Real estate abstract
The invention provides a system and method that facilitates a structured
lease negotiation between two parties to a real estate transaction,
and subsequent steps to occupy the leased premises and evaluate
the transaction process. A series of predefined milestone negotiation
steps are executed on a computer that couples two parties through
a network, such as the Internet. The negotiators use a web browser
to answer predefined questions regarding a proposed transaction
in such a manner that certain aspects of the transaction can be
agreed upon early during the negotiation process while others are
deferred to later phases. In each phase, each party must select
from a predefined list of actions (e.g., agree, defer, identify,
mediate, etc.) associated with a particular aspect of the negotiation
(e.g., rent to be charged, term of the lease, etc.). Tools are provided
to facilitate transnational aspects of the negotiation (e.g., conversion
between currencies, metrics, or languages). Third-party service
providers such as brokers and architects can be automatically pulled
into the negotiations using computer-issued requests for services.
Feedback from the parties in the form of problems encountered and
solutions achieved during the negotiation process are collected
and stored in a database for review and use by other future negotiation
parties.
Real estate claims
The invention claimed is:
1. A computer-assisted method of negotiating a real estate lease
transaction, comprising the steps of: (1) displaying on a computer
screen a plurality of lease provisions and a plurality of predefined
actions associated with each lease provision, wherein the plurality
of lease provisions are associated with a first phase of a lease
negotiation; (2) for each of a plurality of negotiators to the lease
transaction, selecting one of the plurality of predefined actions
associated with each lease provision; and (3) for each lease provision,
determining whether each of the plurality of negotiators has selected
the same associated predefined action and, if so, storing in the
computer an indication of the associated lease provision as an agreed
provision and, if not, deferring non-agreed lease provisions to
a later phase of the lease negotiation.
2. The computer-assisted method of claim 1, wherein step (2) comprises
the step of selecting either an AGREE choice or a DEFER choice for
each lease provision.
3. The computer-assisted method of claim 1, wherein steps (1) and
(2) are performed at a prospective tenant's computer during a first
time period, and wherein steps (1) and (2) are performed at a prospective
landlord's computer during a second time period.
4. The computer-assisted method of claim 1, wherein step (2) further
comprises the step of receiving from at least one of the negotiators
a numerical value pertaining to at least one of the lease provisions.
5. The computer-assisted method of claim 4, further comprising
the step of converting in the computer the numerical value from
a first unit of measure to a second unit of measure and displaying
the second unit of measure.
6. The computer-assisted method of claim 4, further comprising
the step of converting in the computer the numerical value from
a first unit of currency to a second unit of currency and displaying
the second unit of currency.
7. The computer-assisted method of claim 1, further comprising
the step of selecting a third-party service provider from a computer
database, wherein the third-party service provider is selected from
a geographic area to which the lease pertains.
8. The computer-assisted method of claim 7, further comprising
the step of electronically transmitting to the third-party service
provider a request for services pre-populated with information pertaining
to the lease negotiation.
9. The computer-assisted method of claim 8, wherein the third-party
service provider is an architect, and wherein the electronically
transmitted request pertains to a floor plan for the lease.
10. The computer-assisted method of claim 1, further comprising
the step of completing an evaluation form for the negotiation and
generating a report based on the evaluation form.
11. The computer-assisted method of claim 1, further comprising
the step of: (4) in the later negotiation phase, resolving lease
provisions that were deferred from the first negotiation phase.
12. The computer-assisted method of claim 1, further comprising
a step of automatically generating an intermediate document that
summarizes points of agreement in the negotiation.
13. The computer-assisted method of claim 1, wherein steps (1)
and (2) are performed over the Internet using web browsers by negotiators
located at two different locations.
14. A system that facilitates the negotiation of a real estate
lease between a tenant and a landlord, comprising a computer system
programmed with software that generates a display of a plurality
of lease provisions and a plurality of predefined actions associated
with each lease provision, wherein the plurality of lease provisions
are associated with a first phase of a lease negotiation; wherein
the software receives choices from the tenant and the landlord for
each lease provision pertaining to one of the predefined actions
and, for each lease provision, determines whether the tenant and
landlord have indicated agreement and, if so, stores in the computer
an indication of the agreed lease provisions and, if not, defers
non-agreed lease provisions to a later phase of the lease negotiation.
15. The system of claim 14, wherein the software receives choices
from the tenant located at a first computer during a first time
period and receives choices from the landlord located at a second
computer during a second time period.
16. The system of claim 14, wherein the software converts a numerical
value relating to one of the lease provisions from a first unit
of measure to a second unit of measure.
17. The system of claim 14, wherein the software converts a numerical
value relating to one of the lease provisions from a first unit
of currency to a second unit of currency.
18. The system of claim 14, wherein the software suggests a third-party
service provider from a computer database based on the geographic
area of the lease.
19. The system of claim 18, wherein the software electronically
transmits to the third-party service provider a request for services
pre-populated with information pertaining to the lease negotiation.
20. The system of claim 14, wherein the software receives evaluation
information from the tenant and the landlord and generates a report
based on the evaluation information.
21. The system of claim 14, wherein the software prompts the tenant
and landlord to resolve in a later negotiation phase lease provisions
that were deferred from an earlier phase.
22. The system of claim 14, wherein the software automatically
generates an intermediate document that summarizes points of agreement
in the negotiation.
23. A computer-assisted method of negotiating a real estate lease,
comprising the steps of: (1) displaying on a first computer display
device a plurality of lease provisions and a plurality of predefined
actions associated with each lease provision, and receiving from
a first party information selecting one of the predefined actions
for each lease provision; (2) displaying on a second computer display
device the plurality of lease provisions and the plurality of predefined
actions associated with each lease provision, and receiving from
a second party information selecting one of the predefined actions
for each lease provision; (3) determining those lease provisions
for which the first and second parties have selected the same predefined
action; and (4) for those lease provisions for which the first and
second parties have not selected the same predefined action, assisting
the first and second parties in reaching agreement.
24. The method of claim 23, wherein step (4) comprises the step
of generating a request for services from a local service provider.
25. The method of claim 23, further comprising the step of converting
a value associated with one of the lease provisions from a first
unit of measure to a second unit of measure and displaying the second
unit of measure.
26. The method of claim 23, wherein step (4) comprises the step
of suggesting a value for a lease provision that is a compromise
between a value offered by the first party and a value offered by
the second party.
27. The method of claim 23, further comprising the step of preventing
the first party and the second party from modifying any lease provision
for which the parties have selected the same predefined action.
28. A computer-implemented method of generating a report reflecting
difficulties encountered during a computer-assisted lease negotiation,
comprising the steps of: (1) displaying on a first computer display
device a plurality of lease provisions and a plurality of predefined
actions associated with each lease provision, and receiving from
a first party information selecting one of the predefined actions
for each lease provision; (2) displaying on a second computer display
device the plurality of lease provisions and the plurality of predefined
actions associated with each lease provision, and receiving from
a second party information selecting one of the predefined actions
for each lease provision; (3) negotiating between the first and
second parties to reach agreement on at least one of the lease provisions
for which the first and second party did not reach agreement; (4)
receiving from each party an evaluation form including information
relating to the lease negotiation process; and (5) generating a
report including information received from the evaluation form.
29. A computer-assisted method of negotiating a real estate agreement,
comprising the steps of: (1) displaying on a computer screen a plurality
of predefined real estate agreement provisions each relating to
one aspect of a potential real estate agreement, each provision
having an associated displayed choice including at least an agreement
choice and a deferral choice; (2) for each of a plurality of negotiators
to the real estate agreement, detecting each negotiator's computer
selection of one of the plurality of displayed choices for each
of the predefined real estate agreement provisions; (3) for each
predefined real estate agreement provision, determining whether
each of the plurality of negotiators has selected the same displayed
choice and, for each such same choice, storing in a computer an
indication of agreement regarding the associated agreement provision.
30. The computer-assisted method of claim 29, wherein each of the
predefined real estate agreement provisions relates to a real estate
lease provision.
