A few years ago, multifamily executives wondered how long it would take for online leasing to catch on. Now that it has, some apartment firms are ready to take the next step: eliminating the paper lease. That would mean that even when customers come into the leasing office, they wouldn't have to put pen to paper on a printed contract.
“We've been putting the foundation in place for several years now,” says R. Scot Sellers, chairman and CEO of Archstone-Smith Trust, a public apartment REIT at which almost 30 percent of leases are done online. “We will be rolling out pieces of it. But I'm not sure we will be all the way there for another one and a half to two years.”
What's standing in the way of Archstone and other multifamily firms? Practical considerations. “When [a prospect] leases in the office [versus online via a home a computer], how do they do that? Do we have a terminal they go to or do we do it together?” Sellers asks. “We're really working on the process, the systems, making it user-friendly, making it convenient, and having it all be seamless.”
EARLY STEPS Going paperless does require coordination among several different software programs, from the Web-based interface people use to apply online to an apartment company's own property management system. “When you truly get to paperless, all of that rental application information that they're filling in can get into property management systems,” says Mike Cornell, COO of Realty DataTrust, an apartment technology provider in Scottsdale, Ariz. “Then they can generated final, legal documents automatically through the system.”
Place, which has done more than $470 million in student housing properties since 1996 and currently manages more than 18,000 beds, says all of its more than 25,000 leases per year are paperless. “This gives freedom to tenants to seek their own roommates and reserve beds when and where they like on a 24/7 basis, it places all documents in a digital archive, and it frees up property management staff to be proactive and focus on customer service, marketing, and other activities rather than filling out forms,” Ratchford says. “The hours spent on filling out forms in the leasing process as well as roommate assignments by staff are quantifiable and increase as the portfolio grows.”
In fact, Place sees the advantages of the system in the number of times users click “accept” on their leases. “As with online banking and airline reservations, it is clearly more convenient for the customer [especially the student demographic] to find roommates and shelter on their own schedule rather than waiting in line at a leasing office,” Ratchford says. “Logs of our system show that [more than] 40 [percent] of activity occurs between midnight and 6 a.m.”
WebRoomz handled the student housing firm's paperless transformation. “We take what they [a perspective renter] would do on paper and lay it out,” says Scott Campbell, head of professional services for WebRoomz. “When someone comes online, they're going to see the same forms as they would on paper. The customer is doing it rather than having the leasing person filling it out for them. The lease, at the end, looks the same as it would have been on paper.”
Place says the paperless leases are legally binding in most jurisdictions as long as users click the “I Accept” button on the Web site to indicate their acceptance of the terms of the agreements.