Leasing of Real Property

Policy

The Office of Planning and Special Projects is responsible for securing all leased property for the University. The office is also responsible for the renting out and leasing of University real property (commonly referred to as "lease-outs"). The University will follow applicable State of South Carolina laws, rules, and regulations in all leasing activity. The University's procedures are structured to meet the requirements of the Commission on Higher Education, and the State Budget and Control Board.

Procedures for Real Property Lease Agreements When University is Lessee

I. Required Approvals

Responsibility for investigating available space and final approval relating to the leasing of real property rests with the State Budget and Control Board (B&CB). The B&CB's General Services Leasing Unit Office is required by law to approve all University leases of real property except exempt leases. (An exempt lease is defined as a lease of non-University owned real property for less than three months in a single fiscal year or for a total cost of less than $25,000 in a single fiscal year. The University Vice President for Finance and Administration is delegated authority to approve and execute exempt leases.) This includes the renewal of existing leases. In addition, University leases must be reviewed by and submitted to the B&CB's Division of General Services and the State Commission on Higher Education. For capital leases and major leases, ($1 million over five years) final approval of B&CB is further dependent on action by the Joint Bond Review Committee (Joint Legislative Committee). MUSC Board of Trustee Policy requires prior approval by the Board of leases where the value exceeds $50,000 for the term of the lease including options. Board Policy requires the reporting of all nonexempt leases to the Board at regularly scheduled Board meetings.

II. Time for Approval

The process for obtaining required approvals can be quite lengthy. Each of the approving entities operates on a different meeting schedule. Each also delegates different levels of authority to its staff. Even the simplest lease requiring approvals by the MUSC Board of Trustees, Commission on Higher Education (CHE), Joint Bond Review Committee (JBRC), and Budget and Control Board will take an absolute minimum of three months to execute. A more realistic time frame for planning purposes is six months. A complex and/or capital lease could take as long as nine months to traverse the full approval process.

ADVANCE DETERMINATION OF NEEDS

When it is necessary for the University to lease space from outside, the Office of Planning and Special Projects should be notified nine months in advance of the date the property is needed. Staff will be assigned to provide instructions and work with you through the final execution of the lease.

III. Procedures

Leases Exceeding $25,000 (Annually)

1. All lease requests shall be forwarded to the Director of the Office of Planning and Special Projects. Each request is to consist of:
• A completed but unsigned copy of the Space Allocation Form and the Lease Criteria Form. Copies of these forms are available here for your convenience.
• A narrative statement of justification that fully explains why space must be rented.
2. After informal review by the Vice President for Finance and Administration, the Office of Planning and Special Projects forwards the request to the General Services Leasing Unit, State Budget and Control Board.
3. Using the specifications provided, the General Services Leasing Unit will send out a request for proposals on available rental space, including specific locations suggested by the University. In consultation with the General Services Leasing Unit, the University will select a suitable space and give its written justification of selection to General Services.
4. The Offices of Occupational Safety and Health and Engineering and Facilities will inspect the Property to ensure the proposed use is code compliant and that air quality is satisfactory.
5. The Property Management Office will prepare a "Standard Governmental Lease" for approval by the lessor.
6. Concurrently with No. 5, the Office of Planning and Special Projects will prepare and submit materials seeking the approval of the Board of Trustees and Commission on Higher Education, as applicable.
7. When the approved lease is signed and returned by the lessor, the Office of Planning and Special Projects will forward the lease to the University Legal Office for review.
8. Following Board of Trustees, CHE, and JBRC approvals as applicable, the Office of Planning and Special Projects will submit the lease to the Vice President for Finance and Administration for signature.
9. The Office of Planning and Special Projects will send the lease and a "Request for Budget Approval" to the University Budget Office.
10. The Office of Planning and Special Projects transmits the approved "Request for Budget Approval" and the lease to the Budget and Control Board's Property Management Office. After approving the lease, the General Services Leasing Unit returns the lease, the "Request for Budget Approval", and the approved "Lease Payment Authorization" to the Office of Planning and Special Projects.
11. The Office of Planning and Special Projects will prepare a "Purchase Requisition" for the lease and transmit the "Purchase Requisition", the lease, the "Lease Payment Authorization", and the "Request for Budget Approval" to Purchasing for the establishment of a blanket purchase order. An IIT will also be needed from the department paying for the lease.
12. The requesting University department will be notified by copy of the signed lease agreement that final approval has been received.

Leases Less than $25,000 (Annually)

1. All lease requests shall be forwarded to the Director of the Office of Planning and Special Projects. Each request is to consist of:
• A completed but unsigned copy of the State's Space Allocation and Lease Criteria Form. Copies of these forms are available here for your convenience.
• A narrative statement of justification that fully explains why space must be rented.
2. It is the responsibility of the Office of Planning and Special Projects to identify potential rental properties to meet the defined need.
3. Potential properties will be reviewed with the requester to select those for preview.
4. It is the responsibility of the Office of Planning and Special Projects to handle all communications, appointments, and negotiations with potential lessors.
5. Once property has been previewed and accepted by the requester, the Office of Planning and Special Projects will have the Offices of Occupational Safety and Health and Engineering and Facilities inspect the property to ensure its intended use is code compliant and air quality is satisfactory.
6. The Office of Planning and Special Projects will negotiate a lease contract using a "Standard Governmental Lease" form.
7. Once the proposed lease is signed by the lessor, it will be submitted to the University Legal Office for review.
8. The lease will then be presented to the Vice President for Finance and Administration for signature. The requester will be notified by copy of the signed lease agreement that final approval has been received. Occupancy can then occur.
9. The Office of Planning and Special Projects will forward the lease to the State Budget and Control Board.
10. The Office of Planning and Special Projects will prepare a "Purchase Requisition" for the lease and transmit the "Purchase Requisition" and lease to Purchasing for establishment of a blanket purchase order. An IIT will also be needed from the department paying for the lease.

Lease Renewals

1. The Office of Planning and Special Projects is responsible to contact each tenant one year in advance of a lease's termination.
2. The tenant is responsible, no later than nine months prior to lease termination, to forward in writing to the Office of Planning and Special Projects its intent to renew or terminate upon expiration the current lease.
3. The Office of Planning and Special Projects will proceed to notify the lessor of the University's intent. A copy of the letter of intent will also be sent to the General Services Leasing Unit.
4. The Office of Planning and Special Projects will, in the case of renewals or re-negotiation, adhere to the aforementioned University lease policies and procedures.
5. In the event of lease termination, the occupants will vacate the leased space no later than the date of lease termination.
6. It is responsibility of the tenant to leave the property in the condition as described in the lease.