How Lease Administration Can Help You Make the Right Decisions (And Save Money)
Consistent lease administration can help you stay on top of your lease portfolio and make the right business decisions. This is especially true at the time of renewals. Lease administration helps you stay up-to-date in terms of key lease terms and dates. If you don’t have a consistent lease administration process in place, you may be caught off guard as your lease becomes due for renewal and you will have no choice but to renew your lease on the Landlord’s terms and conditions, in the interest of time.
On the other hand, if you have a solid lease administration process, you will be alerted to critical dates and clauses consistently and that will give you ample time to weigh your options and make the right business decisions. For example, you can plan a few months or even years ahead of lease expiration and enter into negotiations or amendments with your landlord. Being aware of your lease expiration dates well in advance also allows you to scope the real estate market for better options. Apart from helping you make the right renewal decisions, consistent lease administration also helps you stay on top of things when it comes to expansions. It draws your attention to the various rights you have in the event property in your premises becomes vacant. For example, the right of first refusal or the right of the first offer, etc.
Lease administration also helps you avoid penalties and other charges by keeping tabs on upcoming rental obligations. Similarly, it also ensures any other invoices raised by the landlord are accurate and paid off on time. From the CAM and operating expense perspective, a lease administration process that involves reconciliation of account payables and receivables and auditing, thus ensuring you are not being overcharged. When you have a lease portfolio that runs into hundreds of leases or more, these figures can translate into significant cost savings.