623  Lease Standards

Approved by President
Effective Date:

Responsible Division: Business and Finance
Responsible Office:  Campus Planning
Responsible Officer: Assistant Vice President, Campus Planning

 

I. Purpose

This policy sets forth real property leasing procedures for Middle Tennessee State University (MTSU or University).

II. General

Leases involving consideration of greater than one hundred fifty thousand dollars ($150,000.00) per year or a term greater than five (5) years.

A.  University as Lessee or Lessor. These agreements shall be approved by the President, including any amendment or cancellation, and the State Building Commission (SBC), in accordance with T.C.A. § 12-2-115 and the Tennessee Higher Education Commission (THEC).

B.  Required signatures include:

1.  The Lessor/Lessee (signature shall be acknowledged by a notary public).

2.  President (signature shall be acknowledged by a notary public).

3.  State Attorney General and Reporter, in compliance with T.C.A. § 12-2-115.

4.  Commissioner of General Services, if procured by STREAM.

5.  Governor (signature is required for lease-outs).

C.  All proposed leasing actions with consideration more than one hundred fifty thousand dollars ($150,000.00) per year, or for a term of more than five (5) years, shall be submitted to the SBC and THEC by the University for review and analysis prior to taking action.

D.  After review and analysis, the SBC and THEC shall provide comments to the University. (SBC Policy)

E.  Leases approved during the annual budget review process will not require prior approval of the SBC Executive Sub-Committee. (SBC Policy)

F.  Leases for one hundred fifty thousand dollars ($150,000.00) or less per year, or for five (5) years or less, where the University is the Lessee or Lessor, using one of the following approved forms: MTSU Standard Lease Agreement, Mutual Use Agreement, Transient Use Agreement, or Tenant Use Agreement, shall be approved by the President.

G.  Leases for which operating funds will be requested for more than five (5) years, or in which the total of the consideration, maintenance costs, utility costs, and/or custodial costs are estimated to exceed one hundred fifty thousand dollars ($150,000.00) per year, and funding for same is requested through state appropriations, shall be approved by the THEC (THEC Policy).

III. Amendments to Leases

Amendments to leases originally submitted to, and recommended by, the SBC shall receive SBC approval prior to execution of such amendments. Any amendment to a lease which was not submitted and approved by the SBC because the term was less than five (5) years, or the annual rent due to the lessor was less than one hundred fifty thousand dollars ($150,000.00), but due to the amendment or the aggregate effect of amendments now exceed those limits, shall be submitted to the SBC for approval prior to the execution of the lease amendment.

IV. Non-Discrimination

The University, engaging in a real estate transaction, including sale, rental, or lease, shall not discriminate on the basis of race, color, creed, religion, sex, disability, familial status, or national origin. T.C.A. § 4-21-601.

V. Recording of Leases

Leases in which the University is the Lessee, which require SBC approva,l shall be recorded by the Commissioner of General Services in the county(ies) where the property is located. T.C.A. § 12-2-105.

VI. Advertising for Leased Space

A.  Where the University is the Lessee, advertising shall be required in all transactions involving new, succeeding, or superseding leases or lease renewals except:

1.  Where the annual rent does not exceed fifty thousand dollars ($50,000.00), or where the term of the lease is one (1) 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. T.C.A. § 12-2-114.

4.  Where the space required by the entity has special and unique requirements, as determined by the SBC.

B.  Space meeting the following needs has been determined by the SBC to be “special and unique”:

1.  The space to be leased has characteristics, such as location, size, or quality, which can only be satisfied by one landowner, as determined by a reasonable survey, and will have an annual rent of less than fifty thousand dollars ($50,000.00).

2.  The space to be leased will be let for less than tirty (30) days; will have a total cost of fifty thousand dollars ($50,000.00) or less; and is for an auditorium, hearing room, conference, or related space.

VII. Forms and Documentation Required

The following forms must be submitted to the President:

A.  Space Action Request Form. One (1) copy required with initial submittal of request for leased space.

B.  University Standard Lease Agreement Form. Minimum of three (3) copies required after approval has been given to enter into a lease agreement.

C.  Statement of Financial Interest for Leased Property. For all leases subject to SBC approval, when the University 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.  Conflict of Interest

1.  No individual, company, or other entity involved in the evaluation or negotiation of proposals should have a financial interest or have the appearance of a conflict of interest unless disclosed and addressed in accordance with SBC Policy.

2.  A written conflict of interest disclosure documenting the independence of each person involved must be completed and retained as part of the procurement file. 

E.  Office Space Requirements Analysis, Finance, and Administration Form RSM-1A for all leases subject to SBC approval. 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.

F.  Supplemental Data Questionnaire, Finance, and Administration Form RSM-1B for all leases subject to SBC approval. Document space needs on this form and submit with initial submittal of request for leased space.

G.  Certification of Funds Available. For all leases subject to SBC approval, a letter signed by the President certifying that funds are available must accompany the lease proposal.

H.  Summary of Analysis of Lease Proposals Received. If advertising and receipt of lease proposals is performed by the University, a summary of analysis of lease proposals must accompany the lease proposals including cost analysis.

I.  Enrollment Projections and Program Documentation for all leases subject to SBC approval. Provide historical enrollments, 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.

VIII. State Statutes on State Leases and Disposals of Real Property

The following State statutes on State leases and disposals of real property are referenced below:

A.  T.C.A. § 4-15-102 - State Building Commission - Powers and Duties

B.  T.C.A. § 12-2-112 - Disposal of Surplus Interests in Real Property and Energy Resources

C.  T.C.A. § 12-2-114 - State Leases - Procedure

D.  T.C.A. § 12-2-115 - Approval of Lease Instrument where State is Lessee or Lessor

E.  T.C.A. § 49-8-111 - Powers Regarding Property

IX. 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 February 2014, is referenced as part of this policy.

Forms: none.

Revisions: none.

References: By-Laws, Policy, and Procedure of the State Building Commission of Tennessee; T.C.A. §§ 4-15-102; 12-2-112-115; 49-8-111.