31. The computer-assisted method of claim 29, wherein step (1)
comprises the step of displaying the predefined real estate agreement
provisions grouped into distinct negotiation phases.
32. The computer-assisted method of claim 29, wherein step (1)
is performed on two computers each located at a different geographic
location, wherein each negotiator selects choices during different
time periods.
33. The computer-assisted method of claim 29, wherein steps (1)
to (3) are performed during a first negotiation period, and further
comprising the steps of: (4) during a later negotiation period,
re-displaying real estate agreement provisions for which agreement
was not reached during the first negotiation period, and repeating
steps (2) and (3) for all such provisions.
34. The computer-assisted method of claim 29, wherein step (1)
comprises the step of displaying each of the plurality of real estate
agreement provisions simultaneously on a single computer screen.
35. The computer-assisted method of claim 29, wherein step (1)
comprises the step of displaying each of the plurality of real estate
agreement provisions successively on separate computer screens.
36. A computer programmed with computer software that carries out
steps (1) to (3) of claim 35.
37. A computer-assisted method of negotiating an agreement over
a computer network, comprising the steps of: (1) displaying on a
first computer screen a plurality of predefined agreement provisions
each relating to one aspect of a potential agreement, each provision
having an associated displayed choice including at least an agreement
choice and a deferral choice; (2) detecting a first negotiator's
computer selection of one of the plurality of displayed choices
for each of the predefined agreement provisions; (3) displaying
on a second computer screen the plurality of predefined agreement
provisions displayed on the first computer screen and a second plurality
of associated displayed choices including at least an agreement
choice and a deferral choice; (4) detecting a second negotiator's
computer selection of one of the plurality of displayed choices
displayed on the second computer screen; (5) determining whether
the first and second negotiators have selected a same displayed
choice for each predefined agreement provision and, for each such
same choice, storing in a computer memory an indication of agreement
regarding the associated agreement provision.
38. The computer-assisted method of claim 37, wherein step (1)
comprises the step of displaying the predefined agreement provisions
grouped into distinct negotiation phases.
39. The computer-assisted method of claim 37, wherein step (3)
comprises the step of further displaying on the second computer
screen one or more computer selections made by the first negotiator.
40. The computer-assisted method of claim 37, wherein step (1)
is performed on two computers each located at a different geographic
location, wherein each negotiator selects choices during different
time periods.
41. The computer-assisted method of claim 37, wherein steps (1)
to (4) are performed during a first negotiation period, and further
comprising the steps of: (6) during a later negotiation period,
re-displaying agreement provisions for which agreement was not reached
during the first negotiation period, and repeating steps (1) through
(4) for all such provisions.
42. The computer-assisted method of claim 37, wherein step (2)
comprises the step of receiving a first ancillary value from the
first negotiator representing a first proposed contract value corresponding
to one of the predefined agreement provisions; wherein step (4)
comprises the step of receiving a second ancillary value from the
second negotiator representing a second proposed contract value
corresponding to one of the predefined agreement provisions; wherein
the method further comprises the step of: (6) if the first ancillary
value and the second ancillary value are different, generating a
message identifying a discrepancy.
43. The computer-assisted method of claim 37, wherein step (2)
comprises the step of receiving a first ancillary value from the
first negotiator representing a first proposed contract value corresponding
to one of the predefined agreement provisions; wherein step (4)
comprises the step of receiving a second ancillary value from the
second negotiator representing a second proposed contract value
corresponding to one of the predefined agreement provisions; wherein
the method further comprises the step of: (6) if the first ancillary
value and the second ancillary value are different, proposing a
third ancillary value representing a compromise between the first
ancillary value and the second ancillary value.
44. A computer readable medium storing computer readable instructions
that, when executed by a processor, cause a computer to perform
steps (1) to (3) of claim 29.
45. A computer-readable medium comprising computer instructions
that, when executed by a computer, perform the steps of: (1) displaying
on a first computer display device a plurality of lease provisions
and a plurality of predefined actions associated with each lease
provision, and receiving from a first party information selecting
one of the predefined actions for each lease provision; (2) displaying
on a second computer display device the plurality of lease provisions
and the plurality of predefined actions associated with each lease
provision, and receiving from a second party information selecting
one of the predefined actions for each lease provision; (3) determining
those lease provisions for which the first and second parties have
selected the same predefined action; and (4) for those lease provisions
for which the first and second parties have not selected the same
predefined action, assisting the first and second parties in reaching
agreement.
46. A computer programmed with computer software that carries out
steps of: (1) displaying on a first computer screen a plurality
of predefined agreement provisions each relating to one aspect of
a potential agreement, each provision having an associated displayed
choice including at least an agreement choice and a deferral choice;
(2) detecting a first negotiator's computer selection of one of
the plurality of displayed choices for each of the predefined agreement
provisions; (3) displaying on a second computer screen the plurality
of predefined agreement provisions displayed on the first computer
screen and a second plurality of associated displayed choices including
at least an agreement choice and a deferral choice; (4) detecting
a second negotiator's computer selection of one of the plurality
of displayed choices displayed on the second computer screen; (5)
determining whether the first and second negotiators have selected
a same displayed choice for each predefined agreement provision
and, for each such same choice, storing in a computer memory an
indication of agreement regarding the associated agreement provision.
47. A computer readable medium storing computer readable instructions
that, when executed by a processor, cause a computer to perform
steps of: (1) displaying on a first computer screen a plurality
of predefined agreement provisions each relating to one aspect of
a potential agreement, each provision having an associated displayed
choice including at least an agreement choice and a deferral choice;
(2) detecting a first negotiator's computer selection of one of
the plurality of displayed choices for each of the predefined agreement
provisions; (3) displaying on a second computer screen the plurality
of predefined agreement provisions displayed on the first computer
screen and a second plurality of associated displayed choices including
at least an agreement choice and a deferral choice; (4) detecting
a second negotiator's computer selection of one of the plurality
of displayed choices displayed on the second computer screen; (5)
determining whether the first and second negotiators have selected
a same displayed choice for each predefined agreement provision
and, for each such same choice, storing in a computer memory an
indication of agreement regarding the associated agreement provision.
48. A computer-assisted method of negotiating a real estate lease
transaction, comprising the steps of: (1) displaying on a computer
screen a plurality of lease provisions and a plurality of predefined
actions associated with each lease provision, wherein the plurality
of lease provisions are associated with a first phase of a lease
negotiation and wherein the plurality of predefined actions comprise
an AGREE choice and a DEFER choice for each lease provision; (2)
for each of a plurality of negotiators to the lease transaction,
selecting either the AGREE choice or the DEFER choice for each lease
provision; and (3) for each lease provision, determining whether
each of the plurality of negotiators has selected the same associated
predefined action and, if so, storing in the computer an indication
of the associated lease provision as an agreed provision and, if
not, deferring non-agreed lease provisions to a later phase of the
lease negotiation.
49. A computer-assisted method of negotiating a real estate agreement,
comprising the steps of: (1) in a first phase of a multiphase transaction
wherein phases comprise predefined actions, displaying on a computer
screen a plurality of predefined real estate agreement provisions
each relating to one aspect of a potential real estate agreement,
each provision having its own set of predefined actions associated
and displayed therewith, each set of predefined actions including
at least an agreement choice and a deferral choice; (2) for each
of a plurality of negotiators to the real estate agreement, detecting
each negotiator's computer input representative of its selection
of one of the predefined actions for each of the predefined real
estate agreement provisions; (3) for each predefined real estate
agreement provision, determining whether each of the plurality of
negotiators has selected the agreement choice and, when each of
the plurality of negotiators has selected the agreement choice,
storing in a computer an indication of agreement regarding the associated
agreement provision.
