Lease Variation Actions and Statuses

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When managing leases in Real Estate Manager and Lease Accounting Manager (LAM), users encounter different actions and statuses that indicate the stage of a process and what needs to be done next.

Actions represent the types of changes or updates that can be made to a lease contract after initial setup. Each action triggers a specific workflow and has distinct accounting implications.

Statuses track the progress of these actions through the approval and synchronization process between Real Estate Manager and LAM. Understanding these statuses enables users to identify bottlenecks, take appropriate next steps, and ensure timely processing of lease changes.

This reference guide provides detailed explanations of all available actions and statuses to help users navigate the lease management workflow effectively.

Actions in Real Estate Manager

The system provides several actions that allow users to update or manage lease information after the initial contract setup. Each action serves a specific purpose.

Available Actions

• Vary Lease

  • Used when modifying an existing lease contract.

  • Includes changes to rent amounts, adjustments to the lease term, or other contractual updates.

  • Primary action for handling mid-term changes that affect accounting.

• Exercise Option

  • Confirms a renewal option, whether a fixed-term extension or a month-to-month arrangement.

  • Should only be taken when the renewal has been agreed upon with the landlord.

• Action Review

  • Designed for updating payment-related details, such as rent reviews or adjustments based on market conditions or CPI (Consumer Price Index).

  • Selecting the correct review type is critical to ensure accurate accounting results.

• Update Participants

  • Allows changes to participant details such as the landlord, lessee, or business unit associated with the contract.

  • Verify these details before synchronization to avoid errors.

• Update Asset

  • Updates asset-related information linked to the contract, such as the asset address or cost center.

  • Keeping asset details accurate is essential for reporting and depreciation calculations.

• Record Termination

  • Records an early termination of a lease.

  • Before approving this action, confirm that the termination terms are correct and agreed upon.

• Rollback Termination

  • Reverses a previously recorded termination.

  • Should only be used if the termination was entered by mistake.

• Update RC (Reasonable Certainty)

  • Changes the certainty status of renewal options.

  • Impacts accounting treatment; consult with the accounting team before making updates.

• Rollback

  • Archives or deactivates a contract.

  • Ensure that the contract is truly defunct before performing this action.

• One-off Payment

  • Adds a single payment linked to the contract.

  • Typically used for exceptional payments outside the regular rent schedule.

Statuses in Real Estate Manager

Statuses indicate the progress of an action through the approval and synchronization process. Understanding these statuses helps users know what to do next.

Status Definitions and Required Actions

• No Lease Accounting Readiness Review

  • Meaning: The contract has been set up in Real Estate Manager but is not yet marked as active, and the readiness review has not been completed.

  • Next Step: Mark the contract as active and perform the readiness review.

• Unsynchronized

  • Meaning: The contract is Lease Accounting Significant but has not yet been synchronized with LAM.

  • Next Step: Perform the readiness review and synchronize the contract.

• Pending Real Estate Approval

  • Meaning: Changes are waiting for approval within Real Estate Manager.

  • Next Step: Review and approve these changes promptly to avoid delays.

• Approved by Real Estate

  • Meaning: Changes have been approved in Real Estate Manager and are ready to be synchronized with LAM.

  • Next Step: Initiate synchronization.

• Pending Account Approval

  • Meaning: Changes have been synchronized to LAM and are awaiting approval from the accounting team.

  • Next Step: No action required from the Real Estate Manager user at this stage.

• Synchronized

  • Meaning: Changes have been fully synchronized and approved.

  • Next Step: No further action needed.

• Rejected by Real Estate

  • Meaning: Changes were rejected during the Real Estate Manager approval process.

  • Next Step: Review the data, correct any errors, and resubmit for approval.

• Rejected by Accounting Approval

  • Meaning: Changes were rejected by the accounting team in LAM.

  • Next Step: Check the error details, correct the information in Real Estate Manager, and synchronize again.

Best Practices

• Always check the current status before taking any action.

• Use the correct action type for the change needed.

• Document the reason for every update for audit purposes.

• When in doubt, consult the accounting team to ensure compliance.

• To track the history of changes, review the audit log or lease accounting history in the system.