Real Estate and Property Management Solutions

[Lease:Status] is 'Active'
AND [Lease:ExpirationDate] - [T] <= 180
AND [Lease:RenewalNotificationSent]

To: property.manager, leasing.director
CC: asset.manager
Subject: Lease Expiration Alert - [Lease:TenantName] - [Lease:PropertyName]

Body:
LEASE EXPIRATION APPROACHING

Property: [Lease:PropertyName]
Unit: [Lease:UnitNumber]
Tenant: [Lease:TenantName]
Lease Expiration: [Lease:ExpirationDate]
Days Until Expiration: [[Lease:ExpirationDate] - [T]]

Lease Details:
Lease ID: [Lease:No]
Commencement Date: [Lease:CommencementDate]
Current Monthly Rent: [Lease:CurrentBaseRent]
Rentable Sq Ft: [Lease:RentableSqFt]
Current Rate per Sq Ft: [Lease:CurrentBaseRent] ÷ [Lease:RentableSqFt] / 12

Renewal Options:
[IF([Lease:RenewalOptions] > 0,
'Tenant has ' + [Lease:RenewalOptions] + ' renewal option(s):
Option Terms: [Lease:RenewalTermDescription]
Notice Required: [Lease:RenewalNoticeDays] days prior to expiration
Notice Deadline: [Lease:ExpirationDate] - [Lease:RenewalNoticeDays]
Days Until Notice Deadline: [[Notice deadline] - [T]]
', 'No renewal options in lease')]

Lease Performance:
Payment History: [IF(Lease has late payments, 'Late payments: ' + [Count], 'Current - No late payments')]
Maintenance Requests: [Count of maintenance requests during lease]
Lease Violations: [Any documented violations]
Tenant Quality: [Rating if available]

Recommended Actions:

IF TENANT IS DESIRABLE:
☐ Contact tenant 6 months before expiration
☐ Gauge tenant's renewal interest
☐ Prepare renewal proposal
☐ Market rent analysis for renewal rate
☐ Consider tenant improvements or concessions
☐ Draft renewal lease agreement

IF TENANT NOT RENEWING OR UNDESIRABLE:
☐ Begin marketing unit for re-lease
☐ Schedule property showings
☐ Prepare unit for turnover
☐ Budget for turnover costs
☐ Plan for vacancy period

Market Rent Analysis:
Current Rent: [Current rent per sq ft]
Market Rent: [Comparable market rate]
Variance: [Difference %]

Renewal Strategy:
[IF(Current rent < Market, 'BELOW MARKET - Opportunity to increase rent'),
 IF(Current rent > Market, 'ABOVE MARKET - Retention risk, consider tenant quality')]

Vacancy Cost Analysis:
Monthly Rent: [Monthly rent]
Estimated Vacancy Period: 3-6 months
Lost Rent: [Monthly rent × 4.5]
Turnover Costs: [Estimated cleaning, repairs, leasing commission]
Total Vacancy Cost: [Lost rent + Turnover costs]

Tenant Retention vs. Re-Leasing:
Retention benefits:
- No vacancy period
- No turnover costs
- Known tenant performance
- Relationship continuity

Re-leasing benefits:
- Adjust to market rent
- Opportunity to improve tenant mix
- Refresh unit with turnover work

Initiate renewal discussion with tenant within 30 days.

Tenant Contact: [Contact information]
Renewal Proposal Template: [Link]
Market Rent Comps: [Report link]

[T] > [Lease:ExpirationDate] - [Lease:RenewalNoticeDays]
AND [Lease:RenewalOptionExercised] is true
AND [T] = [Lease:RenewalExerciseDate]

Type: Warning

Message:
RENEWAL OPTION EXERCISE DEADLINE PASSED

Lease: [Lease:No]
Tenant: [Lease:TenantName]
Property: [Lease:PropertyName]
Unit: [Lease:UnitNumber]

Renewal Option Terms:
Notice Requirement: [Lease:RenewalNoticeDays] days prior to expiration
Lease Expiration: [Lease:ExpirationDate]
Notice Deadline: [Lease:ExpirationDate] - [Lease:RenewalNoticeDays]

Attempted Exercise:
Exercise Date: [T]
Days After Deadline: [[T] - [Deadline]]

⚠️ TENANT MISSED RENEWAL OPTION DEADLINE

Lease Provision:
Most leases require written notice by specific deadline to exercise renewal option.
Failure to provide timely notice results in forfeiture of renewal option.