50. A computer-assisted method of negotiating a real estate agreement,
comprising the steps of: (1) in a first phase of a multiphase transaction
wherein each phase prescribes a predefined structure and sequence
of questions to be answered, displaying on a computer screen a plurality
of predefined real estate agreement provisions each relating to
one aspect of a potential real estate agreement, each provision
having its own set of predefined actions associated and displayed
therewith, each set of predefined actions including at least an
agreement choice and a deferral choice; (2) for each of a plurality
of negotiators to the real estate agreement, detecting each negotiator's
computer input representative of its selection of one of the predefined
actions for each of the predefined real estate agreement provisions;
(3) for each predefined real estate agreement provision, determining
whether each of the plurality of negotiators has selected the agreement
choice and, when each of the plurality of negotiators has selected
the agreement choice, storing in a computer an indication of agreement
regarding the associated agreement provision.
51. The computer assisted method of claim 50, wherein the predefined
structure and sequence of questions for the first phase is different
than the predefined structure and sequence of questions for a second
phase.
52. The computer assisted method of claim 50, further comprising
the step of automatically generating a legal document based on agreements
reached by the negotiators.
53. A computer-assisted method of negotiating a real estate lease,
comprising the steps of: (1) outputting for display on a computer
screen a plurality of lease criteria including: a. an amount of
currency to be paid per predefined period during the lease, b. an
amount of square footage to be leased, c. a beginning date of the
lease, and d. a term of the lease; and (2) displaying a plurality
of predefined actions associated with a first phase of a lease negotiation
including, for each lease criteria: a. an AGREE choice and a DEFER
choice to be selected by a landlord negotiator, and b. an AGREE
choice and a DEFER choice to be selected by a tenant negotiator;
(3) receiving input from the landlord negotiator and the tenant
negotiator each selecting either the AGREE choice or the DEFER choice
for each lease criteria; (4) for each lease criteria, determining
whether each of the plurality of negotiators has selected the AGREE
choice and, if so, storing in the computer an indication of the
associated lease criteria as an agreed provision and, if not, deferring
non-agreed lease criteria to a later phase of the lease negotiation;
and (5) when requested by user input, generating for display a summary
document comprising agreed provisions.
54. The computer-assisted method of claim 53, wherein step (1)
further comprises displaying an input box corresponding to one of
the lease provisions, wherein a negotiator enters comments corresponding
to the lease provision in the input box.
Real estate description
BACKGROUND OF THE INVENTION
1. Technical Field
This invention relates generally to electronic commerce and the
Internet. More particularly, the invention provides a method and
apparatus for allowing two parties to negotiate and execute a real
estate lease over a computer network such as the Internet.
2. Related Information
Corporations frequently need to lease real estate in the form of
offices, laboratories, warehouses, and other spaces. Alternatively,
companies sometimes have surplus office space that could be sublet
to tenants for profit or cost recovery.
Typically, companies will hire real estate brokers to search for
and conduct preliminary negotiations regarding potential leasing
arrangements. After preliminary details have been worked out, lawyers
acting behalf of the prospective landlords and tenants negotiate
a detailed lease agreement. This process may involve numerous meetings,
telephone calls, faxes, exchanges of draft documents, and the like.
It also may involve various middlemen in addition to lawyers and
real estate brokers. For example, if architectural or mechanical
improvements are needed, one or both of the parties may hire outside
contractors (e.g., architects or engineers) to assist in evaluation
of lease properties and/or to propose modifications to the property.
Because of human nature and the typically unstructured methods
by which leases are negotiated, parties sometimes backtrack on previously
agreed-upon provisions or demand changes to lease provisions that
were previously believed to be the subject of agreement. Parties
may spend a large amount of time negotiating details of lease provisions
that later become moot (e.g., the leasehold improvements to the
premises) because of disagreements over other provisions (e.g.,
term of the lease). Consequently, acquiring or leasing real estate
in the corporate market incurs large costs and time because of intermediaries
and human interaction required to negotiate lease provisions.
Various web-based listing services have sprung up in recent years
to service the real estate needs of companies looking for space,
including sales, leases, and auctions. Companies such as Loopnet,
PropertyFirst, and EGPropertyLink provide brokerage and listing
services in an attempt to facilitate real estate transactions over
the Internet. These services primarily focus on listing properties,
and do little to facilitate the negotiation or consummation of real
estate deals. In particular, these services do not provide process
management tools to guide landlords and tenants through a structured
deal. Furthermore, they do not provide a mechanism for monitoring
progress of a transaction after signature of the lease (e.g., completion
of works by landlord and tenant), nor do they provide any mechanism
to integrate into the process an evaluation of qualitative aspects
of the transaction such as cross-border difficulties and delays,
and the effectiveness of local service providers such as brokers
and architects.
The negotiation of real estate leases between parties located in
different countries involves additional inefficiencies and drawbacks.
For example, because of different time zones, the times available
for parties to meet or hold telephone conferences may be limited.
Differences in currencies (e.g., dollars versus Euros) and metrics
(e.g., square feet versus square meters) add complexity to the negotiation
process, thus driving up costs. Language barriers may also add additional
costs.
It may be difficult for a U.S.-based prospective tenant to hire
outside contractors, such as architects, in another country. Furthermore,
the procedures and customs used by foreign real estate brokers and
intermediaries to negotiate a corporate lease may be different depending
on the country, language, and regulations. Legal documents drafted
in one country may look substantially different from those typically
drafted under U.S. laws and customs. These and other differences
have made it very costly to negotiate leases for commercial office
space across international borders.
SUMMARY OF THE INVENTION
The present invention overcomes the aforementioned problems by
providing a method and apparatus that facilitates a structured lease
negotiation between two parties to a real estate transaction. According
to one variation of the method, a series of predefined milestone
negotiation steps are executed on a computer that couples two parties
through a network, such as the Internet. Parties to the transaction
answer predefined questions regarding a proposed transaction in
such a manner that certain aspects of the transaction can be agreed
upon early during the negotiation process while others are deferred
to later phases. Additional steps of completing the lease transaction
can also be included in the inventive method.
In one variation of the invention, the parties answer questions
and exchange information without the simultaneous participation
of each participant, such that a structured negotiation takes place
over a period of time, possibly in different time zones. In each
phase, parties must select from a predefined list of actions (e.g.,
agree or defer) associated with a particular aspect of the negotiation
(e.g., rent to be charged, term of the lease, etc.). Provisions
to which both parties agree are "locked in" while those
that are deferred are worked out in a subsequent phase. Certain
lease provisions may have subsidiary actions (e.g., lower-level
agreements and deferrals) that can then be "rolled up"
to the phase-level negotiation. Tools are provided to facilitate
transnational aspects of the negotiation (e.g., conversion between
currencies, metrics, or languages). A computer generates intermediate
documents that assist in the negotiation (e.g., draft proposal letters)
and identifies areas that require further negotiation.
If parties indicate that outside help is needed to define part
of the contract (e.g., architect review of an office layout), a
computer suggests vendors located in the geographic area of the
lease property and transmits via e-mail a draft scope of services
request to one or more vendors. Each party identifies corporate
approvals required to complete the negotiation, and a computer-generated
lease document can be printed for signatures. Feedback from the
parties in the form of problems encountered and solutions achieved
during the negotiation process are collected and stored in a database
for review and use by other future negotiation parties.
Other features and advantages of the invention will become apparent
with reference to the following detailed description and the figures.
BRIEF DESCRIPTION OF THE DRAWINGS
FIG. 1A shows a system for facilitating a real estate lease transaction
between a prospective tenant and prospective landlord using a computer-driven
structured negotiation technique.
FIG. 1B shows a computer-implemented method for allowing two parties
to negotiate a lease transaction using structured negotiation phases.
FIG. 2 shows a nine-phase computer-assisted process for negotiating
and executing a lease transaction between a tenant and a landlord.
FIG. 3 shows additional details of the first phase.
FIG. 4 shows additional details of the second phase.
FIG. 5 shows additional details of the third phase.
FIG. 6 shows additional details of the fourth phase.
FIG. 7 shows additional details of the fifth phase.
FIG. 8 shows additional details of the sixth phase.
FIG. 9 shows additional details of the seventh phase.
FIG. 10 shows additional details of the eighth phase.
FIG. 11 shows additional details of the ninth phase.
