UNCLASSIFIED (U)

15 FAM 300 
LEASED SPACE abroad

15 fam 310

general policy and guidelines

(CT:OBO-94;   09-18-2019)
(Office of Origin:  OBO)

15 FAM 311  AUTHORITY AND SCOPE

15 FAM 311.1  Authority

(CT:OBO-60;   11-02-2017)

a. General:  The Foreign Service Buildings Act of 1926, as amended (22 U.S.C. 291 et seq); the Foreign Assistance Act of 1961, as amended (22 U.S.C. 2396); and, for the Department of State, Department of State Delegation of Authority Number 114.

b. Post leasing authority:  The Director of the Bureau of Overseas Buildings Operations (OBO), through the Secretary of State, under the Foreign Service Buildings Act of 1926 (as amended by 22 U.S.C. 291), holds the authority to execute, renew, and amend real property leases abroad.  The Director delegates authority (via cable or in other written communication) to posts to sign a lease.  The chief of mission (COM) or the principal officer (PO) typically delegate the authority to execute leases at post to the general services officer (GSO) or management officer (MO).  In the absence of the GSO or MO, the COM or PO must designate another embassy officer to sign the lease.  U.S. Agency for International Development (USAID) delegates authority to mission directors and executive officers to execute, renew, or amend leases and to manage USAID’s U.S. Government-owned properties.  (See Automated Directives System (ADS) 535.2 and 103.3.21.)

15 FAM 311.2  Scope

(CT:OBO-94;   09-18-2019)

This subchapter applies to all the U.S. Government’s real property operating leases (OL) and capital leases (CL) for residential and nonresidential (functional) spaces used by U.S. Government agencies at post and their employees.  CLs are treated as acquisitions for programming, authorization, and funding purposes, but the leasing provisions in this subchapter govern the documentation for CL proposals and CL contracts.  15 FAM 310 through 15 FAM 360 contain detailed procedures and guidelines.  4 FAM 737.4, Accounting for Real Property Leases, governs the accounting treatment for the Department's real property leases.  For State, direct any questions and comments on these policies to OBO/PRE.  For USAID, contact the Overseas Management Division, Office of Management Services, Bureau for Management, USAID/Washington (USAID/W - M/MS/OMD).

15 FAM 311.3  Leasehold Management

(CT:OBO-60;   11-02-2017)

a. The Office of Real Property Leasing in the Directorate for Planning and Real Estate (OBO/PRE/RPL) manages the OBO 7400 leasehold account and is responsible for overseas leasing transactions.  This office oversees the model lease, transaction management, benchmarks, lease waivers, lease budgets, and funding for leased real property.

b. As Single Real Property Manager (SRPM), OBO authorizes posts to sign all leases on real property for U.S. diplomatic and consular missions, with the exception of some USAID leases.  Capital leases (CLs) require prior OBO approval or USAID/W-M/MS/OMD (for USAID CLs).  CLs are similar to real property purchases because the entire lease must be budgeted, and sometimes paid for, in the fiscal year in which the lease is signed.

c.  Based on post’s budget submissions (initial baseline plus additional requirements planned), OBO/PRE/RPL and the Office of Financial Management, Directorate of Resource Management, Bureau of Overseas Buildings Operations (OBO/RM/FM) provide each post with a funding target for both the Department's program and the International Cooperative Administrative Support Services (ICASS) leasehold accounts.  All leases exceeding the funding target require OBO’s notification and approval, regardless of size or cost—even if the leases are under $25,000 per year, under the post’s rental benchmarks, or within space standards for the employee occupying the property for which post needs additional funding.

d. Requests for new Department program nonresidential (functional) leases are strictly prioritized and weighed against other requirements, both regionally and worldwide.  Posts must provide sound justifications for any new lease requests and be prepared to consider alternatives if funding is not available or is delayed.  (See 15 FAM 311.5-1.)

