Real Property Leases - Buildings and Land | KCTCS

Administrative Procedures

Real Property Leases - Buildings and Land

Policy Number: 5.2.13-P

Current Effective Date: 10/04/2018

Original Effective Date: 06/05/2019

Revision Dates: 10/04/2018

Revision Number: 0

Revision Summary:

Responsible Official: Director of Asset Management

References:

1. Purpose

To describe KCTCS guidelines and Kentucky Revised Statutes (KRS) requirements controlling the lease of real property (buildings and land).

2. Scope

This procedure applies to all KCTCS colleges, the Kentucky Fire Commission, and Kentucky Board of Emergency Medical Services.

3. Lease Guidelines

3.1

General Lease Guidelines

  1. KCTCS may lease state-owned or private property within the guidelines of Kentucky Revised Statutes (KRS).
  2. AKCTCS lease agreement must be completed for new-leased space.
    1. A Memorandum of Agreement (MOA) is only allowable for the renewal of existing space with a public entity/non-profit that has always been governed by an MOA, for KCTCS space leased to a public entity/non-profit, or in situations deemed appropriate by the KCTCS Asset Management Office (AMO).
  3. All leases and lease renewals, whether free of charge or including a cost per square foot and/or utility-maintenance costs, must have the KCTCS Vice President for Administrative Services prior written approval.
  4. Leases involving an annual rental of $200,000 more will be reported to the Capital Projects and Bond Oversight Committee after the proposed lease terms have been negotiated, but before lease execution.

3.2

Leases will have a June 30 expiration date and include the KCTCS right to cancel the lease upon 30 days-notice in writing.

  1. Leases can be automatically extended with the same terms and conditions for further periods of 12 months, not to exceed seven (12) month renewal periods.
  2. KCTCS leases and MOAs will not include language that holds harmless and indemnifies the other party.
  3. All leases will be communicated to theKCTCS Board of Regents by theAMO through an annual report.
    1. The report may be reported as a part of the Annual Operating Budget and/or separate Facilities Support Services Report.

4. New Leases

4.1

Process to lease space

  1. A FM83, Space Request form will be submitted to the KCTCS Asset Management Office (AMO) prior to occupying new space and should be signed by the college President or Business Dean.
  2. The college President or designee (i.e., chief business officer) must email the KCTCS Vice President for Administrative Services, requesting approval to proceed with a lease.
  3. Privately owned space requires advertising in a local paper and a sealed bid opening by the Asset Management Office (AMO). 
    1. Contact with a private owner concerning potential space is not permitted prior to the bid opening other than to notify the owner an ad is being placed.
  4. Upon the opening of bids, the college is required to view all properties meeting the requirements of the advertisement.
  5. Once a space is selected to lease, the AMO will execute the appropriate agreements.

5. Lease Modifications, Renewals, and Cancellations

5.1

Any change to the terms of a KCTCS Lease Agreement requires completion of a Lease Modification Agreement by the AMO.

  1. Leases governed by an MOA will be revised by completion of a new MOA or an Addendum to the MOA.

5.2

Beginning March 1 of each fiscal year, the AMO will review active leases to determine those to be renewed or cancelled.

5.3

Lease cancellations to property owners must be provided in writing, at least 30 days prior to the date scheduled to vacate the space.

6. Lease Payments

6.1

Building leases with strictly janitorial, utility, or phone/internet charges will be paid at the college level.

  1. Base rent charges will be paid out of the PeopleSoft Asset Management module.

6.2

Lease payments are processed monthly, quarterly, per semester, or annually as dictated by the lease agreement.