The lease lifecycle

In Tango, a lease is a living object. It moves through a sequence of stages — from the moment it is signed externally, through its operational years, to either renewal or termination. Different roles act in each stage, different data accrues, and different actions become available. Most operational questions in Tango (“why can I not generate rent for this lease?”, “why does the schedule look wrong?”) trace back to a lease being in a stage other than the one you expect. This page explains the stages in order and points to the how-to for the actions that happen in each.

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The arc, end to end

Each stage below corresponds to a node on the diagram.

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Stage by stage

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1. Signed externally

A lease enters Tango’s world the moment two parties sign — on paper or digitally — outside the system. Tango is not the contracting tool; it is what happens after. At signing, the lease has terms (commencement, expiration, options, clauses), parties (landlord, tenant, internal stakeholders), a location, and a financial structure (base rent, recurring costs, percentage rent if applicable). The signed lease is the source document the abstraction step works from. Tango will reference it for years.

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2. Abstracted

A real estate manager (or whoever owns the portfolio record) abstracts the lease into Tango. Abstraction is structured data entry: the lease’s terms get transcribed into Tango fields so the rest of the system can act on them. Until a lease is abstracted, no other Tango feature can operate on it. Abstraction creates a lease record with basic info (name, ID, lease type), the associated location, the term structure (commencement, expiration, options, renewals), key clauses, and contacts on both sides. Recurring costs and accounting setup come after abstraction (in stage 4), though the abstraction step usually involves preparing those structures so they can be entered cleanly. How to abstract a lease → Create a lease and Abstract a lease.

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3. Approved

Once the abstract is complete, it enters the lease approval workflow. Approvers — typically more senior real estate or accounting team members — review the abstract for accuracy before the lease becomes active. The workflow can span multiple levels depending on lease value and how your administrators have configured it. A lease cannot accrue payments or run through lease accounting until the abstract is approved. How approval is configured → Lease approval workflow.

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4. Financially configured

After approval, the lease accountant (or the RE team in smaller organizations) sets up the financial spine of the lease:

• Recurring costs: the line items that produce payments each period — base rent, OpEx, taxes, insurance, percentage rent.
• Accounting components: the inputs the lease accounting engine needs — discount rate, classification inputs, the term assumptions Tango will use for the schedule.

These are the inputs that drive every payment and every journal entry from this point on. How to set up recurring costs → Recurring costs.

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5. Classified and scheduled

Tango runs the lease classification test using the accounting components. The test determines whether the lease is operating, finance, or short-term under ASC 842 and IFRS 16. The result drives how the schedule is built — what gets capitalized, what hits the P&L, on what cadence. Once classification is set, Tango builds the accounting schedule: the period-by-period plan for liabilities, ROU assets, expense, interest, and amortization across the lease’s life. How to run the classification test → Run classification test. How to build the schedule → Create accounting schedule.

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6. Active and operating

A lease is operationally active when its abstract is approved and its accounting schedule exists. From here, the operational loop runs each period:

• Rent and recurring costs are generated as payment records.
• Approved payments are picked up by AP integrations or generate AR invoices.
• The lease accounting engine posts journal entries to the GL.
• At year-end (or at the landlord’s reconciliation cadence), CAM and operating expenses are reconciled against actuals.

This is where most days in Tango Lease are spent. Operation continues until something changes. How to generate rent → Generate rent. How to post journal entries → Post journal entries. How reconciliations work → CAM and reconciliations.

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7. Mid-term events

Leases change. Three events most commonly interrupt steady-state operation:

• A critical date approaches — an option-exercise deadline, a percentage-rent reset, a notice cutoff. The RE manager records the action.
• An option is exercised — an extension, a downsize, an expansion, all of which change the term.
• The lease is amended — a side letter or amendment that changes rent, dates, or scope.

Each of these typically triggers a schedule recalculation. The original accounting schedule no longer reflects the lease’s actual remaining terms, and Tango rebuilds it. How to track critical dates → Critical dates and options. How to exercise an option → Exercise an option. How to amend a lease → Amend a lease. How to recalculate schedules → Recalculate schedules.

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8. End of term

Eventually the lease reaches expiration. Three outcomes:

• Renew: a new term begins. Practically, this means a new lease abstract (or a new term on the same record, depending on your conventions). The cycle starts over from stage 2.
• Extend month-to-month: some leases roll into a holdover after expiration, with rent continuing on a month-by-month basis until a decision is made.
• Terminate: the lease ends. The accountant runs a cease-use procedure, the ROU asset is written off, and any final true-ups — reconciliations, holdover rent, restoration costs — are posted.

How to extend month-to-month → Extend month-to-month. How to terminate a lease → Terminate a lease.

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9. Inactive

A terminated lease is marked inactive. Its data is retained for audit, historical reporting, and accounting close-out. Inactive leases do not generate new payments, do not appear in active-lease reports by default, and do not produce new journal entries — but they remain queryable in reporting so prior-period analysis and audit support work as expected.

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Cross-cutting concerns

A few things touch every stage rather than belonging to one. Critical dates thread through the entire active life of a lease. From abstraction until termination, options, expirations, and rent-change dates need to be tracked. Many Tango reports and dashboards exist to surface upcoming dates before they require action. See Critical dates and options. Approvals show up at multiple points: lease abstract approval (stage 3), payment approvals during operation, and recurring-cost approvals when financials change mid-term. Schedule recalculation is the bridge between the operational and accounting sides of Tango. When an RE manager records an option exercise or amendment, the lease accountant’s schedule has to be regenerated. The lifecycle does not loop back from stage 7 to stage 5 by accident — that recalculation is what keeps the GL accurate.

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