15 FAM 311.4  Major Leases

(CT:OBO-94;   09-18-2019)

Major leases:  These are defined as new leases and amendments, extensions, or renewals of existing leases, regardless of the funding source or occupying agency.  Major leases have one or more of the following features:

(1)  Nonresidential properties:

(a)  Annual rent greater than $500,000;

(b)  A rent payment aggregate, including fixed-rent increases, that will likely be greater than $2 million over the entire term and renewals;

(c)  Make-ready and tenant improvements costing in excess of $250,000, including technical and physical security upgrade expenses;

(d)  Space used for the handling, storage, or discussion of classified materials; or

(e)  The leased property is a chancery, consulate, consular agency, warehouse with offices and/or shop space, or an office annex;

(2)  Residential properties:

(a)  As defined in 15 FAM 235.1, the chief-of-mission residences (CMRs), deputy-chief-of-mission residences (DCRs), consul general residences (CGRs), principal officer’s residences (PORs), and all Marine security guard quarters (MSGQs) meeting the following conditions:

(i)     Annual rent exceeding $120,000; or

(ii)    The residence requires make-ready or tenant improvements, including technical and physical-security upgrades, costing more than $100,000;

(b)  Multifamily residential buildings or residential compounds with six or more adjacent or attached residential units within which the U.S. Government is the sole occupant.  This definition applies once six or more adjacent or attached units are leased, even if the units were previously approved through e-Lease Waivers (e-LWR); and

(c)  A ‘build to lease’ (BTL) or ‘option to lease’ (OTL) for a designated residence or a multiunit residential building or compound with six or more adjacent or attached units within which the U.S. Government is the sole occupant;

(3)  All properties:

(a)  A sole-occupancy building or space in a multi-tenant building that is:

(i)     Not ready for occupancy; and

(ii)    Needs to be fitted out before occupancy occurs, regardless of who performs the fit out.  “Ready for occupancy” means a completed structure with finished common areas, operating core areas, finished tenant spaces ready for basic occupancy, and requiring only make-ready specialized for the U.S. Government;

(b)  Any new lease or lease amendment that calls for altering a building’s major structural elements, adding square footage, or replacing a building’s primary mechanical or electrical infrastructure; or

(c)  Assemblages of properties (improved or unimproved) under one or more leases, including any additions to such assemblages;

(4)  Exceptions to the definition of a major lease:

(a)  Property leases (other than office annexes) with pre-negotiated fixed rents or rent increases for the renewal periods approved as part of the original lease; and

(b)  Lease renewals of designated residences originally leased after December 2013.  Posts may submit renewal requests through e-LWR instead of major-lease cable if the:

(i)     Annual rent is still at or below $120,000; and

(ii)    Total rent is still below $2 million over the remainder of the lease term and remaining renewal periods, including fixed rents or rent increases.

15 FAM 311.5  Major Lease cable and Process

15 FAM 311.5-1  Submitting a Major Lease

(CT:OBO-60;   11-02-2017)

a. When post identifies a lease requirement that fits within the definitions included in 15 FAM 311.4, post is responsible for preparing and submitting the major lease cable requesting assistance from the Major Leases Division, Office of Real Property Leasing, Directorate of Planning and Real Estate, Bureau of Overseas Buildings Operations (OBO/PRE/RPL/ML).  Major leases often require detailed planning, complex make-ready or fit-out, and substantial funding.

b. Posts must get OBO approval before entering into new nonresidential leases and certain residential leases.  OBO will process a request to fit out a new facility only if (a) OBO and Diplomatic Security (DS) perform appropriate due diligence for a project and (b) project funding is identified.

