Modify a Contract

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Real Estate Manager provides lease administrators with the ability to manually trigger contract modifications, overriding automatic system rules when accounting policies or special circumstances require modification treatment. This enhancement addresses scenarios where finance and lease teams need to apply accounting judgment beyond standard system logic.

The feature gives users the flexibility to force contract modifications even for events that would normally not trigger them under standard system rules, such as end-of-term events including renewals, payment adjustments, and fixed-term renewals where accounting teams require modification treatment for policy compliance.

Contract modifications may be required in case of the following scenarios:

• Formal lease renegotiations requiring modification treatment.

• Scenarios where accounting policy mandates modification despite minimal changes.

• IBR override situations where system logic needs manual intervention.

• Payment term changes that require modification treatment per accounting standards.

Pre-requisites

The following are the pre-requisites to trigger contract modification:

• Deal must be set up in Real Estate Manager and synced with Lease Accounting Manager (LAM).

• User must have appropriate permissions to modify deals.

• Understanding of when accounting policy requires modification treatment.

Trigger Contract Modification

The following is the step-by-step procedure to modify an existing contract:

Access the Deal

1. Navigate to the deal that requires modification in Real Estate Manager.

2. Ensure the deal is already set up and synced with Lease Accounting Manager.

Select the Action to be Performed

1. Select the Action to be performed for the contract, for example, Lease Variation, from the list of options.

2. Click Perform Action. The Lease Variation pop-up appears.

   

Enable Trigger Contract Modification Option

1. Determine if the variation requires modification treatment based on:

   • Accounting policy requirements

   • IBR override scenarios

   • Special circumstances where only payment terms change

   • Formal renegotiations

2. Hover over the checkbox to view the comprehensive tooltip explanation on when and why to use this feature: "Check this box to force a contract modification, regardless of system rules. Use when accounting policy requires a modification—for example, in formal renegotiations or renewals where only payment terms change, or when the accounting team needs to override the IBR applied by the system."

3. Check the Trigger Contract Modification checkbox on the Lease Variation screen. This enables the user to manually force a contract modification regardless of whether the system's automatic rules would typically trigger one.

4. When the checkbox is selected, the system treats the variation as a contract modification and follows the complete modification workflow, even if the changes would not normally qualify for modification treatment under standard rules.

Proceed with Lease Variation

1. Click on Lease Variation to continue with your intended action.

2. Modify the required details (For example, payment adjustment, fixed amount review and renewal terms).

3. Complete the modification, add Comments and click Save to save the changes to the deal.

4. Sync the changes in Real Estate Manager to LAM.

System Processing

1. The system will treat the variation as a contract modification.

2. Complete modification workflow will be followed regardless of standard system rules.

3. Processing will occur according to the organization's established workflow.

Validation and Controls

Edge Case Protection: The system includes validation to prevent inappropriate use, specifically blocking lease variations where the Trigger Contract Modification checkbox is selected alongside:

• Non-Reasonably Certain renewal options

• Exercised Month-to-Month options