There are some attributes that you can apply to any lease. The general lease attributes are as follows:
Operating Unit
Each lease is created for a specific operating unit. Once you save a lease, you cannot change the operating unit, even if the lease has an approval status of Draft. Note that you can associate term templates, locations, or master leases (in case of a sublease) with the lease only if they belong to the same operating unit.
Type of Lease
The lease type describes how the rental amount is calculated. Three common types of leases are the gross lease, the net lease, and the percentage lease. The lease type is for informational purposes only and does not affect functionality.
The lease type is a user-defined lookup that describes how the rental amount is calculated. Common lease types are:
• Gross lease: The lessee (tenant) pays a fixed rent. The lessor (landlord) pays other expenses, including taxes, insurance, and operating expenses. Most residential and commercial office leases are gross leases.
• Net lease: The lessee pays the rent as well as some or all of the operating costs, including maintenance, taxes, insurance, and utilities. Most residential ground leases and commercial building leases are net leases.
Abstracted By
The name of the person who enters lease information in Property Manager.
Lease Class
The lease class indicates your role as it is defined in the lease you are abstracting. In each lease you can have one of two possible lease roles: tenant or landlord. The lease class that you select also determines whether you will use the Payments feature or the Billings feature. See: Payments and Billings Overview, page 4-31.
• Choose the Expense lease class if you are the tenant in the lease. The Expense lease class enables the Payments feature, which is used by tenants to make payments to landlords and suppliers. The location to which the lease is assigned must have a tenure of Mixed, Managed, Leased, or Owned.
• Choose the Revenue lease class if you are the landlord in the lease. The Revenue lease class enables the Billings feature, which is used by landlords to bill tenants and customers. The location to which the lease is assigned must have a tenure of Mixed, Managed, or Owned.
• Choose the Sublease lease class if you are subleasing the property to a subtenant.
The Sublease lease class, like the Revenue lease class, enables the Billings feature.
You can have more than one sublease for the same location. The second sublease (sub-sublease). A sub-sublease has a lease class of Sublease, and has both a primary lease and an over lease (sublease) associated with it. Therefore, a sub-sublease can have a sublease associated with it.
Note: Depending on the setting of the Default Landlord/Tenant View system option, the default value of Lease Class will be either Revenue or Expense. See Defining Property Manager System Options, Oracle Property Manager Implementation Guide.
Master Lease Name
A Master Lease is a lease that you have previously abstracted in Oracle Property Manager. It covers the same property that is covered by the lease you are currently subleasing. In the Master Lease, however, your role is that of tenant, while in the current lease, your role is that of landlord. You designate a master lease only if you are subleasing the property to a subtenant. To do this, you must choose Sublease as the Lease Class.
Note: When you choose the Sublease class and enter the name of a Master Lease, you are a party to two leases. In one lease your role is tenant, and in the other lease your role is lessor. You enter the expense lease into Oracle Property Manager first, then enter the revenue lease.
When you do this, the expense lease becomes the master lease in reference to the revenue lease.
Approval Status of Lease
A lease can have either Draft or Final approval status. The approval status of the lease determines what actions you can take regarding two areas of the lease abstraction process: making changes to the lease, and generating payments and billings.
• Changes to the lease: If the lease is in draft status, you can modify, delete, or add to the existing lease information. If the lease is in final status, you cannot make changes to the lease unless you perform an edit or create a lease amendment.
• Payment and billing schedules: When you enter payment or billing terms in the Leases window and change the lease approval status from Draft to Final, you initiate the process that creates scheduled payments or scheduled billings. See Approval Rules for Schedules, page 4-41.
Lease Statuses
The lease status describes the position of the lease in the lease life cycle. Oracle Property Manager provides the following lease statuses:
• Active: Signifies that the lease is within the agreed lease term.
• Holdover: Signifies that the tenant retains possession of leased property after the lease expires. The landlord, by accepting rent, agrees to the tenant's continued occupancy.
• Lease Ordered: Signifies that the landlord and tenant have committed to the general terms of a lease. However, they have not finalized the lease because of certain open issues. You can make or receive one time non-normalized payments, such as security deposits.
• Month-to-Month: Signifies that the tenant leases the property for one month at a time. You can create a new lease in this status. However, this status is used most commonly when a lease expires and the landlord and tenant have not finalized a new agreement to continue the tenancy.
• Signed: Signifies that the landlord and tenant have signed the lease. However, certain pending issues may prevent you from finalizing the lease. As in the case of the Lease Ordered status, you can make or receive one time non-normalized rent payments.
• Terminated: Signifies that the lease agreement has ended.
Using the Lease Ordered and Signed Lease Statuses
Use the Lease Ordered (LOF) and Signed (SGN) lease statuses to schedule payments or billings and transfer transactions to Oracle Payables or Oracle Receivables before you finalize the lease. To finalize the lease, you must also change the Approval Status of the lease.
When you save a lease with a status of LOF or SGN, Oracle Property Manager creates schedules and items for all one-time non-normalized terms.
Note: Accounting guidelines state that you cannot normalize payment or billing terms until you finalize a lease. Accordingly, Oracle Property Manager does not normalize terms while a lease is in SGN or LOF lease status.
Oracle Property Manager runs the Schedules and Items concurrent program each time you create one-time payment or billing terms. After you save your work, the limitations for modifying terms in a finalized lease apply to modifying these one-time lease terms.
See Lease Modifications, Oracle Property Manager User Guide.
In other respects, the lease functions as a draft lease. Therefore, you can freely edit other lease attributes, including the lease commencement date and the attributes of the other lease terms.
Important: If you change the lease commencement date, Oracle Property Manager does not automatically change the dates for any of the lease terms.
Using the Month-to-Month and Holdover Lease Statuses
Use the Month-to-Month (MTM) and Holdover (HLD) lease statuses to extend a lease on a monthly basis. When you create a new lease in MTM or HLD lease status or move a draft lease to one of these leases statuses, you specify a lease termination date. When you finalize the lease, Oracle Property Manager uses this date as the extension end date.
Note that you must denormalize all normalized terms before changing the lease status.