GUIDELINE B-026
SUBJECT: Lease Procedures and Guidelines
These guidelines set forth the leasing procedures for all institutions and
Tennessee Technology Centers governed by the Tennessee Board of Regents.
I. APPROVALS REQUIRED
A. Institution/Technology Center as Lessee
All agreements involving or related to the lease of real property for a term of
more than five (5) years or a consideration of more than $15,000 per year shall
be approved by the Chancellor, including any amendment or cancellation (TBR
Policy No. 1:03:02:10).
B. Institution/Technology Center as Lessor
All agreements involving or related to the leasing of Board of Regents or
institutional property for a term of more than five (5) years or a consideration
more than $15,000 per year shall be approved by the Chancellor, including any
amendment or cancellation (TBR Policy No. 1:03:02:10).
C. Leases for more than $15,000 per year or for more than 5 years
All proposed leasing actions for real property with consideration more than
$15,000 per year or for a term of more than five (5) years shall be submitted to
the Department of Finance and Administration and the Tennessee Higher Education
Commission by the Office of Facilities, Tennessee Board of Regents for review
and analysis prior to taking action by the institution or technology center.
D. Leases for more than $50,000 per year or for more than 5 years
All lease proposals involving a consideration of more than $50,000 per year or a
term longer than five (5) years, upon approval of the Department of Finance and
Administration and the Tennessee Higher Education Commission shall be presented,
with appropriate comment or recommendation, to the State Building Commission
Executive Sub-Committee for approval prior to any leasing action. Leases
approved during the annual budget review process will not require prior approval
of the State Building Commission Executive Sub-Committee (SBC Policy).
E. Leases for more than $15,000 per year and not more than $50,000
All lease proposals with a consideration of more than $15,000 per year and not
more than $50,000 shall be submitted to the Department of Finance and
Administration and the Tennessee Higher Education Commission prior to any
leasing action but shall not require prior approval of the State Building
Commission Executive Committee. After review and analysis, the Department of
Finance and Administration and the Tennessee Higher Education Commission shall
provide comments to the Board of Regents (SBC Policy).
F. Leases for more than $40,000 per year or for more than 5 years
Documents for all leases and lease amendments with consideration of more than
$40,000 per year or a term longer than five (5) years shall be approved by the
State Building Commission in accordance with TCA 12-2-115 and the Tennessee
Higher Education Commission. Signatures required include:
President of the Institution or Vice Chancellor for Vocational Education for
an TTC (signature shall be acknowledged by a notary public) and Chancellor or
his/her designee (signature shall be acknowledged by a notary public)
State Building Commission with signatures by:
Commissioner of Finance and Administration
State Attorney General
Governor
G. Leases for $15,000 or less per year and for five (5) years or less where the
institution/technology center is the Lessee or Lessor, shall be approved by:
President of the institution
Vice Chancellor for Vocational Education for a TTC
H. Leases for which operating funds will be requested or for more than five
years
Any lease which is for a term longer than five (5) years or in which the
total of the consideration, maintenance costs, utility costs and/or custodial
costs are estimated to exceed $15,000 per year, and funding for same is
requested through state appropriations, shall be approved by the Tennessee
Higher Education Commission (THEC Policy).
II. NON-DISCRIMINATION
A. Institutions/technology centers engaging in a real estate transaction,
including sale, rental or lease, shall not discriminate on the basis of race,
color, creed, religion, sex or national origin. See TCA 4-21-601.
B. No state employee or agent shall enter into a commercial agreement on
behalf of the state with a club which denies to a person entry, use of
facilities or membership or unreasonably prevents the full enjoyment of such
club on the basis of sex, race, creed, color, religion, ancestry, national
origin or disability. See TCA 4-21-803.
III. NOTARIZED SIGNATURES REQUIRED
Leases in which the institution/technology center is the Lessee which require State Building Commission approval (i.e., for more than $40,000 annual rent or for a term of more than five (5) years shall have the following signatures acknowledged by a notary public (per TCA 66-22-101).
