Real Estate Counsel AI is now live in beta!
Check it out on Open AI directly, or read more about it at the (new) Resource Hub (preview video below).
Large language models + legal documents
Last year when OpenAI released ChatGPT4, I immediately thought of a number of really cool use cases that I experimented with and wrote about (Aisle Be Back: Using AI in Retail Real Estate).
While there are a bunch of use cases, one stuck with me: reading and interpreting real estate documents.
ChatGPT is a large language model, meaning it can understand and generate human-like text based on the input it receives. And what better input than legal language written by lawyers whose purpose is to ensure that no big issue is ambiguous.
The irony of course is that, while the goal is to ensure no ambiguity, it sometimes takes an (expensive) lawyer to navigate how to interpret what one wrote.
So it should come as no surprise that one of the barriers to entry to offline retail is the navigation, interpretation, and negotiation of these documents and related notices. Most commonly these are:
Letters of Intent (LOI)
Leases and amendments
Estoppels
Notice of intent to renew / terminate
Sublease agreements
Notice to cure or quit / of default
Guaranty
And even if you’re familiar with all of these, chances are that you still use an attorney to draft, respond, or interpret these — both during negotiations AND after they’re signed when you have questions.
Lawyers are expensive, but navigating and interpreting these documents is time consuming. So professionals who are new in the industry are stuck with two choices:
Spends hundreds — if not thousands — of dollars: ask a lawyer who can cost hundreds of dollars per hour to read, interpret, and explain a document or provision
Spend hours: read, research, and (diffidently) interpret the best next steps
1REC’s Real Estate Counsel AI is being developed to save professionals hours and dollars
1REC’s Real Estate Counsel AI is being trained to support operators in a number of use cases:
LOI Negotiations
Draft an initial LOI
Read and recommend a counter to another party's LOI
Identify risks to you if you accept the LOI in its current condition
Lease Negotiations
Identify any major issues with the current lease draft
Recommend a counter to a specific provision
Provide an example of a scenario where this provision would be triggered
Lease Questions
Identify critical dates: expirations, renewal notice deadlines, rent commencement dates
Answer facilities questions
Summarize tenant allowance collection requirements and deadlines
Document Summaries
Summarize the key operational terms of a lease
Summarize the terms of all rent charges in a lease
Document Comparisons
Identify inconsistencies between a final LOI and an initial lease draft
Compare rent invoices to the terms of the lease
Draft Notices & Letters
Draft a notice to execute an option term
Draft a termination notice, citing the relevant provisions in the lease
It’s important to note that this AI is NOT intended to replace a licensed attorney, but to augment your processes and knowledge. And while we’re in beta, there are surely going to be some learnings (for you AND me) as it gets used more and more.
How it works
I’ve trained it with a myriad of publicly available resources, as well as my own personal tweaks based on my experiences negotiating various documents across the country, for brands of various sizes and industries, and landlords of different calibers.
I’ve also uploaded a number of documents, guides, and transcripts, as well as given it instructions on how to reply to certain messages. It’s not perfect, but it’s a great starting point for any situation where you may otherwise need to engage a lawyer for hundreds of dollars an hour.
You only need $20
As long as you have ChatGPT Plus it’s FREE. If you don’t have an account, it’s only $20/month and I’d HIGHLY recommend you play around with it even if you’re not interested in my custom GPT — and you can cancel any time, so your maximum downside is $20. Keep in mind, ChatGPT Premium also gives you access to all other custom GPTs, the DALLE image generator, and the other Premium features.
Best case scenario, you’ll find yourself with a helpful tool for real estate negotiations. Worst case, you’ll be more educated on what AI can do.