Abstraction Best Practices

To maximize efficiency and consistency, follow these best practices when entering and organizing lease data in Leasecake.

November 21, 2024

1. Creating a New Location

When setting up a new location, ensure you complete the following required fields to establish a solid foundation for abstraction:

• Location Name: Use a clear and consistent naming convention for easy identification.
• Acquisition Type: Specify if the location is a Lease or Purchase.
• Company Name: Enter the exact legal entity name as it appears in the lease document.
• Size: If the square footage is unknown, default to “1.”
• Location Address: Provide the full, accurate address for the location.

These fields provide critical context for managing lease details effectively.

2. Uploading Documents to Abstraction

Proper organization of lease-related documents is essential for clarity and retrieval. Follow these steps:

• Organize in Chronological Order: Begin with the Base Lease, followed by amendments and other documents in the order they were executed.
• Identify Document Types: Tag each document with its correct type (e.g., Base Lease, Amendment, Estoppel, Sublease, etc.).
• Add Descriptions: Include key details, such as:
  • Amendment numbers.
  • Extended lease term dates.
  • Assignee names.
  • Whether additional documents are attached.

Accurate tagging and descriptions ensure the documents are easy to find and interpret during abstraction and lease management.

3. Required Fields for Abstraction

Location Details

• Location: Indicate if it is an Existing or New Location.
• Location Name: Use a consistent naming system.
• Location Type: Specify the property category (Healthcare, Industrial, Land, Office, Other, Retail).
• Location Size: Default to “1” if the actual size is unknown.
• Size Unit: Choose the appropriate unit (Square Feet, Square Meters, Acres, Hectares).
• Company Entity Name: Enter the exact legal name of the tenant company.

Lease Parties

• Role of Company: Identify whether your company is Lessee, Sublessee, Lessor, or Sublessor.
• Counterparty Name: Provide the full legal name of the landlord or other party.

Lease Details

• Leased Space: Enter “1” if the exact space is not specified.
• Lease Space Unit of Measure: Select the appropriate unit.
• Security Deposit: If there is no deposit, enter “0.”

Critical Clauses

• Existing Clause Type: Specify if it is an Existing Type or a New Type.
• Clause Type: Choose the relevant category (e.g., CAP on CAM, Common Area Maintenance Charges, Exclusive, HVAC, Maintenance – Landlord, Maintenance – Tenant, Real Estate Taxes, Renewal Options, Security Deposit, TI Allowance, Use Clause, etc.).
• Page #: Reference the exact page where the clause appears. We enter the PDF page number not the number found on the Lease Document.
• Language: Copy and paste the clause details directly from the lease.

4. Other Items to Focus On (Not Required, but Critical)

Key Dates

• Lease Commencement Date: Carefully review the lease to determine this date accurately.
• Rent Commencement Date: Note if rents start mid-month or on a specific day.
• Lease Expiration Date: Confirm if the expiration date is the last day of the month or another specified date.

Add Renewal Options

• Add each renewal option as a separate entry. For example:
  • If there are two 60-month options, enter them individually as two 5-year renewal options.
• Include the Renewal Notice Period:
  • Start Date: The earliest date the renewal notice can be given.
  • End Date: The latest allowable date for providing notice.

Proration Method

• Carefully interpret lease language to determine the proration method:
  • Manual Proration
  • Actual Days in Month
  • 30-Day Month
  • 365-Day Year

Expense Reconciliation

• For Common Area Maintenance (CAM) caps, enable the Expense Reconciliation toggle.
• Enter the CAM Type (Fixed or Non-Fixed) and the CAM Cap percentage.

Lease Notes

Found at the bottom of the Leases tab, Lease Notes provide a dedicated space for storing additional information not directly covered in the abstraction or lease document. Examples of valuable entries include:

• Notes on unconfirmed dates or rent adjustments.
• Details regarding terminations or related conditions.
• References to specific sections of the lease where renewal options can be found, especially if only dates and dollars were abstracted.

Using Lease Notes helps maintain clarity and ensures critical information is easily accessible for reference.

5. Abstracting Amendments to Existing Leases

When abstracting amendments, follow these steps to ensure consistency:

• Verify Key Details:

  • Ensure the lease date in the amendment preamble matches the base lease.
  • Confirm the premises address matches the original lease.
  • Check if the landlord entity has changed.

• Update Critical Clause Language:

  • Add new clause language at the beginning of the Language field.
  • Reference the associated document, page number, and section.

• Renewal Option Notes:

  • If a renewal option is exercised, note how many remain. For example:
    • " Three (3) Options Remaining" if the lease initially included four options and one has been used.

6. Using Cakebot for Enhanced Accuracy

Leverage Cakebot, Leasecake's AI-powered assistant, to streamline and enhance your abstraction process.

Using the Chatbot

You can chat to Cakebot to ask simple questions about your lease and get fast answers. Cakebot will read your lease document and serve you an answer based on the relevant information it finds. For example, you can ask Cakebot:

• Who is responsible for fixing a broken HVAC unit in this lease?
• What are the tenant responsibilities outlined in this lease?
• What page will I find my Lease Renewal information?
• Are there any exclusivity clauses found in this lease?
• What penalties will I have if I pay my rent late?

If you did not get the answer you were looking for, try asking Cakebot again and be as detailed in the question as you can be. The more context you can give Cakebot, the better your answers will be. Integrating Cakebot into your workflow saves time and reduces the risk of human error, making your lease abstraction process more efficient.