JULY 2005
Finalization of Lease Checklist
Leases procured by VA frequently contain provi-
sions that, when properly exercised, grant VA
certain rights to modify various provisions of the
LEASE ADMINISTRATION
lease. Such rights may include the following:
Lease administration commences with the VA'
s
execution of the lease and encompasses all
Renewal Rights. The right to renew the
activities and actions that are required of the VA
lease for a specified term and at the
as lessee due to the contractual terms of the
negotiated rental rate specified in the lease.
lease, the on-going needs of VA, and the
The ACO prepares and distributes the
judgment of the ACO.
Lease Renewal Notice, GSA Form 2353
[See Appendix A].
Such actions include:
Alteration Rights. The right of the VA to
Timely payment of rent;
utilize its own employees or enter into a
contract with the Lessor or a third party to
Monitoring of the Lessor's actions in
alter the premises within a specified scope
providing services as required by the lease;
and/or contract value.
Amending the lease as required to reflect
rent changes and exercise of rights;
Surrender Rights. The right to surrender
certain portions of the leased premises,
Timely exercise of renewal, expansion, con-
including any storage space or parking
traction, and/or other right;
spaces, at certain specified dates upon
Settling charges related to vacating of the
appropriate notice to the Lessor.
premises; and
Note: The long lead time for this right
Review and administration of claims filed
involves the ability of the VA to completely
pursuant to the Contract Disputes Act of
vacate and release that portion of the leased
1978, as amended (41 U.S.C. 601-613).
premises covered by the "Assignment"
clause. The ACO will have to consider the
Two ACO activities will make the administration
time required to find and prepare new
of the lease both convenient and successful.
space, or conclude the mission of the VA
First is familiarity with the terms of the lease.
unit presently using the space, as well as
Second is identifying milestones and estab-
considering the rights of the Lessor.
lishing a schedule of activities for the life of the
firm-term lease. Annual events in the schedule
Termination Rights. The right to terminate
might include Analysis of Rental Rate Due to
the lease for all or a portion of the premises
Operating Expense Escalations and the annual
under certain stated conditions, such as
Analysis of Real Estate Taxes to determine if a
changes in agency mission.
lump sum payment will be due. Monthly
Activities might include monitoring the Lessor's
Assignment Rights. The right of the VA to
performance on environmental and safety issues
assign the lease, in whole or in part, to
and responsiveness to requests for main-
another entity, usually another Federal
tenance. Quarterly Activities might include an
Agency, but in certain instances to a non-
analysis of vacancy or upcoming vacancy of
Federal third party. The degree to which VA
leased space. Farther into the term of the lease
remains liable under the lease may be
would be activities concerning the lease exten-
negotiable if the "Assignments" clause is not
sion and finally vacating of the premises.
deemed to be mandatory by Regional or
General Counsel.
Allowing adequate lead time for events both puts
the VA into a good position for negotiations of
The ACO must carefully consult with the VAMC
any changes to the lease, and makes the
or Using Service well in advance of the notice
process of expanding, relocating, or moving out
date as stated in the lease so that the decision
run far more smoothly, efficiently, and cost-
regarding whether or not to exercise an option is
effectively.
made in the best interest of VA. The amount of
time required in advance of the notice date will
EXERCISING LEASEHOLD RIGHTS
vary depending upon, among other things, the
VA DESIGN GUIDE
LEASE BASED OUTPATIENT CLINICS
SECTION 9-6
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