15 FAM 311.5-2  Lease Approval Process

(CT:OBO-94;   09-18-2019)

a. OBO processes approval requests for major leases based on priority, available funding, complexity, and other factors.  Because budgets are prepared two years in advance, posts should cable OBO, detailing both the need for new space and the property likely to be a major lease project.  Post should send the cable out two to five years in advance of the requirement, depending on the scale of the proposed project.  The Project Coordination Division, Office of Physical Security Programs, Directorate of Countermeasures, Bureau of Diplomatic Security (DS/PSP/PCD), post, and OBO coordinate on physical security requirements.  For major leases, OBO Real Estate will send a lease approval cable to DS/PSP/PCD for clearance before authorizing post’s signature.  If post requests any security upgrades, DS vets the request first, then coordinates with the Office of Security Management, Directorate of Construction, Facility, and Security Management, Bureau of Overseas Buildings Operations (OBO/CFSM/SM) to determine the entity responsible for funding and implementation.  15 FAM 165 provides guidance on funding responsibilities for security upgrades.

b. Approval for major leases follows these steps:

(1)  Post submits a cable detailing the requirement;

(2)  OBO determines if the requirement is valid and identifies the full range of alternative actions that may address post’s needs;

(3)  OBO/PRE/RPL scores and prioritizes the proposal to determine when to fund and complete the project in the context of competing projects;

(4)  Technical due diligence is initiated, when appropriate, as described in 15 FAM 311.5-2, paragraph d; and

(5)  OBO advises post of their decision and the path forward.

c.  Cables to OBO proposing a major lease action must describe the requirements in detail.  Posts should use the template for requesting consideration of a major lease proposal.  The template is available on the OBO/PRE/RPL website.

d. Due diligence:  In order to protect the Department's financial, legal, and safety interests, and to adhere to federal financial guidelines, OBO performs due diligence on all proposed properties.  This includes validating space requirements (included in 15 FAM Exhibit 237(1)) and staffing patterns; evaluating existing housing and nonresidential properties; reviewing long-term post operational plans; and reviewing the local security considerations.  Common due diligence for major lease actions (including renewals) includes:

(1)  Market studies and appraisals, as outlined in 15 FAM 311.6;

(2)  Searches of company registrations and land titles;

(3)  Test fits and design reviews;

(4)  Cost estimates; and

(5)  Assuring fire/life/safety/security requirements can be met in the proposed property/project.

15 FAM 311.6  Policy to Value Real Property for Leasing Actions

(CT:OBO-60;   11-02-2017)

a. Residential and nonresidential appraisal requirement:  In order to protect the Department's financial interests when leasing property, and to satisfy budgetary requirements, OBO will obtain at least one independent professional appraisal for leased properties, as defined herein.  The appraisal requirement for leased properties pertains to the acquisition and renewal of leases that fall into any of the following categories:

(1)  CMR/DCMR/CGR/POR/MSGQ properties:  If the annual base rent is above $120,000 and the lease term is 6 years or longer; and

(2)  Nonresidential properties:  If the annual base rent exceeds $250,000.

b. The appraisal requirement also applies to any portfolio of similar properties leased at the same time and place that aggregately meet these criteria.

c.  The Evaluations Division, Office of Master Planning and Evaluation, Directorate of Planning and Real Estate, Bureau of Overseas Buildings Operations (OBO/PRE/MPE/EV) will select the appraisers and review the appraisal reports.  The OBO/PRE/MPE/EV Division Director may waive or modify the appraisal requirement for an action if:

(1)  The cost of the appraisal appears high relative to the amount at stake;

(2)  Local conditions and experience indicate no credible appraisals can be obtained; or

(3)  It is in the best interests of the U.S. Government based on the facts and circumstances.

d. OBO/PRE/RPL/ML, not post, requests appraisals, market studies, or other research for major lease acquisitions or renewals from the Evaluations Division.  OBO/PRE/RPL/ML must make these requests well in advance of the lease negotiations to provide enough time for the Department to negotiate effectively, make a credible business decision, and maintain the leverage and ability to pursue alternative properties if necessary.  A minimum of 90 days is needed to procure and review appraisals and market studies.  Thus, posts need to avoid last minute requests for major leasing actions, especially for high cost leases.

e. OBO/PRE will fund appraisals, and USAID will fund appraisals for USAID properties.  Direct any questions regarding this requirement or the process to the OBO/PRE/MPE/EV Division Director or, if USAID is operating independently, to USAID/W- M/MS/OMD.

