Real Estate: Adjustment of Conditions

This Business Scenario Map shows how the real estate manager performs the adjustment of conditions process. Interaction takes place between the tenant occupying the space and the real estate manager, who rents the space to the tenant. Activities include concluding a lease with a tenant, entering adjustment parameters, performing the condition adjustment, generating correspondence, activating new condition values and carrying out financial postings based on these values. You use the adjustment of conditions process to make calculated changes to condition amounts that are charged for the rental or services of real estate objects. The result is a more accurate and timely condition adjustment, saving both time and money, improving operational efficiency.

Show Document Flow

Business Benefits

Information transparency

Receive accurate & timely adjustments

Documented administration procedures

Tenant

Real Estate Manager

Confirm condition adjustment amount

Sign contract

Create contract & define adjustment rules

Simulate possible adjustments

Communicate calculated condition adjustment

Enter approval (if applicable)

Activate adjustment

Make periodic posting with new condition amounts

Generate follow-up postings

Business Benefits

Accurate mapping & recording of lease

Seamless integration

Efficient date tracking

Standard adjustment processing based on pre-defined rules

Optimize rent revenue

End-to-end processing


Real Estate: Adjustment of Conditions This Business Scenario Map outlines the main steps involved in the condition adjustment process. It shows the interaction between the tenant and the real estate manager, and demonstrates how the real estate manager can adjust condition amounts charged to the tenant using the adjustment of conditions process. The tenant rents space from the real estate manager. The real estate manager maps all contractual information in the system and is able to perform the adjustment process based on this information. By defining the adjustment rules and terms in the contract at the time of contract conclusion the actual adjustment is an automated procedure. The real estate manager can adjust the conditions of one particular contract, or all contracts he is responsible for at one time (mass processing). SAP Real Estate Management supports the adjustment of conditions in contracts and rental objects according to a number of adjustment methods. These include: Free adjustment (percentage or absolute value) Index adjustment (e.g. Consumer Price Index - CPI) Sales-based rent adjustment Adjustment of operating cost advance payments in Service Charge Settlement Adjustment methods for residential market (Germany) Adjustment rules are defined and assigned to the relevant conditions in the contract at the time of contract creation. A combination of adjustment methods can be used in one contract. Date and deadline management functions trigger timely adjustment processing. The adjustment method determines how often and when the adjustment is carried out. The real estate manager simulates the adjustments and correspondence is generated to inform the tenant of any forthcoming changes. Condition amounts are adjusted according to the adjustment method. In the case of free adjustment, condition amounts may be increased or decreased according to a percentage or an absolute value. If the condition is to be adjusted using the index adjustment method, the condition change is dependent on the change in the index values that the condition refers to. Depending on the adjustment method used, the tenant's approval may be required. The calculated values are activated and the new condition amounts are updated in the contract. Additional features such as rent capping, pass-on percentage the possibility to reverse an entire adjustment run, or individual adjustment records are also available. The periodic posting run is carried out and the tenant is debited the new condition amounts. You are also able to control the validity of the adjustment calculated by means of a temporary adjustment delay. Should adjustments be valid for a date in the past, follow-up postings are generated due to retroactive condition changes. The system automatically copies the date of the original transaction and the tenant is debited the correct amount. The result is more accurate and timely condition adjustment, saving both time and money, improving operational efficiency.