NetLease - Renewal Setup
Overview
Lease agreements often include optional renewal clauses. NetLease enables users to track these provisions and process renewals either manually or automatically.
Prerequisites
- Navigate to NetLease > NetLease Setup > System Setup, and under the Renewal Settings section, ensure the Automated Renewal field is set to the desired option:
- Not Enabled: Disables the Automated Renewal functionality.
- Pending Review: Renewal options are automatically created but remain unprocessed, allowing for review before manual processing.
- Automatically Processed: The system automatically processes renewal records after the final period’s amortization has run.
Step-by-Step Process
- On the relevant NetLease Lease record, go to the Renewals subtab.
- Select a Default Renewal Type from the dropdown menu. There are three renewal options:
- Auto-Renewal: Creates renewal options with a Scheduled status and checks the Auto Renewal checkbox. The system automatically renews the lease when journal entries are processed in the expiration month.
- Month to Month: Functions similarly to Auto-Renewal, setting the renewal option to Scheduled and checking the Auto Renewal checkbox. However, it also sets the Auto Renewal Term field to 1. The renewal is automatically processed when journal entries run in the expiration month.
- Right to Renew: Creates renewal options with an Available status but does not process them automatically. The renewal must be manually executed.
Note that if the Automated Renewal setting in the System Setup is set to Pending Review instead of Automatically Processed, even Auto-Renewal and Month-to-Month renewal types will not process automatically.
- Next, specify the Auto Renewal Term and Total Renewals fields:
- Auto Renewal Term: Defines the expected length of the lease extension in whole months.
- Total Renewals: Indicates the number of times the lease can be renewed, determining the total number of renewal options available.
- Populating the Auto Renewal Term and Total Renewals will automatically populate the Final Renewal End Date field and create the renewal option records in the sublist:
Additional Notes
- The system assumes the first renewal’s start date will be the month following the lease record’s end date. If a different start date is needed, it can be adjusted using the Renewal Start Date field.
- Renewal options can be manually added by entering details in the sublist columns and clicking Add. Similarly, existing renewals can be edited by selecting a row, making changes, and clicking Ok.
- To clear all populated data in the sublist, use the Reset button in the top-left corner.
- After entering all required information, click Save on the lease record.
- If payment amounts need to be adjusted as part of a renewal, they can be managed by updating the system-generated Contract Provision records in the following way:
- Navigate to the Renewals tab on the lease record and click View on the relevant Contract Provision:
- On the next screen, click Edit.
- Update the payment details as needed:
- For a single update effective at the start of the renewal period, use the New Payment Amount and Payment Frequency fields.
- For multiple payment uplifts within the renewal period, add them under the Payments subtab.
- Once all updates have been entered, click Save. The new payment details will be reflected in the schedule automatically when the renewal is processed.
- Navigate to the Renewals tab on the lease record and click View on the relevant Contract Provision:
Next Steps
- Learn more about how renewals are processed in the Renewal Processing article.