WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 1 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
Table of Contents
61 - LEASE ADMINISTRATION ..................................................................................... 3
61.1 - File Management .............................................................................................................. 3
61.2 - Post-Occupancy Inspections ............................................................................................. 5
62 - LEGAL INSTRUMENTS .......................................................................................... 5
62.1 - Statement of Lease (Estoppel Letter) ............................................................................... 5
62.2 - Subordination, Nondisturbance, and Attornment Agreement .......................................... 5
62.3 - Change of Ownership ....................................................................................................... 9
62.31 - Evidence of Change .................................................................................................... 9
62.32 - Rent ........................................................................................................................... 17
62.33 - Modifying the Lease ................................................................................................. 17
62.34 - Updating Lease Data and Lease Payments ............................................................... 17
62.4 - Change of Name ............................................................................................................. 17
62.41 - Evidence of Change .................................................................................................. 17
62.42 - Rent ........................................................................................................................... 21
62.43 - Modifying the Lease ................................................................................................. 21
62.44 - Updating Lease Data and Lease Payments ............................................................... 21
62.5 - Assignment of Rents....................................................................................................... 21
62.51 - Evidence of Change .................................................................................................. 21
62.52 - Rent ........................................................................................................................... 22
62.53 - Modifying the Lease ................................................................................................. 22
62.54 - Updating Lease Data and Lease Payments ............................................................... 22
63 - RENTAL DEDUCTIONS ........................................................................................ 22
63.1 - Default by the Lessor...................................................................................................... 22
63.2 - Cure Letter ...................................................................................................................... 23
63.21 - Emergency Situations ............................................................................................... 26
63.3 - Deduction Letter ............................................................................................................. 26
63.4 - Modifying the Lease ....................................................................................................... 29
63.5 - Updating Lease Data and Lease Payments ..................................................................... 29
64 - RENTAL ADJUSTMENTS ..................................................................................... 29
64.1 - Operating Costs Adjustment........................................................................................... 29
64.11 - Calculation ................................................................................................................ 30
64.12 - Commencement Date ............................................................................................... 32
64.2 - Vacant Premises Adjustment .......................................................................................... 32
64.21 - Calculation ................................................................................................................ 32
64.22 - Commencement Date ............................................................................................... 32
64.3 - Real Estate Tax Adjustment ........................................................................................... 32
64.31 - Calculation ................................................................................................................ 32
64.32 - Commencement Date ............................................................................................... 35
64.4 - Modifying the Lease ....................................................................................................... 35
64.5 - Updating Lease Data and Lease Payments ..................................................................... 35
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 2 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
65 - POST-OCCUPANCY ALTERATIONS ................................................................... 35
65.1 - Determine Need .............................................................................................................. 35
65.11 - Special Considerations ............................................................................................. 36
65.2 - Determine Scope ............................................................................................................ 36
65.3 - Determine Who Will Perform Alterations ..................................................................... 36
65.4 - Competition Determination ............................................................................................ 37
65.41 - Within Scope of Lease .............................................................................................. 37
65.42 - Outside the Scope of Lease ...................................................................................... 37
65.5 - NEPA Analysis and Documentation .............................................................................. 38
65.51 - Section 106 of the National Historic Preservation Act Consultation ....................... 38
65.6 - Process to Acquire Alterations ....................................................................................... 39
65.61 - Proposal from Lessor ................................................................................................ 39
65.62 - Competitive Proposal ............................................................................................... 39
65.7 - Modifying the Lease ....................................................................................................... 39
65.8 - Construction of Alterations and Acceptance .................................................................. 40
65.9 - Updating Lease Data and Lease Payments ..................................................................... 40
66 - ENVIRONMENTAL CONDITIONS ........................................................................ 40
67 - DISPUTES ............................................................................................................. 40
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 3 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
61 - LEASE ADMINISTRATION
The term “lease administration” refers to the maintenance that is an integral part of the post
award requirements associated with a lease. The Real Property Leasing Officer (RPLO) and/or
Contracting Officer’s Representative (COR) is responsible for ensuring that Lessors meet their
obligations under the terms and conditions of the lease (see Zero Code, sec. 04.06 - 04.07). The
lease and its attached exhibits, GSA Form 3517 - General Clauses, and GSA Form 3518 Representations and Certifications include the terms and conditions that the Lessor and
Government shall follow. The RPLO and/or the COR shall ensure that the Lessor complies with
the lease by:
1. Regularly reviewing the lease contract,
2. Monitoring daily operation/management and maintenance of leased space,
3. Monitoring and accepting work that the Lessor performs under the lease,
4. Monitoring and accepting services (this includes periodic services) that the Lessor is
obligated to perform under the lease, and
5. Coordinating post award alterations.
61.1 - File Management
The RPLO shall verify that the lease file contains a current copy of the lease contract,
supplemental lease agreements (SLAs), all related files, inspection and performance
documentation, and all general correspondence.
To verify the administrative requirements of the lease, the RPLO should review the checklist
included in exhibit 01.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 4 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
61.1 – Exhibit 01
Checklist for Lease File
FILE MANAGEMENT
1
2
Are the lease file documents maintained in a way that is consistent with the
lease file checklists contained in chapters 20 through 50?
Are the lease and all SLAs in the lease file?
3
Are the files in a common, secure, and accessible location?
4
Are the files organized with an easy-to-understand filing system?
5
Is there a system in place to manage check-out and return of lease files?
6
Is there a process for incorporating new leases into the inventory of existing
leases?
7 Is there a process in place to make certain that leases are meeting security
requirements?
8 Is there a review process for leases meeting energy efficiency and
conservation criteria?
9 Is the Lessor meeting environmental goals? For example, building recycling
plans?
10 For leases that are not fully serviced, do the service and utility contract
periods correspond with lease expiration dates?
11 In fully serviced leases, is the Lessor meeting contract requirements?
12 Are current occupant emergency plans and procedures in place?
13 Are building operation plans current in specifying hours of operations based
on the seasons and in accordance with the outside temperature condition,
including procedures for starting up and shutting down?
14 Are required inspections performed and deficiencies noted with a planned
course of corrective action?
15 Is there a process to follow-up on health, fire protection, and life safety
deficiencies?
16 Is there a process for dealing with expiring leases? See chapter 40, section
48.1 for more information on closing out an expiring lease.
YES
NO
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 5 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
61.2 - Post-Occupancy Inspections
Post-occupancy inspections of leased facilities must be conducted in accordance with the
requirements outlined in Forest Service Handbook (FSH), 7309.11, chapter 40.
62 - LEGAL INSTRUMENTS
An electronic version of the applicable GSA Leasing Desk Guide chapter titled:
“Chapter 17 - Lease Administration”, Part 11, can be accessed at:
http://www.gsa.gov/graphics/pbs/LDG-Ch17-LeaseAdministration_09-19-11_508c_final.pdf.