Legal Considerations:
Strict compliance with notice deadlines is typically enforced.
Tenant's late notice does not obligate landlord to renew.

Landlord Options:

OPTION 1: ENFORCE DEADLINE (Decline Late Exercise)
- Tenant forfeits renewal option
- Lease expires as scheduled
- Re-lease unit at market terms
- Potential for higher rent

OPTION 2: ACCEPT LATE EXERCISE (Waive Deadline)
- Goodwill gesture to retain tenant
- Preserve tenant relationship
- Avoid vacancy and turnover costs
- Consider charging late fee or adjustment to renewal terms

OPTION 3: NEGOTIATE NEW LEASE
- Not a renewal (fresh lease negotiation)
- No obligation to honor option renewal terms
- Negotiate at current market rates
- New lease terms

Recommendation Factors:
• Tenant quality and payment history: [Assessment]
• Current rent vs. market rent: [Comparison]
• Cost of turnover and vacancy: [Estimate]
• Demand for this unit type: [Market conditions]
• Strategic tenant mix goals

Financial Analysis:
Option 1 - Let Lease Expire:
  Market Rent Potential: [Market rate]
  Vacancy Cost: [Estimated]
  Turnover Cost: [Estimated]
  Net Outcome: [Calculation]

Option 2 - Accept Late Exercise:
  Renewal Rent: [Per renewal option terms]
  No Vacancy
  No Turnover Cost
  Net Outcome: [Calculation]

Consult with legal counsel on enforcement of notice deadline.

General Counsel: [Contact]
Asset Manager: [Contact]

[T] is billing date for lease
AND [Lease:Status]

Calculate Rent Components:

BASE RENT:
[IF([Lease:EscalationType] is 'Fixed Increase',
  Formula: [Lease:InitialBaseRent] × (1 + [Lease:AnnualIncreasePercent])^[[Years since commencement]]
)]

[IF([Lease:EscalationType] is 'CPI Adjustment',
  Formula: [Lease:PriorYearBaseRent] × ([CurrentCPI] ÷ [PriorYearCPI])
)]

[IF([Lease:EscalationType] is 'Stepped',
  Formula: Lookup rent from lease schedule based on current date
  [FOR EACH step in lease schedule:
    Year [Year]: $[Rent amount]
  ]
  Current Step: $[Applicable amount]
)]

[IF([Lease:EscalationType] is 'Fair Market Value',
  Formula: [Lease:FMVRentDetermination]
  Note: Requires appraisal or market analysis at FMV reset date
)]

CAM CHARGES (Common Area Maintenance):
[IF([Lease:CAMStructure] is 'Pro Rata Share',
  Formula: [Property:TotalCAMExpenses] × ([Lease:RentableSqFt] ÷ [Property:TotalRentableSqFt])
)]

[IF([Lease:CAMStructure] is 'Fixed CAM',
  Formula: [Lease:FixedCAMRate] × [Lease:RentableSqFt] ÷ 12
)]

[IF([Lease:CAMStructure] is 'CAM Cap',
  Formula: MIN([Calculated CAM], [Lease:BaseYear] × (1 + [Lease:CAMCapPercent]))
)]

TAX REIMBURSEMENT:
[IF([Lease:TaxStructure] is 'Pro Rata',
  Formula: [Property:TotalPropertyTax] × ([Lease:RentableSqFt] ÷ [Property:TotalRentableSqFt])
)]

[IF([Lease:TaxStructure] is 'Base Year',
  Formula: MAX(0, [Property:CurrentTax] - [Lease:BaseYearTax]) × ProRataShare
)]

INSURANCE REIMBURSEMENT:
Formula: [Property:InsuranceCost] × ([Lease:RentableSqFt] ÷ [Property:TotalRentableSqFt])

PERCENTAGE RENT:
[IF([Lease:PercentageRentClause],
  Formula: MAX(0, ([Tenant:GrossSales] - [Lease:SalesBreakpoint]) × [Lease:PercentageRentRate])
)]