15 FAM 312  LEASING POLICY

15 FAM 312.1  Capital Leasing

(CT:OBO-94;   09-18-2019)

a. Referencing OMB Circular A-11 Appendix B, capital leases (CLs) are similar to purchases of real property because the entire lease is budgeted in advance.  These require prior OBO approval or, for USAID capital leases, the approval of USAID/W - M/MS/OMD.

b. Such leases may be appropriate and desirable under one or more of the following conditions:

(1)  When the post would normally buy such a property, but the fee simple title (full rights of ownership and transfer in perpetuity) is unobtainable because of the host or municipal government’s legal or regulatory prohibitions; or

(2)  When the advance payment of the lease cost is reasonable (in view of the expected length of occupancy), and the U.S. Government intends to make a substantial investment in major alterations to the building, its systems or structural elements, add new space to the building, or reconfigure the property to meet its needs.

c.  OBO and post need to perform the same due diligence on a CL property as they would for a purchased property.

d. Normally, it is in the U.S. Government’s interest to own, or execute a capital lease for, chanceries, consulates, and designated residences because of the expected length of occupation and significant modifications required.

e. Manage and track real property CLs funded with DOS appropriations according to 4 FAM 737.5-1, Capital Leases.

15 FAM 312.2  Leases for Nonresidential Space

(CT:OBO-60;   11-02-2017)

a. OBO and the funding agency’s Washington, DC headquarters must approve all leases of nonresidential space, regardless of the annual rental cost.  All agencies involved must approve leasing nonresidential space for a facility at a new post, relocating a major facility at an existing post, or leasing shared space.  Posts must follow 15 FAM Exhibit 312.2 and submit requests and proposals to OBO, the regional bureaus, and the parent agencies.  USAID leases signed by the executive officer or mission director require prior approval by USAID/W - M/MS/OMD; OBO approval is not required.  (See also collocation policy in 12 FAH-5, Physical Security Handbook.)

b. Before leasing additional space, posts must first consider property that the U.S. Government already owns, leases, or otherwise controls.  As part of their lease request, post must certify they completed this assessment.

15 FAM 312.3  U.S. Government Leasing and Living Quarters Allowance (LQA) Programs

(CT:OBO-60;   11-02-2017)

Posts must obtain OBO, regional bureau, and parent agency approval before initiating or reestablishing a U.S. Government leasing program for residential quarters or a living quarters allowance (LQA) program.  (See 15 FAM 314.)

15 FAM 312.4  Lease Costs and Funding

(CT:OBO-60;   11-02-2017)

All CLs must be fully budgeted at the beginning of the lease.  15 FAM 160, 15 FAM 620, and 15 FAM 640 contain the funding responsibilities for operating leases (OLs) and CLs.  Maintain all lease documents at post, including leases under LQA, and upload them to the Real Property Application (RPA).  Update all lease documents in RPA as needed so they always reflect current lease terms.

15 FAM 312.5  Security

(CT:OBO-94;   09-18-2019)

The regional security officer/post security officer (RSO/PSO) must approve new and renewed residential leases.  Said leases must also meet DS’ established security standards as detailed in 12 FAH-6 H-130 (including leases funded by LQAs or overseas housing allowances (OHAs)).  (See 12 FAM 330.)  DS and the parent agency’s office of security must approve new and renewed leases for office and other nonresidential space.

15 FAM 312.6  Safety, Health, and Environment

15 FAM 312.6-1  Certification of Properties

(CT:OBO-60;   11-02-2017)

a. When leasing residential and nonresidential properties under COM authority (either a new lease or a lease renewal), the property must meet State's safety, health, and environmental requirements established by the Office of Safety, Health, and Environmental Management, Directorate for Operations, Bureau of Overseas Buildings Operations (OBO/OPS/SHEM).  (See 15 FAM 971.)  The post occupational safety and health officer (POSHO) must also certify leased properties before occupancy.  Document the certifications in the POSHO Certification Application.

b. The POSHO must certify residential properties at lease inception and recertify them at each lease renewal, not to exceed five years.  The POSHO must certify nonresidential properties at lease inception and recertify them every five years.  Complete all certifications in the POSHO Certification Application and retain a copy in the post’s property file.