62.1 - Statement of Lease (Estoppel Letter)
A statement of lease, also known as an estoppel letter, provides the status and terms of the lease
when the lessor or financial institution requests this information (typically before the sale of a
building).
Upon receiving a request for a statement of lease, the RPLO shall provide a copy of the lease, the
terms and conditions, any lease amendments, and any issues with the lessor’s performance
within 30 days after the request is received.
62.2 - Subordination, Nondisturbance, and Attornment Agreement
A subordination, non-disturbance and attornment agreement (SDNA) is actually three
agreements in one. The purpose of the SNDA is to establish three elements that govern what
happens in the event of a foreclosure:
1. Subordination - permits the lender of the property to become superior to the lien of the
lease and the Forest Service agrees that the lease is junior to the lien on the loan.
2. Attornment - creates a contractual bond between the Forest Service and the lender,
and the Forest Service accepts the lender as the new lessor under the same terms and
conditions of the lease.
3. Non-Disturbance - permits the lease to stay in force so long as the Forest Service is
not in default.
Upon receiving a request from the Lessor for an SNDA agreement, the RPLO shall provide the
SNDA agreement to the Lessor within 20 days after the request is received.
A sample SNDA is included in exhibit 01. If the RPLO makes any changes to the sample SNDA
provided in exhibit 01, the RPLO shall submit the SNDA to the Regional Office of General
Counsel (OGC) to review for legal sufficiency.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 6 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.2 - Exhibit 01
Subordination, Nondisturbance and Attornment Agreement
THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
(“Agreement”) is made and entered into as of the 12th day of February___, 2012_____,
by and between XYZ Corp. (Landlord), ABC Bank, that has executed the Agreement below as
lender (“Lender”), and THE UNITED STATES OF AMERICA acting by and through the United
States Forest Service (“Lessee”);
WITNESSETH:
WHEREAS, Lender intends to fund a commercial mortgage loan (the “loan”) to the Landlord
secured by a mortgage or deed of trust (the “Mortgage”) on the land described on Exhibit “A”.
together with present or future improvements (the “Real Property”); and
WHEREAS, the Landlord has demised to the Lessee a leasehold interest under that certain U.S.
Government Lease for Real Property (Lease No. 1234-XXXX) dated as of January 15, 2012
(together with all amendments, options, extensions, and renewals; the “Lease”); and
WHEREAS, as a condition of the Loan’s funding, Landlord will assign its interest in the Lease
to Lender as part of Lender’s security; and
WHEREAS, Lessee desires to enter into this Agreement in order to benefit from the promises by
Lender that are set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants herein
contained, the parties agree as follows:
1. Subordination. In accordance with Paragraph XX of the General Clauses of the Lease,
Subordination, Nondisturbance and Attornment, (48 C.F.R. 552.270-23), the Lessee
acknowledges that the lease is subordinate to the lien of Lender on the Real Property; the
Lender likewise acknowledges that such subordination shall not operate to affect
adversely any right of the Government under the Lease.
2. Attornment. If the Lender forecloses the Loan or acquires title to the Real Property by
deed in lieu of foreclosure, or in any other manner succeeds to the interest of the Lessor
under the Lease, or if the Lender shall take possession of the Leased Premises, the Lessee
shall attorn to the Lender as its Landlord under all of the terms, covenants, and conditions
of the Lease for the balance of the term thereof remaining and any extensions thereof
which may be effected in accordance with any option therefore as set forth in the Lease,
with the same force and effect as if the Lender were the Lessor under the Lease. Such
attornment shall be effective and self-operative immediately upon the Lender’s
succeeding to the interest of the Lessor, whereupon the Lessee shall recognize the
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 7 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.2 – Exhibit 01--Continued
Lender, or any person claiming by through or under the Lender (immediate or remote), as
the lessor under the Lease without the execution of any further instruments on the part of
any of the parties hereto. The Lease shall at all times continue in full force and effect, and
the respective rights and obligations of the Lessee and the Lender upon such attornment
shall be governed by the Lease. However, the Lessee agrees to execute, acknowledge,
and or deliver to Lender any certificate or other instrument that Lender reasonably
requests to confirm such attornment. Likewise, the Lender agrees to execute a Novation
Agreement in the form required by FAR Part 42.12.
3. Nondisturbance. So long as no default by the Lessee has occurred and is continuing,
which default under the terms of the Lease would give the Landlord (or the Lender as
successor in interest to the Lease) the right to terminate the lease, Lender will not disturb
the Lessee’s quiet enjoyment or possession of the demised premises.
4. Assignment of Rental Stream. In accordance with Paragraph XX of the General
Clauses of the Lease, Assignment of Claims, (48 C.F.R. 52.232-23) the Lessor may
assign its rights to be paid to the Lender. Following such assignment, to be made in
accordance with the Assignment of Claims Act, as amended, 31 USC 3727, and
following the execution of a Supplemental Lease Agreement changing the named Payee
in the Lease, the Lessee shall pay all rent and all additional rent to the Lender. Such
assignment shall not be deemed to (a) cause the Lender to succeed to or to assume any
obligations or responsibilities as the landlord under the Lease, all of which shall continue
to be performed and discharged solely by the Landlord, or (b) relieve Landlord of any
obligations under the Lease. Lessee’s compliance with the assignment of rent shall not be
deemed to violate the Lease, and Landlord hereby agrees that Lessee shall be entitled to
full credit under the Lease for any Rent paid to Lender under an assignment of claims to
the same extent as if such Rent were paid directly to the Landlord. Landlord shall look
solely to the Lender with respect to any claims Landlord may have on account of an
incorrect or wrongful assignment of claims payment.
5. Advanced payments. No prepayment of rent or additional rent due under the Lease
shall be made by the Lessee to any party.
6. Modification; Waiver; Successors and Assigns. No provision of this Agreement may
be modified, waived or terminated except in accordance with a written instrument
executed by the party against whom enforcement of such modification, waiver, or
termination is sought. This Agreement shall be binding on, and shall inure to the benefit
of, the parties’ successors and assigns.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 8 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.2 – Exhibit 01--Continued
IN WITNESS WHEREOF, each of the undersigned have caused its duly authorized
representative to execute this Subordination, Nondisturbance, and Attornment, Agreement as of
the date first written above.
LANDLORD: The XYZ Limited Partnership
By:_________________________________
Name:______________________________
Title:_______________________________
LESSEE: The United States of America By and Through the United States Forest Service
By: _________________________________
Name: _______________________________
Title: ________________________________
LENDER: ABC Bank, Inc.
By: _________________________________
Name: _______________________________
Title: ________________________________
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 9 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.3 - Change of Ownership
If during the term of the lease, title to the property is transferred, or the lease is assigned, the
Lessor and its Successor shall comply with the requirements described below (FAR 42.12).
62.31 - Evidence of Change
Upon receiving notice of an ownership change, or the lease is assigned, the RPLO shall request
that the Lessor (Transferor) and its Successor (Transferee) execute a Novation Agreement to
transfer the Transferor’s rights and obligations under the lease to the Transferee. The Transferor
and Transferee shall sign and notarize three copies of the proposed Novation Agreement and
submit to the RPLO for further review.
