Terms - Contract Module

You can add terms in bulk using the Contract Terms Wizard. This saves you time in scenarios where amendments require adding multiple term options at the same time. The Contract Terms Wizard ignores terms with a status of Declined or Expired.

This method should be used when you have multiple renewal options that are the same length. If your term options have different lengths, follow the Add an Individual Term procedures below.

To use the Contract Terms Wizard:

1. Click Add Item.

   This displays in the Actions menu on the right side of the page.

   A dialog box opens, asking if you want to use the Contract Terms Wizard.

2. Click Yes.

   The Contract Terms Wizard opens.

3. Complete the following date fields:

   • Commencement Date: Enter the date when the first term for the lease started in this field.

   • Expiration Date: Enter the current expiration date (excluding options) in this field.

4. Enter the number of term options you want to create in the Number of Options field.

   • If terms have already been generated for a contract, the wizard does not create a new “original” term.

   • If there isn’t an “original” term and the user creates a term with the Renewal option type, the wizard will create one “original” term and the rest will be “renewal” terms.

   • Any additional terms created will have the next term number in the sequence which has been established by the preexisting terms.

     For example, if one original term and two additional terms already exist, the next term in the sequence would be term #4.

5. Select the option type from the Option Type field.

6. Enter the term length in years in the Term Length (years) field.

7. Enter the number of days, weeks, months, or years in advance that you can take action on the key date in the Earliest Notice Period fields.

   The Earliest Notice Period fields are used to calculate the value of the Earliest Notice Date field, using this formula:

   Earliest Notice Date = Coverage Period Begin Date - Earliest Notice Period - 1.

8. Enter the number of days, weeks, months, or years you have to submit notice after the notice period begins in the Last Notice Period fields.

   A notice is a warning that the key date is imminent. The system will automatically calculate the value in the Last Notice Date using this formula:

   Last Notice Date = Coverage Period Begin Date - Last Notice Period - 1

9. Enter the rentable area in the Rentable Area field.

   Important!

   The Rentable Area is used to calculate the Average Rent / Area Unit value when Terms are linked to an expense schedule. Please ensure you enter the appropriate Rentable Area value.

10. Select the unit of measurement you are using for your rentable area from the Area Unit field.

11. Click Generate Contract Terms.

    The window closes. Your new contract terms appear in the Contract Terms List.

To add an individual term:

1. Click Add Item.

   This displays in the Actions menu on the right side of the page.

   A dialog box opens, asking if you want to use the Contract Terms Wizard.

2. Click No.

   The dialog box closes.

3. Enter the term number of the term you are creating in the Term Number field.

   Enter the term number in 2-digit format—for example, the first term would be entered as 01.

4. Select the term type—for example, original or renewal—from the Type field.

   Create a new group or category.

5. Select the term status from the Status field.

   According to ASC 842 regulations, you must include all likely options in your accounting. If a term option is likely, select Likely from the field.

   The value of the Status field has the following impact on the Remaining Number of Terms on the Contract > Details > Summary page:

   • Active — removes term from list of remaining terms. This is because the Active term is the current term, not a future term to be acted on.

   • Available — term included in list of remaining terms. This is because the term CAN be exercised, but has not been exercised yet.

   • Declined — removes term from list of remaining terms. This is because the term had option to be exercised, but the user elected not to do so.

     Declining a term will not remove subsequent terms from being counted as remaining terms.

   • Exercised — removes term from list of remaining terms. This is because the user has chosen to exercise the term. Since the user cannot do so again, it is not considered a remaining term.

   • Expired — removes term from list of remaining terms. This is because the option to exercise the term has passed.

   • Likely — term included in list of remaining terms.

6. Enter the rentable area in the Rentable Area field.

   This field should pre-populate if you entered it in the Step One: Contract Summary Setup Page procedures.

   Important!

   The Rentable Area is used to calculate the Average Rent / Area Unit value when Terms are linked to an expense schedule. Please ensure you enter the appropriate Rentable Area value.

7. Select the measurement unit you are using for your rentable area from the Area Unit field.

8. Select the Include in Accruals? check box to flag this term as needing to be included in your accrued expense savings.

   Note:

   If you enter key date data on a term, a key date record will be automatically created on the Key Dates page.

9. Select the key date group of the key date you want to associate with your term from the Group field.

   Create a new group or category.

   Groups are the first level of organization in Lucernex. Groups are the parents of types, and grandparents of categories. Groups, types, and categories are used to simplify reporting.

10. Select the type of key date from the Type field.

    If you want to create a new type, follow the Add a Type procedures. Types are the second level of organization in Lucernex. Types are the children of groups, and parents of Categories. Groups, types, and categories are used to simplify reporting.

11. Enter a description of the key date in the Description field.

12. Enter the begin date in the Coverage Period Begin Date field.

    You can also click Calendar to open the Date Picker and select the appropriate date.

13. Enter the end date in the Coverage Period End Date field.

    You can also click Calendar to open the Date Picker and select the appropriate date.