15 FAM 312.6-2  Nonresidential Properties

(CT:OBO-60;   11-02-2017)

a. No employee may occupy a U. S. Government-owned or -leased nonresidential property unless the POSHO certifies the following requirements are met:

(1)  A qualified technician has inspected all systems and the property is suitable for occupancy;

(2)  An effective grounding system is in place with ground resistance verified and documented to be less than 25 ohms;

(3)  Ground fault circuit interrupters (GFCI) must be installed.  They must have trip levels of ten mA or less for countertop outlets, outlets in bathrooms and kitchens, and outlets in other areas stipulated by OBO;

(4)  The building has potable water;

(5)  Local authorities must present valid elevator safety certifications for elevators, dumbwaiters, material lifts, platforms, and chair lifts;

(6)  If the facility is located in a seismic zone, post must contact the Natural Hazards Program’s (NHP’s) Program Manager for guidance on confirming if the building is seismically safe for occupancy.  The NHP’s Program Manager works in the Civil Structural Engineering Division, Office of Design and Engineering, Directorate of Program Development, Coordination, and Support, Bureau of Overseas Buildings Operations (OBO/PDCS/DE/CSE);

(7)  Materials containing asbestos have been removed or sufficiently sealed to eliminate health risks to the occupants;

(8)  Stair treads and risers are of uniform size and shape;

(9)  Handrails are installed, typically for stairways, at 34-38 inches, as measured from the stair tread nose.  Guardrails are required on any open-sided walking surface located more than 30 inches (762mm) measured vertically to the floor or grade below, e.g., mezzanines and stair landings.  Guardrail installation must be 42 inches (1067 mm) above the adjacent walking/working surface and not have openings greater than 4 inches (102 mm).  The loading side of loading docks is exempt from this requirement;

(10) Guardrails 42 inches (1067 mm) in height are provided where appliances, equipment, fans, roof hatch openings, or other components requiring service are within ten feet (3048 mm) of a roof edge or open side of a walking surface.  The guardrail must extend not less than 30 inches (762 mm) beyond each end of such equipment; and

(11) If a pool is present, it is isolated by a barrier that meets the Department's requirements.

b. The POSHO must use the Department's Residential Safety, Health, and Fire Prevention Awareness Checklist to assist in identifying other unsafe conditions, which must be resolved prior to occupancy.  (See 15 FAM Exhibit 111.)

c.  The POSHO must maintain the POSHO certification in the post’s property record and forward it to OBO/OPS/SHEM.  OBO/PRE/RPL is responsible for ensuring the POSHO assessment is completed.

15 FAM 312.7  Operating Lease Authority

(CT:OBO-94;   09-18-2019)

a. Except for certain USAID-managed leases, post’s general services officer (GSO) or management officer must execute all OLs.  With OBO’s authorization, the COM can designate another post administrative officer for this purpose.

b. All leased buildings must conform to local structural, safety and health, fire, and building codes and/or requirements.  Posts should work with OBO/PRE/RPL, as needed, to verify conformity.

c.  All leases for other agencies located in a portion of the leased space require prior approval from the parent agency.  Posts must submit the approval paperwork as part of their submittal, and must follow the procedures for Department leases.

d. For State, the OBO Director must grant prior approval in the circumstances listed herein.  For USAID, USAID/W - M/MS/OMD is the approving body.  The limitations apply to both State and USAID, unless otherwise designated:

(1)  OBO or USAID must approve rental costs exceeding any of the following factors:

(a)  $50,000 per year in any year of the lease;

(b)  The rental benchmarks established for post by the Rental Benchmark Program; or

(c)  For posts without established rental benchmarks, all leases exceeding $25,000 per year;