A sample Novation Agreement is included in exhibit 01.
If ownership of the property is transferred by death of the Lessor, the RPLO shall obtain a copy
of the will or letter of administration identifying the new Lessor(s).
In addition to the proposed Novation Agreement, the RPLO shall obtain the following items
from the Transferor and the Transferee:
1. An authenticated copy of the instrument effecting the transfer of the asset, such as a
bill of sale, certificate of merger, contract, warranty deed, agreement, or court decree.
2. A letter from the new Lessor (Transferee) addressed to the Forest Service stating it
“hereby assumes, approves, and adopts all the above aforementioned leases by the and
between the United States of America acting by and through the Forest Service and
previous Lessor (Transferor), dated _______________, 20_________, and agrees to be
bound by its terms as of (date of property transfer).
3. A letter from the previous Lessor (Transferor) addressed to the Forest Service waiving
all rights under the lease with the United States of America acting by and through the
Forest Service, dated ________, 20___________, except unpaid rent through a specific
date if applicable.
4. The opinion of legal counsel for the Transferor and Transferee stating that the transfer
was property effected under applicable law and the effective date of transfer assignment.
5. Documentation regarding the new Lessor’s (Transferee’s) organizational structure.
a. If the Transferee is a corporation, provide a certificate of good standing from the
State of incorporation. If the State of incorporation is different from the State in
which the leased property is located, provide a certificate of authority to transact
business in the State in which the property is located.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 10 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
b. If the Transferee is a general partnership, which is required to register with the
State, provide a certificate of good standing from the State. If the partnership is not
required to register, provide a letter signed by an authorized general partner attesting
to the partnership’s continued existence. Provide a copy of the partnership agreement
and all amendments.
c. If the Transferee is a limited partnership, provide a certificate of limited
partnership. If the partnership is organized in a State other than the one in which the
property is located, also provide a copy of the approved application for admission to
transact business in that State. Provide a copy of the limited partnership agreement
and all amendments.
d. If the Transferee is a limited liability company, provide articles of organization,
together with all amendments, and a certificate of good standing for the State in
which the company is organized and the State in which the property is located, if
different.
6. Evidence of individuals authorized to sign lease documents and the letter adopting the
lease.
a. Sole proprietor/single owner, provide a signed declaration by the individual.
b. General or Limited Partnership, provide the partnership agreements and all
amendments. In the case of a limited partnership, also provide a Certificate of
Limited Partnership.
c. Corporation, provide a current resolution or other document from the Board of
Directors, certified by the Board secretary, specifying who has the authority to bind
the company to lease transactions.
d. Limited liability company, provide the operating agreement and all amendments.
Provide a statement from an authorized person(s) from the LLC certifying the current
members and/or managers of the LLC and certifying who has the authority to bind the
LLC. Provide a resolution or other statement from the members of the LLC
authorizing the sale or purchase of the property and adoption of the lease.
7. A letter from the Transferee identifying the proper legal name(s) and address(es) of
the Transferee and payee.
8. Evidence of the Transferee’s capability to perform the lease/contract, including:
a. A copy of the Transferee’s most recent financial statement,
b. A signed Representations and Certifications form (GSA Form 3518), and
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 11 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
9. Any other relevant information requested by the RPLO.
If the RPLO makes any changes to the sample Novation Agreement provided in exhibit 01, the
RPLO shall submit the Novation Agreement to the Regional OGC to review for legal
sufficiency. The RPLO shall also review the remaining documents to determine whether transfer
of the lease is in the best interest of the Government.
If the RPLO determines that recognizing the Transferee as the Lessor will not be in the best
interest of the Government, the Transferor shall remain fully liable to the Government for the
Transferee's performance of obligations under the lease, notwithstanding the transfer. Under no
condition shall the Government be obligated to recognize the Transferee as its Lessor until (a)
the payment of rent has commenced; and (b) any amounts due and owing to the Government
under the lease have been paid in full or completely set off against the rental payments due under
the lease.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 12 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.31 – Exhibit 01
Sample Novation Agreement
ABC Company (Transferor), a partnership duly organized and existing under the laws of the
State of Virginia with its principal office in Arlington: the XYZ Company (Transferee), a
limited liability company duly organized and existing under the laws of the State of Virginia
with its principal office in Arlington; and the UNITED STATES OF AMERICA (Government)
enter into this agreement as of, February 14, 2012.
(a) THE PARTIES AGREE TO THE FOLLOWING FACTS:
(1) The Government, represented by various Contracting Officers of the Forest Service has
entered into a contract with the Transferor, namely: Lease No. XXXXXX. The term "the
contract," as used in this Agreement, means the above contract, amendments, and purchase
orders relating to this contract and all other modifications, made between the Government and
the Transferor before the effective date of this Agreement (whether or not performance and
payment have been completed and releases executed if the Government or the Transferor has any
remaining rights, duties, or obligations under this contract and purchase orders). Included in the
term "the contract" are also all modifications made under the terms and conditions of this
contract and purchase orders between the Government and the Transferee, on or after the
effective date of this Agreement.
(2) As of January 15, 2012, the Transferor has transferred to the Transferee all the assets of
the Transferor by virtue of a bill of sale between the Transferor and the Transferee.
(3) The Transferee has acquired all the assets of the Transferor by virtue of the above transfer.
(4) The Transferee has assumed all obligations and liabilities of the Transferor under the
contract by virtue of the above transfer.
(5) The Transferee is in a position to fully perform all obligations that may exist under the
contract.
(6) It is consistent with the Government's interest to recognize the Transferee as the successor
party to the contract.
(7) Evidence of the above transfer has been filed with the Government.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 13 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.31 – Exhibit 01—Continued
(b) IN CONSIDERATION OF THESE FACTS, THE PARTIES AGREE THAT BY THIS
AGREEMENT
(1) The Transferor confirms the transfer to the Transferee, and waives any claims and rights
against the Government that it now has or may have in the future in connection with the contract.
(2) The Transferee agrees to be bound by and to perform each contract in accordance with the
conditions contained in the contract. The Transferee also assumes all obligations and liabilities
of, and all claims against, the Transferor under the contracts as if the Transferee were the original
party to the contract.
(3) The Transferee ratifies all previous actions taken by the Transferor with respect to the
contract, with the same force and effect as if the action had been taken by the Transferee.
(4) The Government recognizes the Transferee as the Transferor's successor in interest in and
to the contract. The Transferee by this Agreement becomes entitled to all rights, titles, and
interests of the Transferor in and to the contract as if the Transferee were the original party to the
contracts. Following the effective date of this Agreement, the term "Contractor," as used in the
contract shall refer to the Transferee.
(5) Except as expressly provided in this Agreement, nothing in it shall be construed as a waiver
of any rights of the Government against the Transferor.