TOTAL MONTHLY RENT:
= Base Rent
+ CAM Charges
+ Tax Reimbursement  
+ Insurance Reimbursement
+ Percentage Rent (if applicable)
- Rent Abatement (if in abatement period)

Then Create Invoice:
Customer: [Tenant:CustomerNo]
Amount: [Total Monthly Rent]
Line Items:
  Base Rent: [Amount]
  CAM: [Amount]
  Tax Reimbursement: [Amount]
  Insurance: [Amount]
  [IF applicable: Percentage Rent: [Amount]]
Due Date: [Lease:PaymentDueDay]

1. Lease Agreement
   Link via: [SalesReport:LeaseNo] = [Lease:No]

2. Tenant Sales Report (Custom Table)
   Link via: [Lease:TenantNo] = [SalesReport:TenantNo]

[Lease:PercentageRentClause] is true
AND [T]

To: [Tenant:Email]
CC: property.manager
Subject: Monthly Sales Report Required - [Property:Name]

Body:
MONTHLY SALES REPORT DUE

Tenant: [Tenant:Name]
Property: [Property:Name]
Unit: [Lease:UnitNumber]
Reporting Period: [Prior month]
Due Date: 15th of month following sales period

PERCENTAGE RENT CLAUSE:
Your lease includes percentage rent based on gross sales.

Lease Terms:
Annual Sales Breakpoint: $[Lease:SalesBreakpoint]
Percentage Rent Rate: [Lease:PercentageRentRate]%
Calculation: [PercentageRentRate]% of gross sales exceeding $[Breakpoint]

Monthly Reporting Requirement:
Tenant must submit monthly sales report by 15th of following month.

Required Information:
☐ Total Gross Sales for month
☐ Sales by category (if specified in lease)
☐ Any exclusions per lease (returns, sales tax, etc.)
☐ Year-to-date cumulative sales
☐ Comparison to breakpoint

Sales Report Form: [Link to online portal or form]

Year-to-Date Status:
YTD Sales Reported: [Sum of prior months]
Annual Breakpoint: $[Lease:SalesBreakpoint]
Remaining to Breakpoint: $[Breakpoint - YTD Sales]
[IF(YTD > Breakpoint, 'PERCENTAGE RENT ACTIVE', 'Not yet at breakpoint')]

Percentage Rent Calculation Example:
IF Monthly Sales = $150,000
AND Annual YTD Sales = $1,200,000
AND Breakpoint = $1,000,000

Cumulative sales exceeding breakpoint: $200,000
Percentage rent rate: 6%
Percentage rent due: $200,000 × 6% = $12,000

Percentage rent is reconciled annually and adjusted based on actual sales.

Audit Rights:
Landlord reserves right to audit tenant's sales records per lease terms.
Failure to submit accurate sales reports is lease violation.

Late Reporting Consequences:
- Lease default
- Late fees
- Estimate percentage rent (tenant billed on estimate)
- Potential lease termination for repeated violations

Submit sales report within 5 days to avoid default.

Sales Reporting Portal: [Link]
Property Manager: [Contact]

[T:Month] is 4
AND [T:Day]

To: property.accountant, property.manager
Subject: CAM Reconciliation Required - [Property:Name] - [Prior Year]

Body:
ANNUAL CAM RECONCILIATION DUE

Property: [Property:Name]
Reconciliation Period: [Prior Year]
Deadline: 90 days after year end (March 31)

CAM RECONCILIATION PROCESS:

STEP 1: Compile Actual Operating Expenses
Gather all operating expenses for property for prior year.

Typical CAM Expense Categories:
☐ Janitorial and cleaning
☐ Landscaping and grounds maintenance
☐ Snow removal
☐ Parking lot maintenance and striping
☐ Common area utilities (electric, water, gas)
☐ HVAC maintenance and repairs
☐ Elevator maintenance
☐ Security services
☐ Property management fees
☐ Common area repairs
☐ Pest control
☐ Trash removal
☐ Property taxes (if included in CAM)
☐ Property insurance (if included in CAM)

STEP 2: Calculate Total Recoverable Expenses
Total CAM Expenses: [Sum of all CAM categories]

Less: Non-Recoverable Expenses
- Capital improvements
- Leasing commissions
- Tenant-specific expenses
- Costs excluded by lease terms