    Note:

    The Action fields and the Notice check boxes will be used when you decide to take action on an option, and when notice has been sent or received.

14. Enter the number of days, weeks, months, or years in advance that you can take action on the key date in the Earliest Notice Period fields.

    The Earliest Notice Period fields are used to calculate the value of the Earliest Notice Date field, using this formula:

    Earliest Notice Date = Coverage Period Begin Date - Earliest Notice Period - 1.

15. Enter the number of days, weeks, months, or years you have to submit notice after the notice period begins in the Last Notice Period fields.

    A notice is a warning that the key date is imminent. The system will automatically calculate the value in the Last Notice Date using this formula:

    Last Notice Date = Coverage Period Begin Date - Last Notice Period - 1

    Important!

    Add notice periods to the renewal term, NOT the original term.

16. Enter the earliest date you can give notice in the Earliest Notice Date field.

    You can also click Calendar to open the Date Picker and select the appropriate date.

17. Enter the length of the tickler period using the Tickler Period fields.

    A Tickler is a friendly reminder that the key date is coming due.

    The system will automatically calculate the value in the Tickler Last Notice Date using this formula:

    Tickler Last Notice Date = Notice End Date - Tickler Period

    However, the Tickler Last Notice Date will not automatically update after being initially calculated unless you click Save.

18. Enter any comments in the Comments field.

19. Select the covenant that this term is associated with from the Covenant field.

    You can view information about a covenant by selecting a covenant from the field and then clicking the View .

20. Enter the section of the covenant that this term is associated with in the Section field.

21. If this term is associated with an amendment, select the amendment from the Amendment field.

    You can view information about an amendment by selecting an amendment from the field and then clicking the View .

22. Click Save Changes.

    This displays in the Actions menu on the right side of the page.

    The page refreshes. The term appears in the Contract Terms List at the top of the Terms page.

To edit a term:

1. Select the term you want to edit from the Contract Terms List at the top of the Terms page.

   The term’s data populates in the fields on the page.

2. Make your changes.

3. Click Save Changes.

   This displays in the Actions menu on the right side of the page.

   The page refreshes. Your changes are saved.

To delete a term:

1. Select the term you want to delete from the Contract Terms List at the top of the Terms page.

2. The term’s data populates in the fields on the page.

3. Click Delete Item.

   This displays in the Actions menu on the right side of the page.

   A dialog opens, asking you to confirm your choice.

4. Click Yes.

   The term is deleted. It no longer appears in the Contract Terms List.

These procedures can also be performed from the Key Dates page.

To take action on a term:

1. Select the term you want to take action on from the Contract Terms List.

   The details of the term populate on the page.

2. Select the Notice Sent check box if notice has been sent for this action.

3. Select the Notice Received check box if the notice has been received for this action.

4. Select the action you took from the Action field.

5. Enter the date you took action in the Action Date field.

   You can also click Calendar to open the Date Picker and select the appropriate date.

6. Select the Action Complete check box if the action has been completed.

   Important!

   The system will continue to send email alerts and system notifications about the End Date, Notice End Date, and Tickler Date until the Action Complete check box is selected.

7. Enter any comments in the Comments field.

8. Click Save Changes.

   This displays in the Actions menu on the right side of the page.

   The page refreshes. Your changes are saved.

Lucernex can automatically extend your contract dates when you exercise a term.

To exercise a term:

1. Select the term you want to exercise from the Contract Terms List.

   The details of the term populate on the page.

2. Select Exercised from the Status field.

3. Click Save Changes.

   This displays in the Actions menu on the right side of the page.

   A window opens, with a message asking if you'd like to extend your contract.

4. If you want to extend your contract:

   1. Select the date you want to extend your payments to in the Date to Extend the Payment field.

      The system will update the Contract Payment End Date. The system also updates the End Dates of the following record types:

      • Expense Schedules

      • Expense Allocations

      • Vendor Allocations

      • Percentage Rent

      • Percentage Rent Breakpoints

      • Sales Exclusions

      • Sales Exclusion Caps

      • Percentage Rent Offsets

      • Accrual Schedules

      The system will also recalculate payment amounts for the following record types:

      • Expense Schedules

      • Accrual Schedules

      • Scheduled Offsets

      • Alternate Rent Schedules (RE Contracts only)

   2. Select the Extend Contract Expiration Date, Possession Date, and Obligation Date check box if you also want to extend those dates.

   3. Click Extend Contract.

      The contract is extended.

To create a transaction:

1. Navigate to Contract > Abstract Info > Terms.

2. Select the term that you want to use for your transaction.

3. Click RE Transaction Wizard.

   This displays in the Actions menu on the right side of the page.

4. Complete these fields:

   • Scenario Name

   • Deal Type

   • Use Existing RE Transaction?: Select this check box if you want to use this term to create a scenario on a preexisting transaction.

5. Do one of the following:

   • If you selected the Use Existing RE Transaction check box, select the check box next to the RE transaction you want to use.

   • If you did not select the Use Existing RE Transaction check box, enter a name for the transaction in the Transaction Name field.

6. Click Create RE Transaction.