(6) All payments and reimbursements previously made by the Government to the Transferor,
and all other previous actions taken by the Government under the contract, shall be considered to
have discharged those parts of the Government's obligations under the contract. All payments
and reimbursements made by the Government after the date of this Agreement in the name of or
to the Transferor shall have the same force and effect as if made to the Transferee, and shall
constitute a complete discharge of the Government's obligations under the contract, to the extent
of the amounts paid or reimbursed.
(7) The Transferor and the Transferee agree that the Government is not obligated to pay or
reimburse either of them for, or otherwise give effect to, any costs, taxes, or other expenses, or
any related increases, directly or indirectly arising out of or resulting from the transfer or this
Agreement, other than those that the Government in the absence of this transfer or Agreement
would have been obligated to pay or reimburse under the terms of the contract.
(8) The Transferor guarantees payment of all liabilities and the performance of all obligations
that the Transferee (i) assumes under this Agreement or (ii) may undertake in the future should
this contract be modified under their terms and conditions. The Transferor waives notice of, and
consents to, any such future modifications.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 14 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.31 – Exhibit 01—Continued
(9) The contract shall remain in full force and effect, except as modified by this
Agreement. Each party has executed this Agreement as of the day and year first above written.
ABC COMPANY
By____________________________________
Title__________________________________
Date__________________________________
XYZ COMPANY
By____________________________________
Title___________________________________
Date___________________________________
UNITED STATES OF AMERICA
By___________________________________
Title__________________________________
Date_________________________________
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 15 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.31 – Exhibit 01--Continued
ACKNOWLEDGMENT
STATE OF_________________________)
) SS:
COUNTY OF_______________________)
On this ________________ day of _________________, 20___________, before me
_______________________________________, a Notary Public in and for
of
, personally appeared
County, State
, and known to me (or satisfactorily proved to me on
the oath of _______________________________, a competent and creditable witness for that
purpose by me duly sworn), to be the person described in and who executed the foregoing
instrument as general partner, on behalf of the
, a partnership, and who duly
acknowledged to me that he executed the same freely and voluntarily and for the uses and
purposes therein mentioned.
________________________________________
Notary Public for the State of_______________
Residing in_______________________________
My commission expires____________________
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 16 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.31 – Exhibit 01--Continued
ACKNOWLEDGMENT
STATE OF_________________________)
) SS:
COUNTY OF_______________________)
On this ________________ day of _________________, 2003_________, before me
_______________________________________, a Notary Public in and for Weber
State of Utah
, personally appeared Charlene E. Reed
County,
, Contracting Officer, Forest
Service, U.S. Department of Agriculture, the signer of the within instrument, who acknowledged
to me that she executed the foregoing instrument, by duly delegated authority.
________________________________________
Notary Public for the State of_______________
Residing in_______________________________
My commission expires____________________
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 17 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.32 - Rent
If ownership of the property changes or the lease is assigned, the rent shall continue to accrue,
subject to the Government's rights as provided for in the lease. However, the Government's
obligation to pay rent to the Transferee shall be suspended until the Government has received all
of the information described in section 62.31. So long as any delays in effecting the recognition
of Transferee as Lessor are not the responsibility of the Government, no interest shall accrue on
suspended rent.
62.33 - Modifying the Lease
If the RPLO determines that the transfer of the lease is in the best interest of the Government, the
RPLO shall sign and notarize all three copies of the proposed Novation Agreement and modify
the lease to include the fully executed Novation Agreement and the signed GSA Form 3518,
Representations and Certifications.
The RPLO shall send two SLAs, including the fully executed Novation Agreement and the
signed GSA Form 3518, to the Transferee for signature. Upon receipt of the Transferee’s signed
and dated SLAs, the RPLO shall ensure that no changes have been made, then sign and date both
copies. The RPLO shall insert a fully executed SLA in the lease file and return the other fully
executed SLA to the Transferee using a transmittal letter.
The RPLO shall also send a copy of the fully executed Novation Agreement to the Transferor.
62.34 - Updating Lease Data and Lease Payments
See chapter 40, section 48 for details on updating lease data in Infra.
See chapter 40, section 48 for details on providing lease payment data to the Albuquerque
Service Center, Service Wide Accounts Maintenance staff (ASC-SWAM).
62.4 - Change of Name
If during the term of the lease the Lessor changes its legal name, the Lessor shall comply with
the requirements described below (FAR 42.12).
62.41 - Evidence of Change
Upon receiving notice of a legal name change, the RPLO shall request that the Lessor execute a
Change of Name Agreement to reflect the name change as long as the Government’s and the
Lessor’s respective rights and obligations remain unaffected. The Lessor shall sign and notarize
two copies of the proposed Change of Name Agreement and submit to the RPLO for further
review.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 18 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
A sample Change of Name Agreement is included in exhibit 01.
In addition to the Change of Name Agreement, the RPLO shall obtain the following items from
the Lessor:
1. The document effecting the name change authenticated by a proper official of the
State having jurisdiction,
2. The opinion of the Lessor’s legal counsel stating that the change of name was properly
effected under applicable law and showing the effective date, and
3. A signed Representations and Certifications form (GSA Form 3518).
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 19 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.41 – Exhibit 01
Sample Change of Name Agreement
The ABC Corporation (Lessor), a corporation duly organized and existing under the laws
of the State of Virginia, and the United States of America (Government), enter into this
Agreement as of, February 14, 2012 (this date must reflect the date when the change of
name became effective under applicable State law).
(a) THE PARTIES AGREE TO THE FOLLOWING FACTS:
(1) The Government, represented by various Contracting Officers of the Forest Service
has entered into a contract with the Lessor, namely: Lease No. XXXXXXXXX. The
term “the contract,” as used in this Agreement, means the above contract, amendments
and purchase orders relating to this contract and all other modifications, made between
the Government and the Lessor before the effective date of this Agreement (whether or
not performance and payment have been completed and releases executed if the
Government or the Lessor has any remaining rights, duties, or obligations under this
contract and purchase orders).
(2) The ABC Corporation, by an amendment to its certificate of incorporation, dated
February 14, 2012, has changed its corporate name to XYZ Corporation.
(3) This amendment accomplishes a change of corporate name only and all rights and
obligations of the Government and of the Lessor under the contract are unaffected by this
change.
(4) Documentary evidence of this change of corporate name has been filed with the
Government.
(b) In consideration of these facts, the parties agree that—
(1) The contract covered by this Agreement are amended by substituting the name “ABC
Corporation” for the name “XYZ Corporation” wherever it appears in the contract;
and
(2) Each party has executed this Agreement as of the day and year first above written.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 20 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.41 – Exhibit 01--Continued
UNITED STATES OF AMERICA
By _______________________________________________
Title _____________________________________________
Date _____________________________________________
ABC CORPORATION
By _______________________________________________
Title _____________________________________________
Date _____________________________________________
[Corporate Seal]
CERTIFICATE
I, ___________, certify that I am the Secretary of ABC Corporation; that ___________,
who signed this Agreement for this corporation, was then _____________ of this
corporation; and that this Agreement was duly signed for and on behalf of this corporation
by authority of its governing body and within the scope of its corporate powers. Witness my
hand and the seal of this corporation this ________ day of ____________ 20___.