FIG. 12 shows a web-based computer screen presenting top-level
choices for each phase of a nine-phase negotiation and execution
process.
FIG. 13 shows a web-based computer screen in which a prospective
tenant and landlord select predefined choices for lease provisions
in a first phase.
FIG. 14 shows a web-based computer screen for negotiating details
of one lease provision.
FIG. 15 shows a web-based computer screen in which a prospective
tenant and landlord select predefined choices for resolving deferred
lease provisions in a second phase.
FIG. 16 shows a computer-generated lease proposal to be filled
in by one or both of the parties.
FIGS. 17A and 17B show a computer-generated preview of a lease
proposal to be agreed between the parties.
FIG. 18 shows a computer-generated schedule for each phase of a
nine-phase lease negotiation and execution process.
FIGS. 19A and 19B show a computer-generated request for proposal
for a local service provider.
DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS
FIG. 1A shows a system for facilitating a real estate lease transaction
between a tenant and a landlord. Although the terms "landlord"
and "tenant" will be used generally to refer to actual
parties to a lease negotiation, those terms also encompass agents
or others acting on behalf of the ultimate landlord or tenant. It
is also possible that there will be more than one landlord or tenant
to a transaction. It should also be understood that a tenant in
one context could in fact act as a landlord in another context.
For example, a tenant that needs to dispose of part of a leasehold
interest could be considered a landlord in the context of the invention.
A landlord having an existing lease with a tenant may act in concert
with the tenant to sublet the property to another tenant; in that
context, the landlord and original tenant could both be considered
landlords while the prospective new lessee would be the tenant.
In summary, the terms "landlord" and "tenant"
may have a variety of meanings dictated by the particular context.
According to the system of FIG. 1A, a prospective tenant operates
a computer 101 to negotiate a real estate lease with a prospective
landlord, who operates a separate computer 102. The parties negotiate
the lease through a computer 100 that implements a structured transaction.
Computer 100 may comprise a web site that stores and generates web
pages accessible over the Internet to both parties, each of whom
may be located in different countries and time zones. Additionally,
one or more vendor computers 108 may also communicate with computer
100 as described in more detail herein. Alternatively, the functions
associated with computer 100 can be implemented in computer 101
or 102, or a combination of the two computers, such that no physical
third computer is required.
According to one aspect of the invention, each lease is negotiated
using a computer-implemented process that guides the parties through
various negotiation phases. Although the invention will be described
with reference to a nine-phase negotiation and execution process,
the invention is not limited in this respect, and it will be appreciated
that a different number of negotiation phases can be used without
departing from the scope of the invention. Any or all of the steps
described herein can be implemented in software and stored on computer-readable
media for execution in a computer.
In one embodiment, a structured transaction engine 103 controls
the negotiation process by displaying web pages containing predefined
choices for various aspects of the transaction within each negotiation
phase, and by comparing choices made by each party on each web page
to rules stored in a rules database 105. Rules database 105 and
engine 103 can comprise an expert system or other type of knowledge
base that stores information concerning allowable inputs from each
user for each phase. Alternatively, the logic used to control the
operation of the negotiation (and to flag errors or conflicting
information entered by users) can be incorporated into software
using a procedural or object-oriented language.
Structured transaction engine 103 stores information entered by
each party into a lease transaction database 104, which maintains
information concerning each evolving lease negotiation. Multiple
leases may simultaneously be under negotiation at any one time among
different sets of negotiators, such that lease transaction database
104 contains information for different leases in various stages
of negotiation. Vendor database 106 contains information concerning
various third-party vendors (e.g., architects, engineers, lawyers,
interior designers, and the like) and their associated contact information
(e.g., city, country, e-mail address, telephone and fax number).
Document database 107 contains certain standard document templates
that can be used to construct a completed lease and other intermediate
documents based on information provided by the parties during the
negotiation process.
One or more converters 109 provide conversion functions (e.g.,
Euros to dollars, square feet to square meters, and vice versa)
to facilitate the negotiation of particular aspects of each lease.
An e-mail service 110 can also be included to allow parties to a
negotiation to transmit and receive messages, including attachments
such as draft documents, during the negotiation process. Schedule
calculator 111 calculates a proposed schedule corresponding to milestones
during the negotiation and execution phase, based on average actual
lengths of time stored in a database. In one variation, the lengths
of time stored in the database are based on or derived from previously
negotiated contracts (i.e., real-world practice is used to project
future schedules). For example, if over the course of five different
negotiated leases the average amount of time needed to go from generating
a draft lease to moving into the leased property is two months,
the scheduler would use that value to schedule such a milestone
two months before the lease move-in date.
In accordance with one aspect of the invention, the parties answer
questions presented on web pages according to a computer-implemented
transaction sequence, such that the parties can quickly identify
areas of agreement and resolve areas of disagreement in an efficient
manner. The lease negotiation can be conducted across great distances
(e.g., across the Atlantic Ocean) and in different time zones through
the use of a computer network such as the Internet. Because both
parties are forced to conform to a highly structured, well-defined
transaction sequence for negotiation, errors and misunderstandings
can be greatly reduced. Moreover, computer software can be used
to quickly identify areas of agreement and offer alternatives for
resolving areas of disagreement.
FIG. 1B shows a computer-implemented method for negotiating a lease
transaction using structured negotiation phases. As shown generally
in these figures, each party can independently log into a web-based
transaction management system (e.g., computer 100 of FIG. 1A) and
negotiate lease terms by selecting choices from transaction display
screens. In one embodiment, parties are prevented from advancing
to the next negotiation phase unless the computer detects that each
user has either agreed to a specific lease term, or that each user
has elected to defer agreement on a term until a later negotiation
phase.
Each lease provision can be negotiated by taking one of several
predefined actions. In one embodiment, at each top-level negotiation
phase, a party must either AGREE or DEFER on each lease provision
(e.g., by selecting a choice or clicking on an icon representing
a choice). Each of these choices in turn can result in or derive
from lower-level actions by involving lower-level decisions. In
other words, before a party is prepared to AGREE or DEFER on a lease
provision, lower-level decisions involving steps of mediation, issuance
of third-party requests for assistance, or other types of actions
may need to be taken. These lower-level decisions can be reached
using additional computer screens that are linked to one or more
of the higher-level screens.
More generally, the negotiation, execution and evaluation of a
lease can be accomplished according to one aspect of the inventive
principles using a reduced instruction protocol that facilitates
and accelerates milestone decisions associated with the transaction.
Such a protocol provides numerous benefits because, among other
things: (a) The lease transaction process is complex and can involve
numerous participants and, in a cross-border context, these participants
will most likely reside in different countries; (b) There are varying
degrees on skill among the representatives of the landlord and tenant
and, in a cross-border context, varying levels of understanding
of their respective roles and responsibilities; (c) In a cross-border
context, there are language problems, local knowledge gaps and cultural
differences that can slow down negotiations; (d) In a cross-border
context, a computer application for this process functions best
when it prescribes a clear set of top-level decisions (milestones)
with a mechanism for coordinating the roles and actions of those
who participate in reaching these decisions.
One embodiment of the protocol includes the following three elements,
although other embodiments incorporate fewer than all three elements:
1. Decision Protocol
The parties must either agree or defer to all milestone decisions.
This acknowledges that milestones are critical to completing the
project, and that it is important to avoid the dead-end implied
by using the word "no" (which is considered impolite or
is non-existent in some cultures). The computer provides a facility
for either agreeing or deferring on each milestone decision. In
addition, displayed with each milestone decision is a dialogue box
to enter a comment, or an icon to indicate that a comment has been
entered and will be visible on another screen. Predefined actions
in this category include:
Agree: a party acknowledges that a milestone decision has been
reached (e.g., agreement on a specific monthly rent).
Defer: a party agrees to defer a milestone decision to a later
date (e.g., defer a decision on the condition of the premises).