(2) The leased space exceeds maximum space standards, regardless of the rental costs (see 15 FAM Exhibit 237(1));

(3)  State leases:  The lease requires 12 months’ rent up front (see 15 FAM 323);

(4)  The lease requires up-front rent that goes beyond the end of the next fiscal year (see 15 FAM 323);

(5)  The landlord requested offshore payments;

(6)  The landlord will construct or substantially alter leased premises to U.S. Government specifications;

(7)  Any lease deviating from the model lease (see 15 FAM 350);

(8)  The time period between lease execution and estimated occupancy exceeds 3 months;

(9)  Rents paid under the lease will be assigned to a third party or other creditor, not the owner;

(10) Another agency requiring prior approval provides funding for nonresidential space;

(11) Funding for nonresidential space is changing from one agency to another;

(12) The lease is for other than residential space;

(13) The post has not previously had a residential leasing program, or is reestablishing a previously discontinued program;

(14) The lease is a capital lease; or

(15) The lease is for housing to be used as temporary or transient quarters (new and renewal leases).

e. Regardless of cost, OLs executed for the Department of Commerce (DOC) require prior DOC/Washington approval, except for renewals occurring automatically under the initial lease terms.

f.  OLs executed for the Department of Defense (DoD) require prior DoD headquarters approval.  This requirement applies to all leasing actions abroad, including lease renewal and termination.

15 FAM 312.8  Waivers and Approvals for Operating Leases (OLs)

15 FAM 312.8-1  Leases with Rents Exceeding Allowable Amount

(CT:OBO-60;   11-02-2017)

a. Authority:  Under 22 U.S.C. 301, the Secretary of State, the Under Secretary for Management (M), or the OBO Director must approve and report to Congress any real property lease in the name of the United States of America requiring an annual payment exceeding $50,000, and any lease crossing the $50,000 per year threshold during the term of the lease.  By law, this authority cannot be delegated other than to M or the Director of OBO.

b. Approval required:  Leases in the name of the United States of America that (a) exceed $25,000 per year or (b) the rental benchmarks for post, require prior approval, notwithstanding the increase to $50,000 provided by Public Law 102-138, which amended 22 U.S.C. 301.  The Department vests OBO with authority to grant approvals or waivers of this requirement for all personnel under the COM’s authority (except USAID).  USAID/W - M/MS/OMD approves and oversees USAID’s leases signed by USAID officials.  The prior approval requirement also applies to lease renewals exceeding $25,000, or the rental benchmarks for post, including leases initially approved.  (See 15 FAM 320 for procedures for requesting approval.)

15 FAM 312.8-2  Residential Leases Exceeding Space Standards

(CT:OBO-60;   11-02-2017)

a. General policy:  Any lease for residential housing must be within the space standards in 15 FAM 237, or be justified on the basis of cost effectiveness (for example, where State can lease larger units for lower costs).  There must be lease-waiver approval for any leases exceeding standard assignments, regardless of cost or the excess over the space standard maximum.  (See 15 FAM Exhibit 237(1) and 15 FAM Exhibit 237(2).)  This policy applies to all agencies represented at post.  U.S. Government leases exceeding the space requirements require waivers or prior approval.  For State, OBO approves such leases; USAID/W - M/MS/OMD approves such leases for USAID.

b. Other waivers and approval requests:  Posts must request approval for property leases exceeding space standards under the circumstances listed in 15 FAM 320.