By _______________________________________________
[Corporate Seal]
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 21 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.42 - Rent
If the Lessor changes its legal name, the rent shall continue to accrue, subject to the
Government's rights as provided for in the lease.
62.43 - Modifying the Lease
The RPLO shall execute the Change of Name Agreement on behalf of the Government and
modify the lease to include the Change of Name Agreement.
The RPLO shall send two SLAs, including the fully executed Change of Name Agreement and
the signed GSA Form 3518, to the Lessor for signature. Upon receipt of the Lessor’s signed and
dated SLAs, the RPLO shall ensure that no changes have been made, then sign and date both
copies. The RPLO shall insert a fully executed SLA in the lease file and return the other fully
executed SLA to the Lessor using a transmittal letter.
62.44 - Updating Lease Data and Lease Payments
See section 62.34 for more details.
62.5 - Assignment of Rents
If during the term of the lease, the Lessor requests that rental payment be sent to a designated
person or entity, the Lessor shall comply with the requirements described below.
62.51 - Evidence of Change
Upon receiving notice of a rental payment change request, the RPLO shall require the Lessor to
execute a written assignment authorizing and directing the Government to make rental payments
to the designated person or entity, in lieu of making rental payments to the Lessor. The Lessor
shall sign and notarize the written assignment and submit to the RPLO for further review.
The RPLO shall review the written assignment to ensure that it is executed by a properly
Authorized Officer and that the Payee’s name and the location of the payments are clear and
unambiguous.
In addition to the written assignment, the RPLO shall obtain a signed Representations and
Certifications form (GSA Form 3518) from the Lessor.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 22 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
62.52 - Rent
If the Lessor submits a request directing the Government to make rental payments to a
designated person or entity, the Government's obligation to pay rent to the designated person or
entity (instead of to the Lessor) shall not commence until the RPLO has received the information
described in section 62.51. Instead, the Government will continue to make rental payments to
the Lessor.
62.53 - Modifying the Lease
The RPLO shall modify the lease to include the written assignment authorizing and directing the
Forest Service to make rental payments to the designated person or entity.
The RPLO shall send two SLAs, including the written assignment and the signed GSA Form
3518, to the Lessor for signature. Upon receipt of the Lessor’s signed and dated SLAs, the
RPLO shall ensure that no changes have been made, then sign and date both copies. The RPLO
shall insert a fully executed SLA in the lease file and return the other fully executed SLA to the
Lessor using a transmittal letter.
62.54 - Updating Lease Data and Lease Payments
See section 62.34 for more details.
63 - RENTAL DEDUCTIONS
63.1 - Default by the Lessor
When a performance deficiency is identified, the RPLO shall contact the Lessor and issue a
verbal request(s) to correct the problem. The RPLO shall document all verbal requests in the
lease file.
If the Lessor does not respond to the RPLO’s verbal request(s), the RPLO shall send a written
request to correct the problem. The RPLO shall document all written requests in the lease file.
An electronic version of the applicable GSA Leasing Desk Guide chapter titled: “Chapter 17 –
Lease Administration”, Part 7, can be accessed at: http://www.gsa.gov/graphics/pbs/LDG-Ch17LeaseAdministration_09-19-11_508c_final.pdf.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 23 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
63.2 - Cure Letter
If the Lessor does not respond to the RPLO’s verbal or written request(s) to correct a
performance deficiency, the RPLO shall send a “cure” letter to the Lessor notifying the Lessor of
the failure to correct the problem. The cure letter must provide the Lessor with sufficient time to
correct the performance deficiency (this includes ordering parts as needed to complete the
repairs) and set a date for inspection to determine whether the problem has been fixed. The
RPLO should send the letter by certified mail, return receipt requested.
A sample cure letter is included in exhibit 01.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 24 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
63.2 – Exhibit 01
Sample Cure Letter
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
February 22, 2012
John Smith
123 Needleleaf Way
Paradise, VA 12345
Dear Mr. Smith:
This is in reference to deficiencies in the property leased from you by the United States Forest
Service in the building located at 456 Maple Leaf Blvd., Paradise, VA 67890, under lease
number XXXXXXXXXX. The deficiencies are:
(1) No maintenance of the plants in front of the building
Paragraph 6.06 of the lease requires the Lessor to properly maintain plants and lawns
as required.
I, Jane Robinson, verbally notified (you or your staff) on December 15, 2011 that these
deficiencies must be remedied. I also sent a written request to your attention on
December 30, 2011, requesting remedy of these deficiencies. To date, the necessary work still
has not been performed/completed.
It is my determination that if you have not taken action to correct deficiencies by
March 23, 2012, the Government will exercise its right to correct the deficiencies and deduct the
cost from rental payments, pursuant to Paragraph 15 of the General Provisions of the lease. The
premises will be reinspected immediately after March 23, 2012, to determine if the work has
been completed.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 25 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
63.2 – Exhibit 01--Continued
No extensions will be granted from the March 23, 2012, deadline unless I receive adequate
justification, and an acceptable completion target date from you by close of business
March 22, 2012. If you file an extension request, you must:
1. Obtain a receipt for the request either by mailing it “Certified Mail-Return Receipt
Requested” or by having it hand delivered to me.
2. Have my WRITTEN approval of the extended completion deadline in hand before
commencing work.
Proceeding with the work after the deadline without taking the above precautions, will result in
your liability for expenses the Government incurs preparing for the work.
Any questions regarding the above, may be referred to me on (555) 555-5555.
Sincerely,
Jane Robinson
Real Property Leasing Officer
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 26 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
63.21 - Emergency Situations
If the performance deficiency creates an emergency in which lives or Government property is
endangered, the cure letter can be omitted and the Government can have the necessary work
done and send a deduction letter (see sec. 63.3) as soon as the Lessor fails to take action after one
verbal and one written request. The RPLO shall document all verbal and written requests in the
lease file.
63.3 - Deduction Letter
In accordance with the “Default by Lessor” clause in the lease (GSA Form 3517, General
Clauses, Default by Lessor), if the cure letter does not result in a correction, the Government
may, by contract or otherwise, perform the requirement and deduct from any payment under the
lease the resulting cost to the Government including all administrative costs. Or, the
Government may deduct from any payment under the lease an amount which reflects the reduced
value of the lease requirement not performed.
The RPLO shall send a deduction letter to the Lessor informing them of the work done and the
cost that will be deducted. The letter should also advise the Lessor of appeal rights and be sent
by certified mail, return receipt requested.