2. Resolution Protocol
Assuming that all milestone decisions must be agreed to complete
the process, an additional mechanism can be used to convert deferrals
into agreements. Therefore, the protocol provides three resolution
mechanisms, including: (a) a user forum; (b) use of a Local Service
Provider (LSP); or (c) mediation. The computer facilitates selection
of LSP's or mediators (via menus of service providers, issuing scopes
of services, etc.), and schedules meetings among the participants
in these decisions. Three corresponding predefined actions in the
resolution protocol category include:
Forum: the transaction parties (i.e., the landlord and tenant)
meet in a structured environment (e.g., scheduled by computer) to
agree on a milestone decision.
LSP: the parties agree to select a third party local service provider
or providers (e.g., an architect) to facilitate reaching a milestone
decision.
Mediate: the parties agree to select a neutral expert to facilitate
reaching a milestone decision.
3. Action Protocol
The computer prescribes a sequence of milestone decisions to complete
the process. For some milestones, additional work must be done to
reach an agreement or deferral. The protocol streamlines this work
into a prescribed set of actions that are required of the participants
(i.e., the landlord, tenant, and LSPs), and which can be undertaken
with computer assistance. The computer acts as an engine to provide
adequate information and resources on the desktop of the landlord
and tenant. Examples include distributing documents such as draft
leases; issuing standardized documents such as Requests For Proposals
(RFPs), specification of leasehold improvements, etc; notifying
parties if any schedule dates have been missed or any input errors
have occurred; and scheduling meetings among the participants.
In addition, the computer can prompt the participants about certain
elements in the process. Examples include prompting the parties
to identify resource persons; prompting the parties to negotiate
certain aspects of tenant's physical environment; and prompting
the parties to obtain signatures to certain documents.
It is anticipated that the computer can provide additional assistance
in the more restricted roles by suggesting various courses of action.
For example, if the parties had not resolved the delivery of the
tenant's space on a "turnkey" basis, the computer could
suggest that the parties agree to split the cost of the improvements
above the landlord's "building standard" on a 50/50 basis.
More generally, the computer can draw upon a library of potential
solutions based on past practice to suggest resolution to certain
milestone decisions or sub decisions. This facility could be visually
displayed alongside any required future action. Examples of predefined
actions in this action category include:
Identify: the computer prompts the parties to locate an appropriate
internal resource person or entity. For example, prompt to identify
authorized signatory for lease.
Issue: the computer issues a standardized document to the parties
or to LSPs. For example, the computer can issue a request for proposals
to one or more architects.
Notify: the computer sends a notice to the parties and/or LSPs
if actions are erroneous or milestones are not completed by the
scheduled dates. For example, the computer can notify the parties
that a scheduled date for signature of lease has been missed.
Obtain: the computer prompts the parties to generate information
from internal resources. For example, the computer can prompt the
parties to obtain approvals for lease.
Provide: the computer prompts the parties as to generally submit
information in support of a milestone decision. For example, the
computer can prompt a party to submit a preliminary cost estimate
for leasehold improvements.
Require: the computer can ask the parties whether they require
standardized documents to assist in reaching milestone decisions.
For example, the computer can ask the parties whether they require
a broker RFP.
Receive: the computer receives and subsequently transmits in a
summary form documents from third parties. For example, the computer
can receive and transmit a response to a broker RFP.
Resolve: the computer prompts the parties or an LSP to reach agreement
on detailed matters related to third party documents. For example,
the computer can prompt parties to resolve outstanding provisions
of lease agreement.
Schedule: the computer arranges meetings in a format chosen by
parties and/or LSPs. For example, the computer can schedule a user
forum to agree on outstanding lease issues.
Send: the computer transmits documents to parties. For example,
the computer can transmit a draft lease to one of the parties or
LSPs.
Select: the computer prompts the parties to make choices among
alternatives provided on a screen or box. For example, a computer
can prompt a party to select a mode for a user forum.
It will be appreciated that the above examples of predefined actions
are exemplary only; different labels or actions can be specified,
and each action can be selected using a pictographic icon or other
means to facilitate communication across languages (e.g., a handshake
icon to signify agreement on a lease provision).
In addition to selecting a pre-defined response such as one selected
from the above choices, each party may also in certain circumstances
enter ancillary information that is associated with and stored with
the response. For example, if one party suggests a delivery date
of October 1 for a leased property (and indicates AGREE for that
date), the other party may instead suggest a delivery date of November
1 for the property. If both parties have selected AGREE but have
entered different values, the computer would flag the discrepancy
and possibly suggest a solution (e.g., split the difference). Alternatively,
a single text entry box could be provided, and each party could
override the other's entry, with the computer flagging any overridden
value (and, in one embodiment, changing the first party's AGREE
choice back to a default value or some other choice).
If both parties select the same response (e.g., one of the responses
selected from the above list), then the agreed status of the particular
lease term is deemed to be "locked in" and not subject
to further negotiation. This is intended to facilitate the negotiation
status by preventing parties from "back-tracking" to items
that were previously the subject of agreement. However, the invention
is not limited in this respect, and certain variations of the invention
include allowing users to change previously matched responses.
Beginning in step 120 of FIG. 1B, the parties independently log
into the system (e.g., using a user name and password). A user can
include a party to the negotiation (e.g., a landlord or tenant),
although it could also include agents or others acting on behalf
of principals to the negotiation. In step 121, if a user is not
recognized, then in step 122, user registration information (e.g.,
name, address, e-mail address, and the like) is obtained. In step
123, a check is made to determine whether the user seeks to negotiate
a new lease or continue negotiating a previously started lease.
If a new lease is selected, then in step 124 a new negotiation
file is established, and each user can select options such as the
currency to use for displaying negotiation information and metrics
(e.g., square feet or square meters). In one variation, a prospective
tenant and landlord can choose to view the information in different
formats, such that the tenant views the rent in dollars and the
landlord views the rent in Euros, for example. Currency and metrics
converters (function 109 in FIG. 1A) are used to automatically convert
between units entered by the users based on currency exchange rates.
In another variation, values are shown simultaneously in two formats
(e.g., square meters and square feet), and the parties can select
what formats are to be displayed (e.g., dollars and Euros simultaneously,
or dollars and French francs simultaneously). It is assumed that
currency exchange information is stored in a database or accessible
over a network such as the Internet.
If negotiations regarding a previously started lease are to be
resumed, then in step 125 computer 100 retrieves previously stored
negotiation information from database 104. In step 126, each user
(i.e., each tenant and landlord) selects a negotiation phase and
enters choices for decisions to be reached during each phase. According
to the invention, each party can log on independently and at different
times to negotiate the lease, so that it is not necessary to have
simultaneous participation by the parties. Of course, it is possible
that the parties might log in at overlapping times, and in such
a case the system can prevent both users from modifying the same
data at the same time (e.g., using file or database locks, for example).
Step 126 can involve subsidiary steps of negotiating particular
aspects of a lease provision before agreement or deferral on the
provision is reached. For example, before a party is prepared to
agree to a lease provision defining the condition of the premises,
several sub-decisions may be involved, such as determining what
types of electrical systems will be provided, what type of security
system is included, etc. These provisions can be negotiated using
lower-level computer screens that invite the user to make selections
based on pre-defined choices. In one embodiment, the computer indicates
to the user that sub-decisions are involved, and prompts the parties
to ensure that such sub-decisions are addressed. Alternatively,
if the tenant has for example agreed to take the premises in "as-is"
condition, these lower-level decisions will be unnecessary, and
the computer can avoid prompting the tenant for these choices.
If in step 127 a user specifies that he or she is done entering
information, then processing advances to step 129. At various points
during the process, each user may optionally choose to generate
one or more intermediate documents (e.g., a draft lease proposal
or the like) depending on the negotiation phase in which the user
is participating (see step 128). Further details of this optional
step are provided below.
In step 129 the computer checks to determine whether all of the
choices selected by the user in the negotiation phase are either
AGREE or DEFER. If so, then in step 130 another check is made to
determine whether the other party has also selected choices for
the particular negotiation phase. If not, then in step 133 an e-mail
message or other notification is transmitted to the other party
inviting that party to review the responses provided by the first
user. If further explanation is required, the computer can provide
a summary of the phase with some frequently asked questions. Additionally,
the computer can provide a comment or dialog box for each phase
to facilitate direct communication between the parties. Processing
then either terminates or returns to a previous step (e.g., step
125 of FIG. 1B).
