Understanding The Lease Abstraction Process

  • March 20, 2020
  • admin@ohi

Lease abstraction process refers to the way in which the important or crucial points covered in a real estate lease agreement are summarized. A lease abstract summarizes the key aspects of a lease agreement from a legal, business, and financial point of view. A reader can understand the salient features of a lease agreement by simply reading the lease abstract, which can save a lot of time and effort.

The process through which the core content of a lease is extracted is called lease abstracting

What is Lease Abstraction? 

Making proper lease abstracts is the quickest way to keep track of all lease agreements that have been entered into by a company or an individual. Several companies enter into numerous lease agreements with different parties. A lease abstract can be made for a single property or a whole portfolio of properties.

If several properties are involved, then it becomes more crucial for companies to undertake a lease abstraction process. A Real Estate Abstract allows you to keep track of all the crucial information that forms part of a lease agreement. It summarizes information such as the commencement date and expiration of a lease, the obligations of the tenant and the landlord, the terms of payment, as well as logistical details.

The lease abstract mentions the clause in which this information has been set out in the lease agreement so that a person reading the lease abstract can easily find the relevant clause in a lease agreement for more detailed understanding.

What Does a Lease Abstract Contain?

The level of information in an abstract is determined by how it will be used, however, a lease abstract typically includes some fundamental information. This information includes the tenants’ and landlord’s names, lease duration, whether the renter has already exercised the right to renew, date of expiration, tenant’s monthly base rent, options for renewal, property taxes, the space’s address and square footage, options for subletting, Clauses of termination, future rent increases are planned, any exclusive use provisions that exist, and Whether the tenant has a right of first refusal if the property owner sells or leases another space in the building. 

There might be more information available in the abstract depending on the type of lease. The main objective of the abstract is to provide information of core importance and thus everything that is of greater importance to the reader must be there. A lease is extremely lengthy and if someone searches for the information they need, it is bound to waste their time. Thus, lease abstraction helps by providing such information conveniently. 

Why is Making a Lease Abstract Essential?

A lease agreement can be a complex document and can be almost a hundred pages long. Most of the information contained in a lease agreement is routine information and standard clauses. However, a lease agreement also contains some crucial information that all parties to the lease agreement must be aware of. Lease abstracting enables the reader to save time and get the work done conveniently. To know what makes this important and essential, understanding lease abstraction process is important. 

Having a lease abstract made is an easy way for a party to a lease agreement to keep themselves aware of the important aspects of the lease agreement. Instead of having to go through hundreds of pages of complex legal language, the party can simply read half a page of the legal abstract to keep themselves abreast with the necessary information. Undergoing a lease abstract process becomes more crucial if there are more than one lease agreements involved. If it is difficult to read and understand one lease agreement, doing so for a hundred lease agreements is even more difficult.

What is the Essential Information That Needs to be Present in a Lease Abstract?

A lease abstract should provide all the information that a lessee or a landlord needs to know about a lease agreement. From the outset, a well-drafted lease abstract should define the key terms contained in the lease agreement that need to be known before the parties sign the agreement.

The lease abstract will contain information such as the commencement and expiration of the lease, the duties and obligations of both parties, the terms of payment, when can rent be increased, whether the lease can be renewed, who is responsible for the maintenance of the property, and who needs to undertake the cost of improvements to the property.

The lease abstract will provide an outline of the lease agreement so that the reader can understand and act on the information. The primary purpose of a lease abstract is to save time, effort, and money.

How is a Lease Abstract Made?

For a lease abstract to be effective, the crucial and important clauses contained in a lease agreement need to be identified and summarized in the lease abstract. A well-drafted lease abstract will cater to the needs of the parties of a lease agreement and provide the information that they require. Unlike a lease agreement which is meant to be interpreted in a court of law, a lease abstract is meant to be read and understood by the parties to the lease agreement.


If a party to a lease agreement is unsure about the lease abstract process, they can outsource their lease abstraction needs to a professional in the field. OHIs team of Lease Abstractors are skilled in the job of handling legal abstraction processes and can do the job in a timely, efficient and effective manner. Outsourcing your lease abstraction requirements may save a lot of time and money.


OHI is a fifteen-year-old real estate services company working with 50+ commercial and residential real estate developers, funds and property management companies across USA. Our deep expertise in real estate accounting, financial analysis, lease administration and asset management has helped clients cut associated costs by 40-50%. We currently provide these services to a portfolio of 50000 units across clients.

We invite you to experience leasing and accounting outsourcing through us.

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