A sample deduction letter is included in exhibit 01.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 27 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
63.3 – Exhibit 01
Sample Rental Deduction Letter
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
March 26, 2012
John Smith
123 Needleleaf Way
Paradise, VA 12345
Dear Mr. Smith:
By letter of February 22, 2012, (copy attached), you were advised that unless you took action to
correct deficiencies in the space leased by the United States Forest Service at 456 Maple Leaf
Blvd., Paradise, VA 67890, under lease number XXXXXXXXXX, by March 23, 2012, the
Government would exercise its right to correct the deficiencies and deduct the cost from rental
payments, pursuant to Paragraph 15 of the General Provisions of the lease.
The premises were inspected on March 24, 2012, and the deficiency had not been corrected.
I have taken the necessary action at a total cost of $XXX.XX. A breakdown of these costs is
attached. Therefore, I have authorized the deduction of that amount from a future rental check.
This is a final decision of the Contracting Officer:
Under the Contract Disputes Act of 1978, this decision of the Contracting Officer shall be final
and conclusive unless appealed or action is brought in the U.S. Claims Court as indicated herein.
This decision may be appealed to the Services Administration’s Board of Contract Appeals,
Washington, D.C. 20405. If you decide to make such an appeal, you must or otherwise furnish
written notice thereof to the Board of Contract Appeals within ninety (90) days from the date you
receive this decision. A copy thereof shall be furnished to the Contracting Officer from whose
decision the appeal is taken. The Notice of Appeal, which is to be signed by you as the
Contractor or by an Attorney acting on your behalf and which must be in letter form, should
indicated that an appeal is intended, should refer to this decision and should identify the contract
and item by number. The Notice of Appeal should include a statement of the reasons why the
decision is considered to be erroneous. In lieu of appealing to the cognizant Board of Contract
Appeals, you may bring action directly to the U.S. Claims Court, within twelve (12) months of
the date you receive this decision.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 28 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
63.3 – Exhibit 01 - Continued
You are advised that you may, at your sole election, proceed under the small claims procedure
where the amount of dispute resulting from the final decision is $10,000 or less. In like manner
and at your sole election, an accelerated procedure is available before the Board of Contract
Appeals where the amount in dispute resulting from the final decision is $50,000 or less.
Sincerely,
Jane Robinson
Contracting Officer
Attachments
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 29 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
63.31 - Emergency Situations
If the performance deficiency creates an emergency in which lives or Government property is
endangered, the RPLO shall modify the sample deduction letter (see 63.3-ex. 01) to include:
1. An explanation of why the performance failure constituted an emergency requiring
immediate corrective action.
2. A summary of the verbal and written requests made to Lessor or, a summary of the
unsuccessful attempts to contact the Lessor.
63.4 - Modifying the Lease
When a rental payment adjustment is made in accordance with the “Default by the Lessor”
clause in the lease, the RPLO shall document the calculation in an SLA, then insert a fully
executed SLA in the lease file and return a fully executed SLA to the Lessor using a transmittal
letter. Since this is considered an administrative change, the Lessor is not required to sign the
SLA.
63.5 - Updating Lease Data and Lease Payments
See section 62.34 for more details.
64 - RENTAL ADJUSTMENTS
The RPLO may only effect adjustments to rental payments in accordance with a lease provision
or a fully executed SLA that describes the conditions under which an adjustment can be made
and how the adjustment is to be calculated.
An electronic version of the applicable GSA Leasing Desk Guide chapter titled: “Chapter 17 –
Lease Administration”, Parts 8 and 9, can be accessed at:
http://www.gsa.gov/graphics/pbs/LDG-Ch17-LeaseAdministration_09-19-11_508c_final.pdf.
64.1 - Operating Costs Adjustment
One of the most common adjustments to rental payments is based on the operating costs
adjustment clause in the lease which provides for an increase in rental payments to allow the
Lessor to maintain income for increased operating costs such as for cleaning services, supplies,
utilities, and maintenance. This clause also provides for a corresponding decrease in rental
payments if operating costs should decrease.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 30 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
64.11 - Calculation
In accordance with the escalation clause in the lease, the RPLO shall use the Consumer Price
Index (CPI) for urban wage earners and clerical workers, U.S. city average, all items figure
(1982- 84 = 100) published by the Bureau of Labor Statistics to determine the adjustment to the
rental payment.
The RPLO shall determine the amount of the adjustment by multiplying the pre-determined base
rate by the annual percent of change in the CPI. To compute the annual percent of change, the
RPLO shall use the index amount published for the month prior to the lease commencement date,
then subtract the index figure published for the month prior which begins each successive
12-month period. For example, a lease which commenced in June of 2005 would use the index
published for May of 2005, and the RPLO shall subtract from this the index published for May
of 2006, May of 2007, and so on. Next, the RPLO shall divide this amount by the index amount
published for the month prior to the lease commencement date and multiply by 100 to determine
the annual percent of change.
Next, the RPLO shall multiply the annual percent of change by the pre-determined operating cost
base. Finally, the RPLO shall add/subtract this amount from the annual rent amount to
determine the adjustment to the annual rental payment.
A sample calculation for an operating costs adjustment is included in exhibit 01.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 31 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
64.11 – Exhibit 01
Sample Operating Adjustment Calculation
A. Current Year Anniversary Month CPI
215.262
B. Base Year CPI from Lease Commencement
Date (from lease)
177.000
C. Cumulative CPI Difference (A – B)
D. Accumulated Percentage Increase (C/B)
38.262
21.62%
E. Operating Cost Base (from lease)
$28,800.00
F. Annual Rent Amount (from lease)
$147,864.00
G. Accumulated Annual Rent Increase (D * E)
$6,225.68
H. New Annual Rate (F + G)
$154,089.68
I. New Monthly Rate (H/12)
$12, 840.81
* Values for lines B, E, and F are obtained from the
original lease date and are not adjusted in
conjunction with escalations, the exception being a
previous SLA which changed these values.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 32 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
64.12 - Commencement Date
The adjusted rental payment should become effective on the anniversary date of the lease,
beginning with the second year of the lease and for each year thereafter.
64.2 - Vacant Premises Adjustment
If the Forest Service fails to occupy any portion of the leased premises or vacates the premises in
whole or in part prior to expiration of the lease, the operating costs paid for by the Forest Service
shall be reduced.
64.21 - Calculation
In accordance with the “Rate for Adjustment for Vacant Leased Premises” clause, the RPLO
shall calculate the reduction by reducing the pre-determined base operating cost rate by the
amount specified in the clause per ANSI/BOMA Office Area square feet (ABOA SF) vacated.
If no rate reduction has been established, the RPLO shall calculate the reduction by deducting
that portion of the costs per ABOA SF of operating expenses not required to maintain the space.
64.22 - Commencement Date
The adjusted rental payment shall become effective after the RPLO gives the Lessor 30 calendar
days prior notice of the vacancy and shall continue until the Forest Service occupies the vacant
premises or the lease expires or is terminated.
64.3 - Real Estate Tax Adjustment
Another common adjustment to rental payments is based on the real estate tax adjustment clause
in the lease which provides for an increase or decrease in rental payments after the establishment
of the real estate tax base.