If in step 130 the other party to the negotiation has also selected
choices for the particular negotiation phase, then in step 131 a
check is made to determine whether all of the choices specified
by the other party are either AGREE or DEFER. If not, then in step
134 an error message is generated and solutions are suggested. For
example, if one party has selected AGREE for a particular lease
provision but the other party has selected DEFER, the computer can
suggest that the agreeing party DEFER the decision until the next
negotiation phase. As another example, if one party has agreed to
$5,000 per month rent but the other party has agreed to $6,000 per
month rent, the computer can flag the discrepancy and suggest a
compromise rent of $5,500 per month.
Alternatively, a single text box can be provided for entering a
value such as rent, thus allowing each party to override the other's
value. In one variation, the computer would then change the choice
of the party whose value was overridden from AGREE to undecided
or some other choice and generate a message indicating that the
first party had changed the value. In yet another embodiment, if
the two parties had agreed on different amounts, the computer would
change both AGREE choices to DEFER, such that the decision would
be deferred to a later negotiation phase.
If in step 131 both parties have selected either AGREE or DEFER
for all lease terms pertaining to the particular negotiation phase,
then in step 132 the agreed terms are deemed "locked in"
by the computer and not subject to further change; all those for
which the parties have indicated DEFER are deferred by the computer
until a later negotiation phase. Thereafter, in step 135 the user
is permitted to advance to the next negotiation phase (e.g., one
of the nine negotiation phases shown in FIG. 2). The previous steps
beginning at step 126 are then repeated for each phase until the
negotiation has been concluded.
Assuming in step 129 that the user did not choose either AGREE
or DEFER for each item in the negotiation phase, then an error message
is generated, and processing returns to step 126. It will be appreciated
that options other than AGREE or DEFER can be provided without departing
from the scope of the invention. Moreover, graphical icons (e.g.,
a handshake symbol instead of an AGREE choice) can be used. Choices
can also be shown in different languages to the different parties,
such that one party to the transaction sees choices in English while
the other party to the negotiation sees the same choices in Spanish,
for example.
FIG. 2 shows a generalized nine phase computer-assisted process
for negotiating, executing, and evaluating a lease transaction according
to one variation of the invention. As explained above, in one embodiment
each party is required to select agreement or deferral of certain
lease provisions before the computer will allow the users to advance
to the next negotiation phase. Selection of other choices for lease
provisions within a negotiation phase may require ancillary communication
(e.g., transmission of requests for services) or processing (e.g.,
submission of information). Web-based computer forms, such as those
shown in FIGS. 13 through 15, can be used to select choices relating
to lease provisions. Certain phases (e.g., 201 through 206) generally
relate to the negotiation of a lease; other phases (e.g., 207 and
208) relate to execution of the lease, and a final phase (209) relates
to evaluation of the completed lease transaction.
As shown in FIG. 2, a first phase 201 includes steps of confirming
a lease proposal and obtaining agreement upon a lease schedule (e.g.,
delivery date). This phase is preferably conducted through the use
of web-based computer display forms having appropriate selection
means (e.g., radio buttons, check boxes, text boxes, pull-down menus
and the like) that allow each user to enter and view information
for the particular phase. Further details of one possible embodiment
are provided below.
A second phase 202 includes steps of resolving outstanding business
issues, wherein users are presented with a checklist of outstanding
issues deferred from the first phase and prompted to develop solutions
to these issues. A third phase 203 includes steps of obtaining agreement
on lease deliverables (e.g., condition of the premises, furnishings,
telecommunication systems, etc.). A fourth phase 204 relates to
defining the tenant environment (e.g., preliminary floor plans,
furniture, etc.). In this phase, the tenant defines his or her requirements
to occupy the premises, including improvements and investments not
provided by the landlord (which are typically included in the third
phase). In the fourth phase, the landlord may or may not be involved
in decisions regarding specification of furniture, network, and
telecommunication systems, for example.
A fifth phase 205 relates to agreement on legal documents, including
a step of generating a draft contract. A sixth phase 206 relates
to obtaining approvals and execution of the lease documents, including
steps of submitting forms for corporate approvals, paying deposits,
etc. A seventh phase 207 relates to completing landlord works (e.g.,
landlord delivers landlord-supplied network system and leasehold
improvements). An eighth phase 208 (completion of tenant works)
includes steps such as delivering tenant-supplied furniture and
telecommunications systems. This may include the use of contractors
such as architects and engineers, and may or may not involve the
landlord.
In the seventh and eighth phases, it is generally contemplated
that the computer will perform a monitoring function of the scheduled
dates for delivery of works as anticipated in the schedule, with
a communication function in the event that scheduled dates are missed
and a function to issue a standardized form for acceptance of works
performed by the landlord and/or LSPs. Turning briefly to FIG. 18,
a computer-generated schedule incorporating the major milestone
phases is shown. In one embodiment, the computer generates such
a schedule by using the lease move-in date as a starting point and
"backing out" dates for earlier milestones using either
default values or values retrieved from a database based on historically
experienced lease transactions. As each date is reached, the computer
can prompt the parties to agree that a particular phase has been
completed, and can transmit a message to each party warning of upcoming
delays if the phase is not completed. Although most milestones can
be assumed to have a linear dependency (e.g., legal documents cannot
be finalized until the lease proposal is agreed), it is also possible
that certain milestone decisions can be deferred until later phases,
such that a schedule slip in one milestone does not necessarily
result in slippage for all remaining milestone decisions.
A final ninth phase (issue best practice report) includes steps
of evaluating local service providers and preparing a best practice
report, which is preferably stored in a database for future reference.
The following description, in conjunction with FIGS. 3 through
11 (details of each negotiation phase) and FIGS. 12 through 15 (computer-implemented
forms that solicit information for each phase), explains one possible
approach for implementing a method and system according to the present
invention. It will be assumed that prior to performing the steps
shown in FIG. 3, a user has logged into the system and, if pertinent,
reviewed e-mail messages in his/her account that were received from
other users, such as another party to the negotiation. It will also
be assumed that a web-based computer display system using well-known
hyperlink technology is used to solicit and display information
between parties, although the invention is not limited in this respect.
Turning first to FIG. 12, a top-level project negotiation phase
selection page is presented to the user after the user logs in and
identifies himself or herself. If a user is beginning a new negotiation,
then a separate computer screen (not shown) is displayed to solicit
information concerning the parties and the subject of the negotiation.
Otherwise, if a previous negotiation has already been started, the
user can enter the project number or name into a text box 1201 and
the system will retrieve previously stored information regarding
the lease. A top-level selection list 1202 contains hyperlinks to
web pages corresponding to each of the nine negotiation phases identified
on FIG. 12 (and also identified in FIG. 2) and would highlight the
current phase that is in negotiation. As an alternative to the hyperlinked
display screens described below, each party can fill out a "short
form" lease proposal of a type shown in FIG. 16, and the computer
can identify any differences between the choices selected by the
two parties and focus on those areas of disagreement.
Although the user can jump directly to any negotiation phase, it
is contemplated that each user will progress sequentially through
the phases, and that users will be prevented from jumping ahead
to later phases until agreement has been reached on lease provisions
in each phase. Assuming that the user has not previously negotiated
any of the lease provisions, the user would click on the first phase
(Confirm Lease Proposal and Agree Schedule), which would cause the
computer to display a screen such as the one shown in FIG. 13.
FIG. 13 shows a web-based computer screen in which a tenant and
landlord select predefined choices for lease provisions according
to a first negotiation phase. This figure will be explained with
reference to FIG. 3, which shows computer-implemented steps that
can be used to negotiate between parties during a first phase of
a lease negotiation. The steps need not be executed in sequential
order as illustrated in FIG. 3. For the sake of simplicity, only
four lease provisions are shown in FIG. 13 even though FIG. 3 shows
9 separate provisions. It should be understood that the illustrated
lease provisions are by no means exhaustive or exclusive.
