carmencs / January 26, 2024
Lease management, also known as lease administration, is about doing the day-to-day execution of tasks related to the company’s leases. It’s not done the same way for everyone. It includes making reports, handling documents, talking to different people, and doing many office tasks. Every contract has rules and things that must be done, and someone has to take responsibility.
Tasks for managing leases usually happen after the lease is agreed upon. To understand what’s done every day for leases, let’s see what happens with a lease. First, the final contract has to go through the procurement, legal, and finance departments for approvals and signatures. Once signed, the lease is stored somewhere, like on a server, intranet, or software.
Next is lease abstraction, where key details of the lease are put together in a way that’s easy to read, called a lease abstract. This includes details about assets, like serial numbers or addresses, and information on contacts, finances, and other things stakeholders might need. Besides the abstract, lease information is listed in a way that’s easy to report, usually in an Excel sheet or with software.
After that is onboarding, where the leased property is obtained, keys are exchanged, and it’s ready for use. If there are changes or special items needed, those are managed, as well. All these details need to be watched, managed, and shared by a professional lease manager like the professionals at CARMEN Corporate Services in Chicago.
After the lease starts and the first details are sorted out, there are ongoing items that will need your attention. If anything about the lease changes, like the person to contact, that info has to be updated. When it’s time for lease renewals or endings, the lease manager needs to tell the right departments so they can make a new deal or get ready for the lease to finish.
Besides those administrative tasks, each lease needs to be kept track of. Invoices need to be looked at and paid on time. Some leases for commercial real estate also have common area maintenance (CAM), an extra charge on top of the basic rent for taking care of shared spaces like lobbies and hallways. This includes maintenance for landscaping, elevators, and areas used by multiple tenants. The charges for rent, CAM, and taxes must match what the lease agreement says.
It happens more than you’d think – paying too much for rent and other charges. To avoid this, it’s important to regularly check all lease papers, bills, and relevant info to make sure the charges are right. These checks, called lease audits, usually focus on extra charges like CAM, but can look at any possible overpayments on leases.
Since lease managers have all the important lease info in one place, they help other departments by giving reports on leases. Finance, procurement, IT, real estate, and any other team dealing with leasing need these reports for important decisions like:
So, who’s in charge of lease management? Well, it varies. Lease duties can be spread across different departments, handled by office staff, or given to one person “the lease manager”.
Businesses dealing with multiple real estate leases, like stores or offices who have multiple locations, usually have a real estate manager handling all their leases. Companies with many equipment leases – think healthcare and manufacturing – might have a special equipment manager. Some companies just have one lease manager for all types of leases. This person could be under the accounting, operations, or legal departments.
Managing leases needs lots of teamwork, especially in big companies. Lease managers share info among teams that might not usually work together. Because they’re central to handling lease info, they must be good with details and communication, understanding all the little details of each lease and explaining them to people in the office and out in the field.
The future of lease management looks even more important as leases become more noticeable and companies want better ways to manage costs. Lease managers will be crucial in keeping data that guides future money decisions.
At CARMEN Corporate Services, we provide professional lease management services in Chicago or elsewhere. If you’re from Chicago and already looking for a trustworthy partner to grow your business – you’ve found the right team. Reach out to us now and we’ll be more than happy to assist you in your goals.