POLICY 08:03:08

LEASE PROCEDURES AND GUIDELINES

This policy is consistent with Tennessee Board of Regents Guideline B-026.

Purpose

These guidelines set forth the leasing procedures for all institutions governed by the Tennessee Board of Regents.

Policy/Guideline

1. Approvals Required
   1. Institution as Lessee and Lessor.
      1. 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 $150,000 per
         year shall be approved by the Chancellor, including any amendment or
         cancelation (TBR Policy No. 1:03:02:10).
      2. Documents for all leases and lease amendments with consideration of
         more than $150,000 per year or a term longer than five (5) years shall be
         approved by the State Building Commission in accordance with T.C.A. §
         12-2-115 and the Tennessee Higher Education Commission.
      3. Signatures required include:
         1. The Lessor (signature shall be acknowledged by a notary public).
         2. President of the Institution (signature shall be acknowledged by a
            notary public).
         3. Chancellor or designee.
            1. State Attorney General and Reporter in compliance with
               T.C.A. § 12-2-115.
            2. Commissioner of General Services if procured by
               STREAM.
            3. Governor (this signature is required for lease-outs).
   2. Leases for more than $150,000 per year or for more than five (5) years.
      1. All proposed leasing actions for real property with consideration more
         than $150,000 per year or for a term of more than five (5) years shall be
         submitted to the State Building Commission and the Tennessee Higher
         Education Commission by the Office of Facilities Development,
         Tennessee Board of Regents for review and analysis prior to taking action
         by the institution.
      2. Leases approved during the annual budget review process will not require
         prior approval of the State Building Commission Executive SubCommittee. (SBC Policy)
      3. After review and analysis, the State Building Commission and the
         Tennessee Higher Education Commission shall provide comments to the
         Tennessee Board of Regents. (SBC Policy)
   3. Leases for $150,000 or less per year and for five (5) years or less where the
      institution is the Lessee or Lessor, using one of the following approved forms: the
      Tennessee Board of Regents Standard Lease Agreement, Mutual Use Agreement,
      Transient Use Agreement, or Tenant Use Agreement, shall be approved by:
      1. President of the institution
      2. The Chancellor
   4. Leases for which operating funds will be requested or for more than five (5)
      years.
      1. 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 $150,000 per year, and funding for same is
         requested through state appropriations, shall be approved by the Tennessee
         Higher Education Commission (THEC Policy).
2. Non-Discrimination
   1. Institutions 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 T.C.A. § 4-21-601.
   2. 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
      T.C.A. § 4-21-803.
3. Recording of Leases
   1. Leases in which the institution is the Lessee which require State Building
      Commission approval shall be recorded by the Commissioner of General Services
      in the county or counties where the property is located (per T.C.A. § 12-2-105).
4. Advertising for Leased Space
   1. Where the institution 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 $50,000 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 (Reference T.C.A. § 12-2-114).
      4. Where the space required by the entity has special and unique
         requirements as determined by the Commission.
5. Special and Unique Space
   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 $50,000.
   2. The space to be leased will be let for less than 30 days; will have a total cost of
      $50,000 or less; and is for an auditorium, hearing room, conference or related
      space.
6. Forms and Documentation Required
   1. Submit to the Chancellor one (1) copy each of the following forms at the
      appropriate times described above. Copies of all forms are available from the
      Office of Facilities Development upon request.
      1. Space Action Request Form
         1. One (1) copy required with initial submittal of request for leased
            space.
      2. State University and Community College System of Tennessee (Tennessee
         Board of Regents) standard Lease Agreement Form
         1. Minimum of three (3) copies required after approval has been
            given to enter into a lease agreement.
         2. Use the Tennessee Board of Regents standard Lease Agreement
            Form unless prior approval has been obtained to use any other
            form.
         3. There should be no changes or additions to the standard Lease
            Agreement Form without prior approval.
      3. Statement of Financial Interest for Leased Property
         1. For all leases subject to the State Building Commission approval,
            when the institution 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.
      4. 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, Item 12.
         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.
      5. Space Action Request, Office Space Requirements Analysis, Finance and
         Administration Form RSM-1A
         1. 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.
      6. Supplemental Data Questionnaire, Finance and Administration Form
         RSM-1B
         1. Document space needs on this form and submit with initial
            submittal of request for leased space.
      7. Certification of Funds Available
         1. For all leases subject to State Building Commission approval, a
            letter signed by the President of the institution or the Chancellor
            certifying that funds are available must accompany the lease
            proposal.
         2. Institution Certification of Funds shall be acknowledged and
            certified by Vice Chancellor for Business and Finance.
      8. Summary of Analysis of Lease Proposals Received
         1. If advertising and receipt of lease proposals is performed by the
            institution, a summary of analysis of lease proposals must
            accompany the lease proposals including cost analysis.
      9. Enrollment Projections and Program Documentation
         1. 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.
   2. State Statutes on State Leases & Disposals of Real Property
      1. 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.
         1. T.C.A. § 4-15-102 – State Building Commission – Powers and Duties
         2. T.C.A. § 12-2-112 – Disposal of Surplus Interests in Real Property and
            Energy Resources
         3. T.C.A. § 12-2-114 – State Leases – Procedure
         4. T.C.A. § 12-2-115 – Approval of Lease Instrument where State is Lessee
            or Lessor
         5. T.C.A. § 49-8-111 – Powers Regarding Property
   3. Lease Policies of the State Building Commission
      1. 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 for your information. Copies are available from the Office of Facilities
         upon request.
   Sources
   TBR Guideline B-026; T.C.A. § 49-8-203; All state statutes referenced in this guideline.Adopted by TBR: May 14, 1991
   Revised by TBR: November 5, 1997
   Revised by TBR: February 13, 2007.
   Revised by TBR: November 11, 2015
   Reviewed/Recommended: President’s Council, August 28, 2023
   Approved: President L. Anthony Wise, Jr., August 28, 2023