In general, for each negotiation phase the parties are presented
with a set of provisions related to the lease or leased premises,
and a set of choices (e.g., AGREE or DEFER) for taking action on
each provision. For certain lease provisions, the parties must not
only indicate agreement, but must agree on a specific value or values
(e.g., the amount of rent to be charged). In some cases, agreement
cannot be reached without negotiating lower-level details. In those
cases, the computer-implemented method permits the parties to jump
to the lower-level decisionmaking process before committing to an
AGREE or DEFER at the higher level of the negotiation phase. Where
a lease provision is deferred, the provision can be negotiated during
a later phase by selecting choices other than AGREE or DEFER (e.g.,
resolution protocol actions such as user forum, LSP, or mediation).
As shown in steps 301 through 309 of FIG. 3, each party is asked
to agree upon certain lease provisions (and, where appropriate,
to specify certain information such as rental price). Although these
steps are shown as sequential in FIG. 3, each user could of course
select the choices and enter information in an order different from
that shown. In one embodiment, however, a user is prevented from
advancing to the next phase of negotiation until all provisions
are either agreed to by both parties or any areas of disagreement
are indicated as being deferred.
As shown in FIG. 13, four different lease provisions 1301 through
1304 are arranged on the left side of the computer screen. A HELP
linkage 1314 can be provided for each lease provision to explain
common lease provisions and to answer frequently asked questions.
The right side of the screen in FIG. 13 is divided into a tenant
portion, a landlord portion, and a middle portion in which either
party can enter information. In general, it is anticipated that
when the tenant logs into the system, the tenant will only be able
to select or modify choices listed under TENANT and values in the
middle portion of the screen. Conversely, the landlord can only
select or modify choices listed under LANDLORD and the values in
the middle portion of the screen. Each party specifies one or more
values in the middle portion of the screen, optionally indicates
comments in one or more comment boxes 1312, and clicks a DONE button
1306 to signify that they have completed their responses for each
negotiation phase.
In general, each tenant and landlord must select either AGREE or
DEFER for each lease provision. Before selecting a choice for a
particular lease provision, the party can "drill down"
to a lower-level decisionmaking process by clicking on an associated
DETAILS hyperlink 1311, which would bring up a page such as that
shown in FIG. 14. Suppose, as shown in FIG. 13, that both parties
have agreed to a required space provision of 5000 square feet (automatically
converted into square meters by the computer); a delivery date of
Jun. 1, 2000; and a lease term of 3 years. Suppose further that
the parties have agreed to defer agreement on the amount of rent
(although a proposed rent amount is listed, and the tenant has added
a comment to comment box 1313). As to the landlord's works (not
explicitly shown in FIG. 13), the parties do not have enough information
to agree or defer to the next step. In that case, one or both of
the parties could click on the associated DETAILS link, which would
bring up the screen shown in FIG. 14.
Turning to FIG. 14, the parties are presented with a set of lower-level
decisions concerning the landlord's works lease provision. As shown
in FIG. 14, agreement on a landlord's works includes deciding whether
the premises are to be delivered on a "turnkey" basis
1401; "as-is" condition 1402; a definition of the landlord's
works 1403; and agreement on the landlord's and tenant's contribution
to the work 1404. A help button (not shown) can be included to explain
the decision and provide a reference to local market practice in
a particular city.
Some of these sub-provisions require nothing more than an AGREE
or DEFER decision (e.g., 1401 and 1402), while others (e.g., 1403
and 1404) require that a value be provided by one or the other party
(e.g., elements 1406 and 1407). Each party can select choices as
shown in FIG. 14 before selecting DONE and returning to the top-level
lease provision screen shown in FIG. 13.
During the negotiation phases, either party can choose to view
a draft lease proposal by clicking on VIEW LEASE PROPOSAL button
1305. In response, the computer generates a draft lease proposal
incorporating the lease provisions that had so far been agreed to
by the parties. One example of this is shown in FIGS. 17A and 17B.
As a practical matter, after the lease has been negotiated (e.g.,
step 206 of FIG. 2), the lease proposal would be superseded by the
actual lease.
As shown by the steps in FIG. 3, additional lease provisions including
lease term, tenure, landlord works (e.g., "as is" condition
or "turnkey" basis), other improvements, other conditions
(e.g., parking, operating expenses, termination condition, etc.),
and draft schedule can also be agreed to, deferred, or negotiated
using the above-described process.
Assuming that both parties have selected either AGREE or DEFER
for each lease provision and click DONE, the computer will advance
to the next negotiation phase, which will now be explained with
reference to FIG. 15. If the parties have not selected either AGREE
or DEFER for all lease provisions in the first negotiation phase,
then in one variant of the invention they will be prevented from
advancing to a later negotiation phase. In certain variations of
the invention, however, the parties are allowed to defer lease provisions
such as the condition of the premises until successively later phases;
at each later phase, the parties are prompted to resolve any outstanding
issues.
FIG. 15 shows a computer screen with choices for a second negotiation
phase. As shown in FIG. 4, in one variation of the invention the
second phase includes steps of presenting a checklist of outstanding
issues that were deferred from the first phase, and soliciting inputs
from the parties that will allow the parties to reach agreement
on the deferred issues using, for example, a local service provider
(LSP) or mediator. Because the amount of the rent was deferred from
phase one (see FIG. 13, lease provision 1303), this lease provision
is again presented to the parties (item 1501 in FIG. 15) with options
for resolving the issue. In one variation of the invention, an issue
can be resolved directly by the parties, or by involving a third
party. The parties may choose for example to resolve the rent issue
in a user forum 1502, such as an on-line or off-line meeting (choices
1505). If both parties agreed to such a resolution, the computer
would assist in arranging an on-line or off-line meeting (e.g.,
by asking the parties for available times; accounting for time zone
differences, etc). The computer could arrange a chat-room dialog
in an on-line forum or a conference call using a computer-aided
program and may include a link through another web site.
Alternatively, the parties may choose to resolve the issue using
a local service provider 1503. Two examples of local service providers
relevant to the issue of rent might be a real estate broker in the
area of the leased property or an appraiser. As indicated in FIG.
15, the parties may agree to hire a broker (choice 1506), and the
computer could suggest a broker in the geographic area of the leased
property. The parties may further choose whether to hire a separate
broker, or to jointly hire a broker to advise both parties as to
local practice (not explicitly shown). As indicated in comment box
1508, the tenant has suggested that the broker should research average
rents in the leased area to help resolve the issue (see below).
As yet a third option, the parties may agree to resolve the issue
through the use of a mediator 1507. In that case, the computer can
again suggest one or more mediators familiar with the type of lease
transaction and convenient to one or both of the parties. Additional
computer screens (not shown) can be presented to the user to obtain
information necessary to consummate the third party relationship.
The computer would issue a request for proposals for the required
assistance.
The negotiation options presented by the computer can be tailored
to the specific lease provision that is the subject of dispute.
For example, if the parties are stuck on the subject of the condition
of the leased property (e.g., the type of network communication
system that will be provided), the computer would suggest a service
provider familiar with telecommunication systems, such as an engineering
consultant or a company that specializes in providing networks.
As another example, if the parties have not reached agreement on
a floor plan, the parties could enlist the services of an architect
or interior designer, again with computer-generated requests for
proposals with the required scope of services (see, e.g., FIGS.
19A and 19B).
If the parties agree that a local service provider is to be hired,
the computer system can recommend one or more providers based on
the geographic area of the lease (see FIG. 1, vendor database 106).
Alternatively, a party may individually choose to hire a local service
provider without the assent of the other party (e.g., an architect),
and the system can recommend one or more service providers in the
same manner. In one embodiment, the system generates a preformatted
request for services using information obtained during the negotiations
(e.g., name/address of the tenant, information concerning the leased
space, etc.) and transmits the request to one or more vendors in
order to receive a quote for services. The request can be transmitted
via e-mail or fax by the computer system, and each vendor can submit
a bid or response to the party or parties requesting the services.