64.31 - Calculation
In accordance with the real estate tax adjustment clause in the lease, the real estate tax base
equals the unadjusted real estate taxes for the first full tax year following the commencement of
the lease. If the real estate taxes for that tax year are not based upon a full assessment of the
property, then the real estate tax base shall be the unadjusted real estate taxes for the property for
the first full tax year for which the real estate taxes are based upon a full assessment of the
property.
The real estate tax base is subject to adjustment when increases or decreases to real estate taxes
in any tax year are attributable to improvements or renovations to property not required by the
lease, or changes in net operating income for the property not derived from the lease. If either
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 33 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
condition results in a change to real estate taxes, the RPLO may re-establish the real estate tax
base as the unadjusted real estate taxes for the tax year the property is reassessed under such
condition, less the amount by which the unadjusted real estate taxes for the tax year prior to
reassessment exceeds the prior real estate tax base.
To determine the increase or decrease in real estate taxes, the RPLO shall obtain copies of all
paid tax receipts, or other similar evidence of payment, and a proper invoice (as described in
GSA Form 3517, General Clauses, 552.232-75, Prompt Payment) for the requested tax
adjustment, including the calculation thereof. The RPLO shall provide the Lessor with a
reasonable timeframe in which to provide these documents (typically a due date within the same
calendar year). Failure of the Lessor to submit the proper invoice and evidence of payment
within the prescribed timeframe shall constitute a waiver of the Lessor’s right to receive a tax
adjustment for the tax year affected.
Once the required documents are received, the RPLO shall document the agreed upon percentage
of occupancy that is documented in the lease. This is determined prior to lease award by
dividing the total Forest Service space occupied (rentable square feet) by the total building space
(rentable square feet). Finally, the RPLO shall multiply the Forest Service’s percentage of
occupancy by the difference between the current year unadjusted real estate taxes and the real
estate tax base, less the portion of such difference not paid due to a tax abatement (except if a tax
abatement comes into effect after the date of award of the Lease, then it’s not applicable).
A sample tax adjustment calculation is included in exhibit 01.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 34 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
64.31 – Exhibit 01
Sample Tax Adjustment Calculation
Lessor: Smokey Bear
Lease No.: XXXXXXXXX
Tax Submission Date: May 4, 2012
a. Lease Tax Base Year
2010
b. Lease Tax Base Year Amount
$5,000.00
c. Current Lease Taxes Cost
$6,500.00
d. FS Percentage of Occupancy
4,500 RSF/10,000 RSF = 45%
(Total Government space RSF ÷
Total building space RSF = % of
Occupancy)
e. Tax Reimbursement to Lessor
(c – b) x d = Tax Reimbursement
$6,500.00 - $5,000.00 = $1,500.00
$1,500.00 x 45% = $675.00 owed
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 35 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
64.32 - Commencement Date
The Forest Service shall make a lump sum payment to the Lessor for its share of any increase in
real estate taxes during the lease term within 30 days after receipt of evidence of payment and a
proper invoice.
In the event that the tax adjustment results in a credit owed to the Forest Service, the Forest
Service may elect to receive payment in the form of a rental credit or lump sum payment.
64.4 - Modifying the Lease
When a rental payment adjustment is made in accordance with the operating costs, vacant
premises, or real estate tax adjustment clause in the lease, the RPLO shall document the
calculation in an SLA, then insert a fully executed SLA in the lease file and return a fully
executed SLA to the Lessor using a transmittal letter. Since this is considered an administrative
change, the Lessor is not required to sign the SLA.
64.5 - Updating Lease Data and Lease Payments
See section 62.34 for more details.
65 - POST-OCCUPANCY ALTERATIONS
During the lease term, the Forest Service has the right to make post-occupancy alterations to the
leased space in order to support the mission and long-term needs of the agency. The most
common reasons for alterations in leased space include: installing or replacing Forest-Service
owned equipment, modifying space configurations, accommodating requirements for additional
facilities (such as conference rooms), or changing mission-related requirements (such as security
enhancements).
An electronic version of the applicable GSA Leasing Desk Guide chapter titled:
“Chapter 8 - Alterations in Leased Space” can be accessed at:
http://www.gsa.gov/graphics/pbs/LDG_Ch_8-Alterations_in_Leased_Space_5-31-11_508.pdf.
65.1 - Determine Need
The RPLO shall confirm the Unit’s need for alterations by obtaining a scope of work from the
Unit. Depending upon the work required, the scope of work might contain a narrative, floor
plans, equipment specifications, and/or contractor qualifications. The level of detail in the scope
of work will vary based on the procurement process used (see sec. 65.6).
The RPLO shall also obtain written approval from the unit confirming the availability of funds
prior to beginning the alterations process.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 36 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
65.11 - Special Considerations
Before acquiring major alterations when the remaining lease term is cancelable, the RPLO shall
consider the following options:
1. Early exercise of any existing renewal options.
2. Cancellation of the lease and procuring new space.
3. Acquiring a succeeding lease.
4. Acquiring a superseding lease.
The RPLO should also consider the following effects of alterations on leases:
1. The operating rent effect, if any.
2. The schedule effect (if part of a larger project).
3. Other agency specific issues.
4. Other agency regulatory requirements that support the alterations.
65.2 - Determine Scope
Since justification and approval procedures differ for alterations within the scope vs. outside of
the scope of the lease, the RPLO shall determine whether the alterations are within or outside of
the scope of the lease and document the determination in the lease file. To do this, the RPLO
shall:
1. Decide whether the work is fairly and reasonably part of the lease requirement
originally contracted for; and
2. Evaluate the intended purpose of the alterations along with the estimated cost
compared to the current use of the space.
65.3 - Determine Who Will Perform Alterations
The Forest Service has the right to determine who will perform the alterations on the leased
space. The Forest Service may acquire the alterations directly from the Lessor or the Forest
Service may acquire the alterations through a separate contract using standard contracting
procedures that apply to a construction contract performed on Federal property.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 37 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
In general, if the alterations fall within the general scope of the lease (see sec. 65.41), it is in the
Forest Services’ best interest to acquire the alterations from the Lessor. In most cases, Lessors
offer the lowest risk option for performing alterations because of their knowledge of their
buildings and systems.
If the Forest Service decides to acquire the alterations through a separate contract, the RPLO
shall inform the unit to contact its local AQM Contracting staff to perform this process. Also,
the RPLO shall obtain a signed and dated Waiver of Restoration document from the current
Lessor if this clause is not already part of the lease. This is important because without the
waiver, the Forest Service risks having to tear out the alterations and return the space to its
original condition at the expiration of the lease.
The Waiver of Restoration document should contain the following verbiage, “The Lessor waives
restoration for any work done under this contract”.
