SYSTEM REGULATION Acquisition and Disposition of Real Property Through Leasing by eddie22

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									SYSTEM REGULATION 41.05.03 Acquisition and Disposition of Real Property Through Leasing and Rental Agreements November 20, 2003 Supplements System Policy 41.05

1.

DEFINITIONS

For the purpose of this Regulation, the following definitions are applicable: 1.1 Lease Agreement: A written agreement (may be in the form of an intrasystem, interagency agreement, or interlocal agreement) specifying rights and duties pertaining to the exclusive use of real property for a continuous period of time thirty (30) calendar days or longer, and which sets forth the terms and conditions of the use of the real property. Rental Agreement: A written agreement (may be in the form of an intrasystem, interagency agreement, or interlocal agreement) specifying the rights and duties pertaining to a use of real property that is non-exclusive, or for a period of time equaling less than thirty (30) calendar days, or for a period of time that is not continuous, and which sets forth the terms and conditions of the use of the real property.

1.2

For the purpose of Section 3 of this Regulation, the following definition is applicable: 1.3 Best Value bid process: The Best Value bid process requires that bids submitted by potential Lessors or Lessees be evaluated by considering quantitative and qualitative factors, such as: (a) (b) the total cost of the lease agreement; the value to the educational mission and research initiatives of the System component; the location and size of lease space; the condition of the lease space, including compliance with all applicable codes and regulations (e.g. architectural barriers law); the utility costs; the parking availability and access to public transportation; the relationship with the Lessor or Lessee and the value of such relationship to the System component;

(c) (d)

(e) (f) (g)

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(h)

reputation of the Lessor or Lessee, and indicators of successful performance of the lease agreement (such as the financial resources, performance of other legal agreements, etc.); and any other relevant factor that a private business entity might consider.

(i) 2.

AUTHORITY FOR LEASING Through System Policy 41.05, the Board of Regents established the System Real Estate Office (“SREO”) as the administrative office charged with assisting and reviewing leasing for System components. The Board of Regents has specified the following criteria for leasing authority: 2.1 Lease Agreements which must be submitted to the Board of Regents: Any real property Lease Agreement, where the component is the Lessor or Lessee, and where the term of the Lease is greater than five (5) years and/or the total consideration is greater than $300,000 must be submitted to the Board of Regents for approval, provided: (a) The System Real Estate Office (“SREO”), with cooperation from the component, will negotiate the lease conditions, coordinate preparation of the lease form with the Office of General Counsel (“OGC”), and submit the Agenda Item requesting Board of Regents’ approval. If the Board of Regents approves the lease, the lease form will be executed by the Chancellor or designee. If the lease is approved, the component is responsible for administering the lease agreement. Any lease, where the term of the Lease is greater than five (5) years and/or the total consideration is greater than $300,000, that does not have approval from the Board of Regents will be void and of no effect.

(b)

(c)

(d)

2.2

Lease Agreements which must be submitted to the Chancellor: Any real property Lease Agreement, where the component is the Lessor or Lessee and where the term of the Lease is five (5) years or less and the total consideration is greater than $200,000 but does not exceed $300,000, must be submitted to the Chancellor or designee for approval, provided: (a) The SREO, with cooperation from the component, will negotiate the lease conditions, coordinate preparation of the lease form with the OGC, and submit the lease form to the Chancellor or designee for approval.

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(b)

If the Chancellor approves the lease, the lease form will be executed by the Chancellor or designee. If the lease is approved, the component is responsible for administering the lease agreement. Any lease, where the term of the Lease is five (5) years or less and the total consideration is greater than $200,000 but does not exceed $300,000, that does not have approval from the Chancellor or designee will be void and of no effect.

(c)

(d)

2.3

Lease Agreements which may be submitted to the CEO: Any real property Lease Agreement, where the component is the Lessor or Lessee and where the term of the Lease is five (5) years or less, and the total consideration is less than $200,000 may be submitted to the component CEO or designee for approval, provided: (a) The SREO or the component will negotiate the lease conditions, coordinate preparation of the lease form with the OGC, and the seeking of approval. If the component negotiates the lease, a copy of the lease must be submitted to the SREO for review prior to the execution of the lease form. If the lease is approved, the lease form will be executed by the CEO or designee. After the lease is executed by all parties, a copy must be given to the SREO for data entry. If the lease is approved, the component is responsible for administering the lease agreement. Any lease, where the term of the Lease five (5) years or less and the total consideration is no greater than $200,000, which does not have approval from the CEO or designee, will be void and of no effect.

(b)

(c)

(d)

(e)

(f)

2.4

Component leases and other agreements: The following lease agreements may be negotiated and entered into by the component, subject to the specified conditions: (a) By Minute Order, the Board of Regents authorized Texas A&M University to negotiate and enter into long-term ground leases in the Texas A&M University Research Park without submitting such leases to the Board of Regents, or the Chancellor or designee, for approval. Such ground leases may be executed by the Texas A&M University CEO or designee. After the lease is executed by all parties, a copy must be given to the SREO for data entry.
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41.05.03: Acquisition and Disposition of Real Property through Leasing and Rental Agreements

(b)

Intrasystem agreements, rental agreements, and student housing agreements do not require submission for approval. The SREO does not require a copy of such agreements.

3.

LEASING PROTOCOL 3.1 Lease with the private sector: In leasing from the private sector, System or components are encouraged to use the “Best Value” bid process. If the Best Value bid process is not feasible, the System component may lease space from the private sector through a negotiated agreement. In such an event, the System component must provide to the SREO written documentation of why the Best Value bid process was not considered feasible, prior to entering into negotiations. 3.2 Lease with federal agencies: Lease agreements between System components and an agency of the United States government may be by negotiation and do not require a Best Value bid process. Lease with other state agencies: Lease agreements between a System component and another agency of the State of Texas should comply with the Interagency Cooperation Act as specified in Chapter 771, Government Code. Interagency agreements may be by negotiation and do not require a Best Value bid process. Lease with a Municipality, City, County, or other local governmental body: Lease agreements between System components and municipalities, cities, counties, or other local governmental bodies located in Texas or a state that borders Texas, should comply with the Interlocal Cooperation Act as specified in Chapter 791, Government Code. Interlocal agreements may be by negotiation and do not require a Best Value bid process; however, the Lease payment must be in an amount that is fair compensation. Lease agreement between components of The Texas A&M University System: Lease agreements between System components should be in an intrasystem form. Intrasystem agreements may be by negotiation and do not require a Best Value bid process. Lease information: Lease Agreements must include the information specified in the Real Estate Lease Agreement Information Requirements document on the SREO website at http://sago.tamu.edu/sreo/service.html#LeaseInfoRequirements. Lease form: All lease agreements must be in a form approved by the OGC. Lease tracking: The SREO will maintain a database of all lease agreements, of which a copy is required by this regulation to be provided to SREO. The purpose of the database is to track component leasing and provide a cohesive depiction of the leasing activity of the System.
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3.3

3.4

3.5

3.6

3.7 3.8

41.05.03: Acquisition and Disposition of Real Property through Leasing and Rental Agreements

3.9

Lease dispute: A dispute arising over a lease agreement, which is not resolved at the component level, should be directed to the SREO for assistance. ***************

CONTACT OFFICE: HISTORY:

System Real Estate Office New Regulation

Section 41 Rules

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