The computer can receive responses in a standardized format and
transmit to the parties a comparison of the proposals if more than
one vendor were selected. In one variation, vendor database 106
includes information concerning ratings or quality marks for specific
vendors based on prior experience with other parties. Consequently,
the parties can make an informed decision regarding potential third-party
service providers.
Resolving issues using an LSP can be done through on-line web-based
conference calls, e-mail, telephone calls, and/or in-person meetings.
Resolving issues without the use of an LSP can be done using the
same techniques.
After the issues are resolved by the parties, the parties enter
the resolved information into the computer (using, for example,
the computer form of the type shown in FIG. 13) and the computer
stores the revised negotiation information into the lease database.
Additionally, the computer can "lock in" the agreed items
to prevent modification by either party. The result of phase two
is a revised lease proposal with the agreed changes, which the computer
generates upon command based on the revised negotiation information.
Once the parties have successfully completed the first and second
phases of the negotiation, the computer system will allow them to
proceed to the third negotiation phase. It should be understood
that additional computer screens corresponding to the steps in FIG.
5 and the succeeding negotiation phases can be provided, although
none are illustrated herein.
The third negotiation phase (agreement on lease deliverables) will
be described with reference to FIG. 5. It will be appreciated that
although some of the steps shown in FIGS. 5 through 11 appear to
repeat some of the lease provisions that were the subject of an
earlier negotiation phase, in practical terms any lease provision
that was the subject of complete agreement in an earlier phase would
be removed from later negotiation phases.
Beginning with FIG. 5, in step 501 the parties agree upon a checklist
(e.g., condition of the premises, furnishings, network systems,
etc.). If these were already agreed to in an earlier negotiation
phase, the computer would delete them from a later phase. In step
502, the parties agree upon the condition of the premises, indicating
whether the premises will be delivered "as is," or with
turnkey modifications or with other modifications. In step 503,
if LSP intervention is needed, it is selected as described above.
In step 504, the parties agree upon the furnishings (e.g., cafeteria
equipment, furniture, etc.). In step 505, the parties agree upon
a network system, and in step 506 they agree on a telecommunications
system (using if necessary an LSP as per step 503). In step 507,
the parties agree upon a summary document including the agreed deliverables
and a completed lease proposal including schedule.
In one variation of the invention, a schedule calculator (FIG.
1A, element 111) calculates a proposed schedule corresponding to
milestones during the negotiation and execution phase, based on
average actual lengths of time stored in a database. In one variation,
the lengths of time stored in the database are based on or derived
from previously negotiated contracts (i.e., real-world practice
is used to project future schedules). For example, if over the course
of five different negotiated leases the average amount of time needed
to go from generating a draft lease to moving into the leased property
is two months, the scheduler would use that value to schedule such
a milestone two months before the lease move-in date. The computer
displays and prints a lease negotiation and execution schedule based
on information provided by the parties and from databases of previously
negotiated leases. FIG. 18 shows a computer-generated schedule for
each phase of a nine-phase lease negotiation and execution process.
The fourth phase (define tenant environment) will be explained
with reference to FIG. 6. In step 601, the parties (including the
tenant and its local service providers) agree upon a tenant's checklist.
This can include an agreement on a floor plan, furniture needs and
costs, and LHI (leasehold improvement) cost. Steps 602 through 607
are similar in nature to the other steps already discussed (i.e.,
the parties either agree or defer agreement on each item, and can
resolve areas of disagreement using LSPs or other options). The
result of negotiation in phase four is the issuance of a summary
document including a checklist of outstanding tenant environment
needs; a modified lease proposal; and a revised schedule (if necessary).
The fifth phase (agreement on legal documents) will be described
with reference to FIG. 7. In step 701, the parties agree to require
intervention by LSPs (e.g., lawyers) if necessary. In step 702,
a draft contract (lease) is generated by the computer on the basis
of the negotiated information that was "locked in" by
agreement of the parties. This step can be done using a document
template populated with information from lease database 104. In
step 703, the parties review and resolve the contract, including
mediation if necessary. In step 704, the parties agree upon lease
attachments such as a detailed description of office space, final
plans and specifications. In step 705, a lease agreement is prepared.
The result of the fifth phase is a lease that the parties agree
on (but which has not yet been executed).
The sixth phase (obtain approvals and execute documents) will be
explained with reference to FIG. 8. In step 801, information summaries
are prepared. If a corporate approval summary is required, a standard
corporate approvals form is generated using information from the
lease database. If a financial analysis is required, a standard
financial analysis form is generated. In step 802, corporate approvals
are obtained by each party. This includes steps of submitting the
forms and information for internal approvals, obtaining signatures
of local subsidiaries if required; and obtaining management signatures
on the approval forms. In step 803, the legal documents are executed.
This may include steps of identifying authorized signatories; transmitting
original signature documents by e-mail, fax or express mail, and
obtaining the actual signatures. In step 804, the parties exchange
documents, pay required deposits, and exchange keys or other entrance
mechanisms (security codes, etc.) The outcome of this phase is that
all legal documents are executed and access is granted to the premises.
The seventh phase (complete lease deliverables) will be explained
with reference to FIG. 9. In step 901, the current occupier vacates
the premises (if it has not already done so). In step 902, the landlord
completes the leasehold investment required under the lease. In
steps 903 and 904, the network and telecommunication systems are
delivered in accordance with the lease. In step 905, the furniture
is delivered and accepted. Any works for which the landlord is not
responsible would be eliminated as decisions in this phase.
In step 906, the tenant formally accepts all of the above deliverables
(to the extent that these were not accepted in the preceding steps);
this may include steps of inspecting the premises, rectifying defects
or variances, and providing a summary of delivered items.
The eighth phase (complete tenant works) will be explained with
reference to FIG. 10. The steps shown in FIG. 10 relate to works
that the tenant is completing without assistance of the landlord.
As such, the decisions in this phase involve only the tenant and
its LSPs (although, in practice, the tenant may require the landlord's
cooperation to resolve issues related to installation of tenant
systems in the premises). Any steps that are completed by the landlord
on behalf of the tenant in phase seven would be automatically eliminated
from phase eight. Once all of the tenant's works are completed,
the tenant would move into the new premises.
The ninth phase (issue best practice report) will be explained
with reference to FIG. 11. In this phase, the parties review the
negotiation process for evaluation purposes, particularly with a
view to building a database that can be used by parties in future
negotiations. In step 1101, the final schedule is reviewed and accepted
with comments. The final schedule will show the variation between
the initial and actual schedules, and the computer will prompt the
parties to indicate the reasons for the variances. In step 1102,
the parties evaluate LSPs that were used during the negotiation
process (e.g., mediators, architects, lawyers), and the evaluation
information is stored in a database. In step 1103, a best practice
questionnaire is completed by each party. The questionnaire may
include questions soliciting successes; problem areas identifying
locality-specific difficulties encountered during the process (e.g.,
difficulties in completing legal documents in London); and improvement
suggestions. The results are stored in a computer database. Finally,
in step 1104 a best practice report is generated and stored in a
database. In one variation, the best practice report is generated
using a document template that extracts answers to questions and
information from the lease negotiation process. The report can be
viewed by parties to a future negotiation to help in a transaction.
FIG. 16 shows a computer-generated lease proposal that can be filled
in by one or both of the parties. In one variation of the invention,
if the parties have already begun discussions, they could use a
form such as that shown in FIG. 16 to enter information regarding
the proposal without having to go through a more detailed agree/defer
process illustrated in FIGS. 13 through 15.
Thus has been described a system and method for negotiating a lease
using a computer network. Reference numerals in the appended method
claims identifying steps are for convenience only and are not intended
to imply a necessary ordering of the steps. It is, therefore, to
be understood that within the scope of the appended claims the invention
may be practiced otherwise than as specifically described. No claim
should be interpreted to be in means-plus-function format. |