Recoverable CAM Pool: $[Amount]

STEP 3: Calculate Tenant Pro Rata Shares
[FOR EACH tenant:
  Tenant: [Tenant name]
  Rentable Sq Ft: [Sq ft]
  Pro Rata %: [Sq ft ÷ Total property sq ft]
  Tenant's Share: [Pro Rata % × Recoverable CAM]
]

STEP 4: Compare to Estimated CAM Billed
[FOR EACH tenant:
  Tenant: [Tenant name]
  Actual CAM Share: $[Amount]
  Estimated CAM Billed: $[Amount billed during year]
  Variance: $[Actual - Estimated]
  [IF(Variance > 0, 'TENANT OWES: $' + [Variance], 'TENANT CREDIT: $' + [ABS(Variance)])]
]

STEP 5: Prepare Reconciliation Statements
Generate reconciliation statement for each tenant showing:
- Total property operating expenses by category
- Tenant's pro rata share percentage
- Tenant's share of actual expenses
- Total estimated CAM paid during year
- Balance due or credit

STEP 6: Bill or Credit Tenants
- Tenants with underpayment: Invoice for balance due
- Tenants with overpayment: Issue credit or refund per lease terms

STEP 7: Adjust Current Year Estimates
Based on actual prior year expenses, adjust current year CAM estimates.

Suggested Current Year CAM: [Prior year actual × 1.03 for inflation]

CAM Reconciliation Challenges:

TENANT DISPUTES:
Common disputes:
- Capital vs. repair classification
- Management fee calculation
- Expenses benefiting only certain tenants
- Vacant space treatment

Resolution:
- Provide detailed expense documentation
- Reference lease CAM definition
- Offer to meet and review expenses
- Maintain professional communication

LEASE VARIATIONS:
Different leases may have:
- CAM caps
- Exclusions
- Base year structures
- Gross leases (no CAM recovery)

System must handle multiple CAM structures within same property.

Reconciliation Report: [Generate report]
Tenant Reconciliation Statements: [Generate statements]

1. Property (Custom Table)
   Link via: [GLEntry:PropertyCode] = [Property:Code]

2. G/L Account (15)
   Link via: [GLEntry:GLAccountNo] = [15:1]

[15:CustomExpenseType] is 'Property Operating Expense'
AND [GLEntry:CAMRecoverable] is true
AND [15:CustomCapitalExpense]

Type: Warning

Message:
CAM RECOVERABILITY QUESTION

Property: [Property:Name]
Account: [15:1] - [15:2]
Amount: [GLEntry:Amount]
Expense Type: [15:CustomExpenseType]
Vendor: [GLEntry:VendorName]
Description: [GLEntry:Description]

⚠️ CAPITAL EXPENSE MARKED AS CAM RECOVERABLE

CAM Recoverability Rules:
Operating expenses are generally recoverable from tenants.
Capital expenses are generally NOT recoverable unless specifically allowed in lease.

Expense Classification:

OPERATING EXPENSES (Recoverable):
- Repairs and maintenance
- Utilities
- Janitorial services
- Landscaping
- Property management
- Insurance
- Property taxes
- Routine replacements

CAPITAL EXPENSES (Generally Not Recoverable):
- Building improvements
- Major renovations
- Tenant improvements
- Equipment purchases >$X threshold
- Life-extending improvements
- Enhancements adding value

GRAY AREAS (Review Lease):
- Major equipment replacement (HVAC, roof)
- Parking lot repaving
- Building system upgrades
- Energy efficiency improvements

Some leases allow capital expense amortization:
"Landlord may recover capital expenses over useful life if expense reduces operating expenses."

Example: New energy-efficient HVAC
Cost: $100,000
Useful life: 10 years
Amortized annual recovery: $10,000/year

This Expense:
Account: [15:2]
Amount: [GLEntry:Amount]
Nature: [Description suggesting capital vs. operating]

Recommended Classification:
[IF(Clearly capital, 'NOT RECOVERABLE - Change CAM flag to false'),
 IF(Lease allows amortization, 'AMORTIZE - Set up amortization schedule'),
 IF(Unclear, 'REVIEW LEASE - Consult lease CAM definition')]

Tenant Disputes:
Improperly recovering capital expenses as CAM leads to:
- Tenant dispute
- Reconciliation rejection
- Potential litigation
- Requirement to refund
- Damage to tenant relationship

Review expense classification and lease terms before including in CAM pool.

