The Role of AI in Lease Abstraction and Administration
Artificial intelligence (AI) and machine learning are fast becoming an integral part of lease abstraction and administration processes. Lease abstraction software and modern lease administration platforms deploy innovative AI and machine learning technologies to make lease portfolio management more efficient. This blog discusses the role AI can play in lease abstraction and administration and its pros and cons.
Using AI to abstract leases can make the lease abstraction process faster
There’s no doubt that AI can speed up the lease abstraction and administration process. Leases are vast and run into hundreds of pages. Plus, each lease portfolio may have thousands of leases. AI can sift through the pages and extract relevant data in no time in comparison to manual lease abstraction. While some human effort is indispensable when it comes to lease abstraction and administration, AI can speed up the process and make it a little more efficient.
Lease AI tools that use Optical Character Recognition can make your lease information ‘searchable’, so your lease administrators don’t have to read through the entire document to find specific clauses. They can enter the clause they are looking for in the search box and the system will automatically highlight those sections of the lease where the said clause shows up. That said, there’s one caveat: your lease administrators should know what they are looking for and should account for any variations in terminologies so the search feature doesn’t miss anything out.
For organizations that don’t have enough resources to invest in lease abstraction and administration in-house, AI-based lease abstraction and administration software platforms may be a viable option.
However, if you are not comfortable with AI-based, automated lease abstraction, outsourcing your lease abstracts to a trusted lease abstraction and administration vendor is a great choice. They would have the team strength, expertise and experience to get your entire lease portfolio abstracted in a timely manner.
Using AI to abstract leases can bring about more standardization in the lease abstracts
When you have a team of lease abstractors abstracting your leases, ensuring that all your lease abstracts are standardized may be challenging, as there are chances of slight variations in the lease abstract’s language and wordings, even if the content in the lease abstracts is accurate. Automation and AI can bring about more consistency in this regard. But, that’s not the only solution. An experienced lease abstraction services vendor can help you resolve challenges such as lack of language consistency in your lease abstracts by a) Creating a well-defined lease abstraction template for you and b) Deploying a well-trained, team of professional lease abstractors and lease administrators who are trained to follow specific lease abstraction standards.
Using AI to abstract leases may be slightly cheaper
Deploying AI for lease abstraction can also be cost-effective in comparison to having a large in-house lease abstraction and administration team. You could deploy automated lease abstraction and employ just a handful of experienced lease administrators to refine the output. However, there are other costs to consider such as the software license fee that you would be paying to the lease abstraction software vendor, training costs associated with training your in-house lease abstraction and administration team on the software and of course, there’s always some risk involved when investing in any new technology.
What if you discover that the lease abstraction software isn’t a right fit for you? While in the case of SaaS (Software as a Service) model, you may be able to simply discontinue using the lease abstraction software once your contract ends, you would’ve already invested a lot of time, effort and money in migrating all your leases into the new tool.
While deploying AI in your next lease abstraction project may not be a bad decision, you cannot rely on AI alone for your lease abstraction, administration or lease portfolio management needs. Every single AI-based output such as a lease abstract or a CAM reconciliation calculation should ideally be cross-verified and checked by an experienced lease abstraction and administration professional.
This is important because, no two leases are the same, and there are often instances where information is in different formats such as a handwritten note or an email. Plus, in cases where human diligence is required, AI may fall short as it is no match for years of professional experience or expertise.