1. The Lessor
2. The President of the institution or the Vice Chancellor for Vocational Education for an TTC
3. The Chancellor or his/her designee
IV. RECORDING OF LEASES
Leases in which the institution/technology center is the Lessee which require
State Building Commission approval shall be recorded by the Commissioner of
Finance and Administration in the county or counties where the property is
located (per TCA 12-2-105).
V. ADVERTISING FOR LEASED SPACE
Where the institution/technology center is the lessee, advertising shall be
required in all transactions involving new, succeeding, superseding leases or
lease renewals except:
(1) Where the annual rent does not exceed $8,500 or where the term of the
lease is one year or less.
(2) Where property is owned by a governmental agency and leased to another
governmental agency.
(3) Where a supplemental agreement is made to an existing lease for additional
space at a negotiated price without modifying the original lease term (Reference
TCA 12-2-114).
VI. FORMS & DOCUMENTATION REQUIRED
Submit to the Chancellor five (5) copies each of the following forms at the
appropriate times described above. Copies of all forms are available from the
Office of Facilities upon request.
A. Space Action Request Form (green)
Five green copies required with initial submittal of request for leased space.
B. State University and Community College of Tennessee Standard Lease Form
Minimum of five (5) copies required after approval has been given to enter into a lease agreement. Use the Board of Regents standard form of agreement unless prior approval has been obtained to use any other form. There should be no changes or additions to the standard form without prior approval.
C. Statement of Financial Interest for Leased Property
For all leases subject to the State Building Commission approval, when the institution/technology center is the Lessee, the Lessor shall identify persons with a financial interest in the leased property on the Statement of Financial Interest for Leased Property when submitting the lease agreement.
D. Space Action Request, Office Space Requirements Analysis, Finance and
Administration Form RSM-1A
Document space needs on this form, adapting as necessary to include classroom
and class laboratory space needs and submit with initial submittal of request
for leased space.
E. Supplemental Data Questionnaire, Finance and Administration Form RSM-1B
Document space needs on this form and submit with initial submittal of
request for leased space.
F. Certification of Funds Available
For all leases subject to State Building Commission approval, a letter signed
by the President of the institution or Vice Chancellor for Vocational Education
for an TTC certifying that funds are available must accompany the lease
proposal.
G. Summary of Analysis of Lease Proposals Received
If advertising and receipt of lease proposals is performed by the institution/technology center, a summary of analysis of lease proposals must accompany the lease proposals including cost analysis.
H. Enrollment Projections and Program Documentation
Provide historical enrollments and enrollment projections and documentation of programs to be offered at the site of the proposed leased facility shall accompany the lease proposal as justification for the need to lease space.
VII. STATE STATUTES ON STATE LEASES & DISPOSALS OF REAL PROPERTY
The following State Statutes on State leases and disposals of real property
are referenced for your information. Copies are available from the Office of
Facilities upon request.
A. TCA 4-15-102 - State Building Commission - Powers and Duties
B. TCA 4-21-601 - Discriminatory Housing Practices Generally
C. TCA 4-21-803 - Commercial Agreements with the State - Prohibition - Required Statement
D. TCA 12-2-112 - Disposal of Surplus Interests in Real Property and Energy Resources
E. TCA 12-2-114 - State Leases - Procedure
F. TCA 12-2-115 - Approval of Lease Instrument where State is Lessee or Lessor
G. TCA 49-8-111 - Powers Regarding Property
VIII. LEASE POLICIES OF THE STATE BUILDING COMMISSION
Item 7, Leases of Real Property as published in By-Laws, Policy and Procedure of
the
State Building Commission of Tennessee, compiled January 1991 is referenced
for your information. Copies are available from the Office of Facilities upon
request.
Source: Presidents Meeting, May 14, 1991; Presidents Meeting November 5, 1997