Property Manager: [Contact]
Lease File: [Link to lease CAM provisions]

[Lease:Status] is 'Terminated'
AND [Lease:SecurityDepositAmount] > 0
AND ([T] - [Lease:ActualEndDate]) > [Lease:StatutoryReturnDays]
AND [Lease:SecurityDepositReturned]

To: property.manager, accounting
Subject: URGENT - Security Deposit Return Overdue - [Lease:TenantName]

Body:
SECURITY DEPOSIT RETURN DEADLINE PASSED

Tenant: [Lease:TenantName]
Property: [Property:Name]
Unit: [Lease:UnitNumber]
Lease End Date: [Lease:ActualEndDate]
Days Since Lease End: [[T] - [Lease:ActualEndDate]]

Security Deposit:
Original Deposit: $[Lease:SecurityDepositAmount]
Interest Earned: $[Lease:SecurityDepositInterest]
Total Due: $[Lease:SecurityDepositAmount + Interest]

⚠️ STATUTORY DEADLINE EXCEEDED

State Law Requirements ([Property:State]):
Return Period: [Lease:StatutoryReturnDays] days after lease termination
Deadline Was: [Lease:ActualEndDate + StatutoryReturnDays]
Days Overdue: [[T] - [Deadline]]

LEGAL CONSEQUENCES OF LATE RETURN:
Many states impose penalties for failure to return security deposit timely:

Typical Penalties:
- Forfeit right to deduct for damages
- Pay double or triple damages to tenant
- Pay tenant's attorney fees
- Interest on withheld amount

[Property:State] Law:
[State-specific security deposit statute citation]
Penalty: [Specific penalty for late return in this state]

Security Deposit Deductions:
Landlord may deduct for:
✓ Unpaid rent
✓ Damage beyond normal wear and tear
✓ Cleaning costs to restore to move-in condition
✓ Unpaid utilities (if landlord responsible)

NOT Deductible:
✗ Normal wear and tear
✗ Carpet replacement if useful life expired
✗ Paint if time since last painting exceeds standard
✗ Improvements or upgrades

Required Actions - IMMEDIATE:

1. INSPECT UNIT AND DOCUMENT
☐ Compare to move-in condition report
☐ Photograph all damage
☐ Itemize deductions with cost estimates
☐ Distinguish damage from normal wear and tear

2. PREPARE ACCOUNTING
☐ Original security deposit: $[Amount]
☐ Interest: $[Amount]
☐ Less: Unpaid rent: $[Amount]
☐ Less: Damage repairs: $[Amount with itemization]
☐ Less: Cleaning: $[Amount]
☐ Net amount to return: $[Calculation]

3. SEND REQUIRED NOTICE
☐ Itemized statement of deductions
☐ Copies of receipts (many states require)
☐ Check for net refund amount
☐ Send to tenant's forwarding address
☐ Certified mail (proof of mailing)

4. SEND TODAY - DO NOT DELAY FURTHER

Tenant Forwarding Address:
[Lease:TenantForwardingAddress]
[IF no forwarding address, 'ATTENTION: No forwarding address on file. Send to last known address.']

Security Deposit Template Letter: [Link]

Risk Assessment:
If tenant sues for wrongful withholding:
Potential liability: [Deposit + Interest + Statutory penalty + Attorney fees]

IMMEDIATE ACTION REQUIRED TO MINIMIZE LIABILITY.

Legal Department: [Contact if tenant threatens litigation]

[Property:State] is in ('New York', 'New Jersey', 'Illinois', 'Connecticut', 'Massachusetts', 'New Hampshire')
AND [T:Month] is 12 AND [T:Day] is 31
AND [Lease:Status]

Calculate Security Deposit Interest:

State Interest Requirements:
[Property:State] requires landlords to pay interest on security deposits.