65.4 - Competition Determination
65.41 - Within Scope of Lease
If the alterations are within the scope of the lease, they may be performed by the Lessor without
a Justification for Other than Full and Open Competition if:
1. The Lessor is willing to perform the alterations at a fair and reasonable price; and
2. It is in the Government’s interest to acquire the alterations from the Lessor.
65.42 - Outside the Scope of Lease
If the alterations are outside the scope of the lease and will not exceed the SLAT, the RPLO
may:
1. Acquire the alterations through negotiations with the Lessor. If the alterations will not
exceed $2,500, a justification is not required. If the alterations will exceed $2,500 but not
the SLAT, a formal justification is not required, but the RPLO shall document the file to
explain lack of competition (General Service Acquisition Manual (GSAM) 570.502-1).
See chapter 20, section 28 for more details.
2. Request that the unit contact its local AQM Contracting staff to acquire the alterations
through a separate contract using standard contracting procedures that apply to a
construction contract performed on federal property.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 38 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
If the alterations are outside the scope of the lease and will exceed the SLAT, the RPLO may:
1. Negotiate directly with the Lessor to acquire the alterations, but shall prepare a
Justification for Other than Full and Open Competition (GSAM 570.502-1). See chapter
20, section 28 for more details.
2. Request that the unit contract its local AQM Contracting staff to acquire the
alterations through a separate contract using standard contracting procedure that apply to
a construction contract performed on federal property.
All lease alterations that are estimated to exceed one half of the current prospectus level, must
have Congressional approval prior to award. A list of the yearly prospectus levels is available on
GSA’s website at: http://www.gsa.gov/portal/content/101522.
If a lease alteration meets the prospectus level criteria, the RPLO shall forward a request signed
by the Regional Forester to the Washington Office, Director of Acquisition Management
(AQM). The Washington Office, Director of AQM will review and submit via cover letter to the
USDA, Director of Office of Procurement and Property Management (OPPM) for transmittal by
the General Services Administration (GSA) to the House and Senate Committees on Public
Works.
65.5 - NEPA Analysis and Documentation
The RPLO shall contact the Environmental Coordinator at the applicable level of responsibility
early in the alterations process for a determination of what type of National Environmental
Protection Act (NEPA) evaluation (if any) must be undertaken. See Chapter 20, section 23.2 and
Forest Service NEPA procedures at 36 CFR 220, FSM 1950.43, and FSH 1909.15 for more
details.
65.51 - Section 106 of the National Historic Preservation Act Consultation
In accordance with Federal Management Regulation (FMR) 102-78, every effort should be made
to avoid or minimize adverse effects on historically significant spaces, materials, and characterdefining architectural features.
If there is an alteration request that will potentially affect historic properties, the RPLO shall
contact the local GSA Regional Historic Preservation Officer (RHPO) to identify and address
any preservation issues. For a list of current RHPO contact information go to:
http://www.gsa.gov/portal/staffDirectory/topic/46@@.
Additional information describing the requirements and procedures for compliance with Section
106 of the National Historic Preservation Act can be found in a GSA order titled “ADM 1020.2,
Procedures for Historic Properties”. An electronic version of this document can be accessed at:
http://www.gsa.gov/portal/content/101031.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 39 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
65.6 - Process to Acquire Alterations
65.61 - Proposal from Lessor
In accordance with GSAM 570.502-2, if the RPLO plans to acquire alterations through
negotiations with the Lessor, the RPLO shall:
1. Obtain a scope of work from the Unit, including any plans and specifications, for the
alterations. The RPLO will provide this to the Lessor as a basis for their proposal.
2. Obtain an independent Government estimate from the unit for the alterations. This
will serve as the basis for analyzing and negotiating the Lessor’s cost proposal.
3. Request a proposal from the Lessor to complete the alterations. The request must
reference the price proposal requirements in GSAR 552.270-13 and include the scope of
work and any plans and specifications.
4. Evaluate the proposal by first determining if the proposal meets the Forest Service’s
requirements. Next, analyze the cost or price information provided and compare the
Lessor’s proposal to the independent Government estimate. If needed, request technical
support to assist during the review.
5. Negotiate with the Lessor. Provide the Lessor with the greatest incentive for efficient
and economical performance. If a Waiver of Restoration clause is not in the lease, ask
the Lessor to sign a Waiver of Restoration for all alterations that will be performed.
6. Document the price determination in a Price Negotiation Memorandum (see ch. 40,
sec. 43.4).
65.62 - Competitive Proposal
If the RPLO plans to acquire alterations through a separate contract, the RPLO shall contact its
local AQM Contracting staff to perform this process.
65.7 - Modifying the Lease
Once the RPLO has determined that the offer is fair and reasonable, the RPLO shall modify the
lease to specify the new square footage (if applicable), increase in operating or maintenance
costs, restoration language, and any other issues that must be addressed.
If the Lessor will be performing the alterations, the RPLO shall also modify the lease to account
for the construction timeline, design intent drawings, interior finishes, construction drawings,
negotiated price and method of payment for the alterations.
WO AMENDMENT 6409.12-2014-1
EFFECTIVE DATE: 07/08/2014
DURATION: This amendment is effective until superseded or removed.
6409.12_60
Page 40 of 40
FSH 6409.12 - LEASING OFFICERS’ HANDBOOK
CHAPTER 60 - LEASE ADMINISTRATION
The RPLO shall document the lease modifications by sending two SLAs to the Lessor for
signature. Upon receipt of the Lessor’s signed and dated SLAs, the RPLO shall ensure that no
changes have been made, then sign and date both copies. The RPLO shall insert a fully executed
SLA in the lease file and return the other fully executed SLA to the Lessor using a transmittal
letter. If the Lessor will be performing the alterations, the RPLO shall also issue a Notice to
Proceed (NTP) letter to the Lessor (see ch. 40, sec. 46.14 for more details).
65.8 - Construction of Alterations and Acceptance
See chapter 40, section 47 for details on the pre-construction meeting, progress inspections,
change orders, pre-occupancy inspection, and space acceptance.
65.9 - Updating Lease Data and Lease Payments
See section 62.34 for more details.
66 - ENVIRONMENTAL CONDITIONS
If during the term of the lease, the RPLO receives a complaint from building occupants
concerning the quality of air, water, or building interior (such as, suspicion of mold), the RPLO
should promptly contact the Forest Service Engineering Staff to request review by the local
Environmental Engineer. If the Environmental Engineer agrees that there is a problem that
needs remediation, the RPLO should contact the Lessor to address the complaint. See specific
air, water, and mold clauses in the lease for more details.
If the RPLO receives a complaint that is clearly urgent in nature, the RPLO shall go directly to
the Lessor to address the complaint.
67 - DISPUTES
Disputes that arise under the lease regarding the performance or non-performance by either party
must be resolved according to the Contract Disputes Act of 1978, as amended (41 U.S.C. 601613). All claims must be presented in writing to the RPLO and the RPLO shall provide a written
decision (no verbal commitments will be honored). The written decision shall be considered
final unless the Lessor appeals or files a law suit.