15 FAM 340

LEASE Management

(CT:OBO-80;   01-22-2019)
(Office of Origin:  OBO)


(CT:OBO-80;   01-22-2019)

All posts must use the model lease in 15 FAM 351 and follow the instructions given in 15 FAM 360.


(CT:OBO-80;   01-22-2019)

Approvals for lease amendments are handled in the same manner as approvals for the original leases; 15 FAM 352 provides a sample lease amendment.


(CT:OBO-29;   03-29-2012)

a. Renegotiation of a lease requires the execution of a new lease document.  U.S. Government contracting principles prohibit the renegotiation of a valid lease unless mandated by local law or unless additional benefit accrues to the U.S. Government.  One example of such benefit is additional or improved space.

b. Renegotiated leases are assigned new lease contract numbers but carry the same property identification numbers.  The new lease must identify the former lease by number, and must state that it is replacing or superseding that lease.


(CT:OBO-80;   01-22-2019)

Termination of all leases must be executed in accordance with the specific terms of the lease and local laws.  Early termination may have to be negotiated with the landlord if termination incurs a financial penalty and there may also be a requirement for restoration of the premises regardless of termination rights.  In cases of a proposed early termination of nonresidential properties with rent above $50,000 per year, posts must advise the Bureau of Overseas Buildings Operations (OBO) or, for U.S. Agency for International Development (USAID) leases, the Overseas Management Division, Office of Management Services, Bureau for Management, USAID/Washington (USAID/W - M/MS/OMD) prior to issuing a termination notice and seek confirmation of the termination plans.  Funding may be required for the termination and the funding agency must also provide approval.  All lease termination agreements must follow the sample in 15 FAM 353.


(CT:OBO-29;   03-29-2012)

It is U.S. Government policy to invoke the protection of local rent control laws, since to do otherwise would raise the question of expending public funds in excess of the amount required.  If local laws require paying rent increases, the post must investigate and retain copies of the appropriate laws or pertinent extracts and an original or certified copy of any pertinent ruling of a local rent control board or authority.


(CT:OBO-29;   03-29-2012)

In many countries, lease terms are not enforceable by law unless the lease has been officially registered.  The failure to register a lease can lead to the loss of valuable contract rights and/or potential embarrassment to the U.S. Government.  Despite the fact that the model lease requires the landlord to register the lease, some landlords fail to do so.  In those cases, a post must take it upon itself to register all leases unless the local jurisdiction does not provide a registration system or the system does not result in added protection to the rights of the U.S. Government.  Registration is of utmost importance if the lease contains an option to purchase or a renewal option extending several years into the future.  The lessor normally pays the registration fees; however, if this is not feasible, these costs should be split or, as a last resort, should be charged to the lease fund.

15 FAM 347  Required Lease Documentation

15 FAM 347.1  General

(CT:OBO-80;   01-22-2019)

a. Post must upload required documents to the property record in the real property application (RPA).  For U.S. Agency for International Development (USAID) leases, USAID missions must send documents to the General Services Officer (GSO), who must then update the Real Property Application (RPA).

b. If any documentation is prepared in a foreign language, an English translation must accompany the copies uploaded to RPA/forwarded to USAID/W - M/MS/OMD.  The translation should be signed by the certified translator, with the translator’s name typed below the signature.

15 FAM 347.2  State Lease Documents

(CT:OBO-80;   01-22-2019)

Posts are responsible for handling the lease documents noted in this section that are executed in the name of the United States of America, acting by (name), (title), and (post):

(1)  Capital leases (CLs):  Posts must maintain all applicable and related documents, such as original signed capital leases (CLs), CL renewals, amendments, addenda, schedules, and exhibits.  Post must upload document copies to the property record in RPA and must include an English translation.  Related records include blueprints; floor plans; photographs; surveys; documentation of major equipment repair; replacement, overhaul, and cost documentation for construction increasing the property value; scope of work (SOW) for make-ready improvements requested of the landlord; and other contracts and agreements, e.g., protocols, memoranda of understanding (MOUs), and property agreements.  Posts must maintain copies of these documents through the entire life of the lease and all renewals and extensions, plus five years. However, if a given property is the subject of litigation, retain the records until litigation has been settled or terminated;

(2)  Recording capital leases in financial management system:  Posts must consult with OBO, and then submit capital lease documentation to the Office of Accounting Operations Domestic, Directorate of Global Financial Operations, Bureau of the Comptroller and Global Financial Services (CGFS/F/AOD) within 30 days of submission to OBO;

(3)  Operating leases (OLs):  Regardless of occupying agency, posts must retain original contracts, leases, renewals, amendments, and related records (including notes, letters, property descriptions, and site plans) for all OLs.  Posts must upload copies of signed OLs for all OL properties to RPA.  The signed OL documents include new leases, renewed and renegotiated leases, and all related amendments, to include notices of rent increases.  An English translation, (signed by the certified translator, with the translator’s name typed below the signature) must accompany any documentation prepared in a foreign language.  Post must annually ensure that RPA data reflects the current lease terms and rates;

(4)  Termination and quittance agreement:  Posts must submit one original signed Termination and Quittance Agreement for CLs and OLs to OBO;

(5)  Other documentation:  Posts must retain all other lease documentation for a period of five years, including, but not limited to, the Post Occupational Safety and Health Officer (POSHO) certification.  The POSHO certification must be completed and documented in the POSHO Certification Application.  (See 15 FAM 252.5.)  However, if a given property is the subject of litigation, retain the records until litigation has been settled or terminated; and

(6)  Employee associations:  See 6 FAM 524.  For temporary duty (TDY) quarters, see 6 FAM 526 for additional required documentation.

15 FAM 347.3  USAID Lease Documents

(CT:OBO-80;   01-22-2019)

The USAID contracting officer will forward the following to USAID/W - M/MS/OMD: (a) one copy of the signed original (except for residential property OLs) and (b) one copy of each lease amendment.  USAID missions must send the original signed documents to the GSO, who must then update RPA.

15 FAM 347.4  Documents for Leases Funded by Other Agencies

(CT:OBO-80;   01-22-2019)

Each agency is responsible for providing required documents to its parent agency.  The responsible leasing office must provide one copy of all leases, any related amendments, and the Termination and Quittance Agreements to the respective agency’s representative for forwarding to parent agencies.  (Consult 15 FAM 145.1 for forwarding addresses.)

15 fam 348  through 349  unassigned