PUR 403–01: Off-Campus Property Leases
To manage the process of leasing space off-campus
Arizona Board of Regents Policy Manual - 7-306
Purchasing and Business Services
Any lease of off-campus real property for any department and from any fund source
|Note:||If sponsored grant or contract funds are to be used, contact the sponsored projects officer to determine agreement requirements before entering into any proposed lease.|
A real property lease is a complex legal document involving significant legal risk to the university and a significant obligation of a department’s funds. The negotiation and execution of real property leases are handled by Real Estate Acquisition and Support Services as the source of expertise in understanding of the local rental market, familiarity with technical real property terms, experience in negotiating leases, and compliance with Board of Regents’ requirements.
University departments lease space off-campus when:
This policy and procedure assumes that a department seeking a lease has received approval from its respective vice president and that a lease is necessary under particular circumstances. It further assumes that the department has decided that a lease is a better option than buying a facility. Once these decisions are made, this policy and procedure outlines the steps to be taken to obtain the lease.
The user department must fund the total costs of using off-campus space. The costs included in base rent typically include minor tenant improvements to the space, maintenance charges, insurance, utilities, and custodial services.
Costs that are not included in base rent are usually telephone equipment and service, computer lines, major improvements and remodeling, furniture, signage, and moving expenses. Note that considerable telecommunications costs are involved in providing the capability to dial five-digit internal telephone numbers and access university computing services from an off-campus location.
Note also that many aspects of a lease are negotiable and that such things as maintenance, utilities, and custodial services may be provided by the landlord, by a university department, or by a third party.
Regardless of how these services are provided, the user department is responsible for paying for them. If such services are provided by the landlord, these costs will be reflected in the lease payment; if provided by a university department, they will be charged back to the user department; and if provided by a third party, the user department should take action to ensure that all needed services are coordinated to meet the expected move-in date.
The assistant director for Real Estate Acquisition and Support Services will negotiate the lease with the prospective landlord, review and obtain the necessary approvals for the lease format and language, obtain the user department’s approval of the lease terms, obtain the Board of Regents’ approval when needed, obtain the associate vice president for Administration and Finance’s approval and signature, keep a copy of the lease on file, handle any lease questions or discrepancies, and act as a liaison between the user department and the landlord.
Because real property leases are negotiated agreements and involve one or more real properties that have been selected for their location and features, Purchasing and Business Services does not usually become involved in the lease negotiation itself. Purchasing and Business Services does, however, handle the buying of goods and services associated with the lease. Thus, the purchase of furniture or the securing of a third-party custodial contract is handled through Purchasing and Business Services.
Purchasing and Business Services reviews RXs submitted for rent payments made to a landlord under a lease.
For on-campus facilities, the Department of Facilities Management provides building maintenance, grounds maintenance, building repair, utilities, and custodial service. Such services are not provided for off-campus leased space. In rare cases, a user department may be able to contract for grounds maintenance and custodial services from the Department of Facilities Management for lease facilities adjacent to the campus.
Telecommunication Services may be able to provide reimbursable telephone and computer access services to off-campus leased space. The user department should contact Telecommunication Services to determine the feasibility and cost of providing such services to the proposed lease space.
Police services for off-campus leases are provided by the municipality in which the leased premises are located. When the leased premises are adjacent to one of the campuses and sufficient parking is not available at the leased premises, university employees will park in their assigned on-campus lots and walk to the leased premises.
The procedure for initiating an off-campus lease is on the Purchasing and Business Services Web site.