DEPARTMENT OF PERSONELL AND ADMINISTRATION State Buildings Division LEASING REAL PROPERTY ON BEHALF OF STATE GOVERNMENT 1 CCR 102-1 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ I. Statement of Basis and Purpose A. On July 1, 1979, the General Assembly transferred the powers, duties and functions related to State buildings to the Department of Administration from the Office of State Planning and Budgeting. One of those responsibilities was that of negotiating and executing real property leases on behalf of State government as provided in 24-30-1303 (1)(a), C.R.S. 1973, as amended. Responsibility for administration of the above statute is assigned to the State Buildings Division. Promulgation of certain rules was deemed necessary to administratively carry out these responsibilities. These rules will apply principally to each State agency that presently leases or desires in the future to lease land, buildings, office or other space.

B. The purpose of these rules is:

1. 1. To obtain more favorable leases for the State by:
   1. a. Providing agencies with the services of experienced lease negotiators;
   2. b. Creating a single leasing entity which has significant presence in the real estate leasing market;
   3. c. Developing a more positive image in the real estate community.
2. 2. To protect agencies from agreeing to contract terms not in their best interest or not competitive in the marketplace.
3. 3. To allow for the possible advantage of negotiating master leases to provide for the needs of several agencies in one building.
4. 4. To provide an organized format for accomplishing the State's overall real property leasing function by:
   1. a. Providing published instructions on how to obtain lease space;
   2. b. Providing an administrative method to most effectively and efficiently handle the statutory directives within the resource constraints of the State Buildings Division;
   3. c. Providing an avenue for state office space planning, especially in Metro-Denver;
   4. d. Creating a single communications point and information source between agencies, brokers, and owners.
5. 5. To insure as much uniformity as practical in lease terms and space planning. Code of Colorado Regulations 1 6. To reduce the number of incorrect, incomplete, and/or unacceptable lease contracts, and to provide an increased awareness of the State Fiscal Rules regarding lease contracts.

II. Leases of Real Property A. Definitions

1.0 Lease

An agreement under which a tenant receives the possession and use of real property for a certain period of time and the landlord receives the payment of rent and/or the performance of other conditions. For the purposes of these rules, the word “lease” is meant to include sub-leases and inter-agency leases.

2.0 Lessor

The party who conveyed a right or estate in realty to the lessee under a lease; commonly referred to as the landlord.

3.0 Lessee

The party who possesses a right or estate in realty, holding under a lease; also commonly referred to as the tenant.

4.0 Real Property

Land; the surface of the earth and whatever is erected, growing upon, or affixed to the land; including that which is below it and the space above it; synonymous with “land”, “realty”, and “real estate”. For the purposes of these rules, land under the jurisdiction of the State Board of Land Commissioners and leases of land held by the Division of Wildlife or the Division of Parks and Outdoor Recreation are excepted. (reference 24-30-1303 (2), C.R.S. 1977, as amended)

5.0 Agency

Any State-owned university, college, institution, department or division.

6.0 Agent

Any person, partnership, association, or corporation authorized or employed by another, called the principal (owner), to act for, on behalf of, and subject to the control of the latter.

7.0 Real Estate Broker

As defined in 12-61-101, C.R.S. 1973, as amended.

8.0 Real Estate Marketplace

The intangible arena in which all real estate transactions take place that together form a market.

B. Rules for Leasing Real Property 1.0 Agencies shall notify the Department of Administration, State Buildings Division (SBD), of need and intent to lease real property.

1. 1.1 This notification shall occur prior to any contact or negotiation with potential lessors (building owners or agents) or real estate brokers.

Code of Colorado Regulations 2

1. 1.2 Agencies shall submit their request to lease real property on Form SBD 43–80, “Lease Action Request” which will include complete justification needed to evaluate the staff and equipment to be housed, the program functions to be performed and any special requirements.
2. 1.3 The Lease Action Request shall also be used for requests to renew, terminate, extend or amend a lease contract, or to exercise a lease contract option, or whenever a request will result in a contract document requiring execution by the Department of Administration.

2.0 Upon receipt of a Lease Action Request, SBD will review and evaluate the request as soon as possible and will then contact the requesting agency to discuss its findings.

3.0 Upon approval by SBD, a packet of instructions will be sent to the requesting agency outlining what steps they are to perform and including such information as the physical requirements a building must contain, guidelines for working with real estate brokers, and guidelines in negotiating lease terms in conformance with requirements of the Attorney General and the State Controller, good business practice, and true representation of the Agency's needs and desires.

1. 3.1 SBD will review and approve bids for lease space obtained by the agency and review, assist, and make recommendations during the negotiation of lease terms.
2. 3.2 When deemed appropriate, SBD will become directly involved in the bidding and negotiating process as Leasing agent for the State.

4.0 Agencies must rely on the services of their assigned attorney(s) in the Department of Law if such services are required to draft a contract or review a contract as to form. (Please refer to Chapter 3, State Fiscal Rules)

5.0 Lease contract routing will follow those procedures as provided for in Chapter 3, State Fiscal Rules. _________________________________________________________________________ Editor’s Notes History Code of Colorado Regulations 3