abstraction software can efficiently analyze and organize this diverse data. This technology crunches all this time-consuming information and distills them into clear, specific points. Features like OCR and NLP help break down condensed terms into more comprehensible forms. These provisions contain the essence of the original documents and highlight crucial issues that require elaboration.
Accurate Data
With a manual workforce, you constantly refer between documents to get the message across. The final assessment can often leave out critical information. This item may be an obscure but essential clause in the lease or a new market rule. Its exclusion may drastically change the overall tone of your lease abstract. Additionally, your tenant may be aware of this single bit of information and may see its exclusion as an attempt to cheat them.
A lease abstraction software solves this problem by implementing every bit of data into every line on the document. The final product of an AI-powered system is thus always up-to-date and relevant. It is for these reasons that your company could benefit from implementing a lease abstraction software.