Interest Calculation:
Principal: [Lease:SecurityDepositAmount]
Interest Rate: [State-specified rate for year]
Period: [Lease year or calendar year depending on state]

Formula:
Interest = Principal × Rate × (Days held ÷ 365)

[Property:State] Specific Rules:
[IF State is 'New York',
'New York: Interest required if deposit held >6 months
Rate: Prevailing rate less 1%
Frequency: Annual
Payment: Credit against rent or paid annually']

[IF State is 'New Jersey',
'New Jersey: Interest required for all deposits
Rate: State-set rate (changes annually)
Frequency: Annual
Payment: Paid to tenant or credited to rent']

[IF State is 'Illinois',
'Illinois: Interest required for deposits held >6 months in buildings with 25+ units
Rate: Set by regulation (currently ~0.0% due to low interest environment, but still must track)
Frequency: Annual
Payment: Within 30 days of 12-month period end']

Calculated Interest:
Year: [Year]
Interest Rate: [Rate]%
Interest Earned: $[Calculated amount]

Then Update:
[Lease:SecurityDepositInterest] = [SecurityDepositInterest] + [Current year interest]

Then Create:
[IF State requires annual payment,
  Create journal entry crediting tenant rent or create payment
]

Compliance Documentation:
☐ Interest calculation documented
☐ Interest paid or credited to tenant
☐ Statement sent to tenant showing interest
☐ Interest record maintained in lease file

Non-Compliance Penalty:
Failure to pay required interest can result in forfeiture of right to retain any portion of security deposit.

Security Deposit Interest Statement Template: [Link]

[Lease:Status] is 'Approved'
AND [Lease:ASC842Classification]

ASC 842 Lease Classification (Lessor Accounting):

Evaluate Classification Criteria:

1. SALES-TYPE LEASE (meets any criterion):
   [Evaluate: Ownership transfers at end of lease?] 
   [Evaluate: Purchase option tenant reasonably certain to exercise?]
   [Evaluate: Lease term is major part of economic life (≥75% guideline)?]
   [Evaluate: PV of lease payments ≥ substantially all FV (≥90% guideline)?]
   [Evaluate: Asset has no alternative use and lessor has right to payment?]
   
   IF any criterion met → Sales-Type Lease

2. DIRECT FINANCING LEASE:
   Same criteria as Sales-Type, but:
   - Carrying amount of asset = Fair value
   - No manufacturer/dealer profit
   
3. OPERATING LEASE:
   Does not meet any Sales-Type or Direct Financing criteria
   → Operating Lease

For This Lease:
Asset: [Property:Name] - [Lease:UnitNumber]
Fair Value: $[Property:FairValue allocated to unit]
Carrying Amount: $[Property:CarryingAmount allocated to unit]

Lease Terms:
Lease Term: [Lease:TermYears] years
Economic Life of Asset: [Property:EconomicLife] years
Ratio: [Lease:TermYears ÷ Property:EconomicLife] = [Ratio]%

Lease Payments:
Annual Payments: $[Lease:AnnualRent]
PV of Lease Payments: $[Calculated PV using implicit rate]
Asset Fair Value: $[Fair value]
Ratio: [PV ÷ FV] = [Ratio]%

Ownership Transfer: [Lease:OwnershipTransfers]
Purchase Option: [Lease:PurchaseOption]
Alternative Use: [Property has alternative use after lease]

Classification Result: [OPERATING LEASE / SALES-TYPE / DIRECT FINANCING]

Most Real Estate Leases = OPERATING LEASES
(Do not transfer ownership, asset has alternative use)

Set: [Lease:ASC842Classification] = [Result]

Then Determine Journal Entries:

IF Operating Lease:
Monthly Entry:
Dr. Cash / Rent Receivable
Cr. Rental Revenue (straight-line over lease term)

Recognize revenue on straight-line basis regardless of payment structure.

IF Sales-Type or Direct Financing:
At Commencement:
Dr. Net Investment in Lease
Cr. Asset
Cr. Profit (if Sales-Type)

Monthly:
Dr. Cash
Cr. Net Investment in Lease
Cr. Interest Revenue

Real Estate Context:
Vast majority of commercial real estate leases are classified as Operating Leases under ASC 842.

ASC 842 Compliance Checklist:
☐ Lease classification documented
☐ Lease term determined (including renewal options reasonably certain)
☐ Lease payments identified (fixed and variable)
☐ Discount rate determined
☐ Revenue recognition method established
☐ Lease disclosure requirements identified

CFO / Controller Review: [If non-operating classification]