15 FAM 313  ADDITIONAL LEASING REQUIREMENTS

15 FAM 313.1  Commissioning, Alterations, and Improvements to Operating Lease (OL) Properties

(CT:OBO-94;   09-18-2019)

a. Missions may make minor improvements and alterations (known as "commissioning") when a lease is initially acquired and brought into the housing pool, provided structural alterations to the building are not involved.  Such commissioning activities must be in accordance with post's published commissioning policy and abide by the regulations in 6 FAH-5 H-520.  Each post's policy will document the average commissioning cost, as well as the funding source responsible for paying for the work.  Security upgrades for replacement leases are funded by DS, and guidelines on residential security activities can also be found in 6 FAH-5 H-520

b. Post must establish the base rent before discussing proposed alterations.  Since some commissioning work will increase the property's value, post should attempt to have the landlord perform the work at no cost.  However, if the list of required upgrades is substantial, the landlord will likely require some amount of reimbursement from the U.S. government.  If the landlord agrees to perform the commissioning work for an agreed upon amount, that amount must be identified separately from the rent in the lease contract.  The intention is to avoid mixing rent, which changes based on market forces, with commissioning or tenant improvement costs, with are a fixed, one-time expense.  Improvement costs paid to the landlord must be funded as a one-time, up-front payment that is documented in the lease agreement separately from the rent.  Non-security alterations should be documented separately from security-driven alterations.  Payments to the landlord for security and non-security upgrades should be funded by the responsible entity, in accordance with 6 FAH-5 H-520

c.  If the landlord will not perform the commissioning work, post management may undertake the work and consider possible negotiating tactics such as asking for a rental rate reduction or extended rent-free period, thus compensating the U.S. government for property improvements benefitting the landlord.  The funding source used by post to perform the work must follow 6 FAH-5 H-520

15 FAM 313.2  Preference for Five-Year Minimum Term

(CT:OBO-60;   11-02-2017)

To maximize the duration and value of the U.S Government’s investments in leased housing, posts must make every effort to lease appropriate housing for five years or more, amortize make-ready and security upgrade costs, and negotiate more favorable lease terms.  Lease terms do not have to match the standard length of a tour of duty and should be negotiated to match post’s longer term staff housing needs.  Leases may be negotiated for longer than five-year terms, as long as they remain operating leases and there are appropriate lease termination rights.

15 FAM 313.3  Leases of Designated Residences

(CT:OBO-60;   11-02-2017)

Posts must have prior OBO approval for new leases for designated residences, which are residences only for the following officers:

(1)  Ambassador;

(2)  Deputy chief of mission;

(3)  Consul general (when principal officer);

(4)  U.S. representative to an international organization abroad (when principal officer); and

(5)  Marine security guards (see major lease cable process in 15 FAM 311.5).

Posts must carefully consider these leases, since they normally involve significant costs for additional furniture, furnishings, and equipment (FF&E), as well as unbudgeted costs associated with the move.  To the extent possible, all new or replacement-designated residences, defined in 15 FAM 235.2, must meet the Architectural Barriers Act of 1968.  (See 42 U.S.C. 4151, et seq.)

15 FAM 313.4  Letters of Intent to Lease

(CT:OBO-60;   11-02-2017)

Since the legality and potential financial risk of letters of intent vary significantly from country to country, submit all letters of intent to OBO/PRE/RPL for approval before issuance.  For letters of intent concerning USAID’s leases, USAID missions must initially consult with their regional legal advisor.

15 FAM 313.5  Retention of Leases Vacant Between Occupants

(CT:OBO-60;   11-02-2017)

If post deems it in the U.S. Government’s best interests, post management may retain leases on units that will be left vacant for short periods between employee departures and arrivals.  Vacancy periods exceeding 90 days require OBO approval.  (See 15 FAM 160 for funding responsibilities.)

15 FAM 313.6  Parking for Privately Owned Vehicles (POVs)

(CT:OBO-94;   09-18-2019)

a. If the U.S. Government owns or leases a residential property and the residence does not include parking facilities, the U.S. Government will pay for garage or parking space for one privately owned vehicle (POV) for employees occupying the property.  Parking spaces for POVs are not authorized for individual U.S. Marine security guard (MSG) watch standers.

b. The agency head must first approve a garage rental as a necessary provision to employees on living quarters allowance or overseas housing allowance (LQA/OHA).  If the agency head grants approval, the Department's Standardized Regulations (DSSR) authorizes the employee or the employee’s agency to rent garage space for one privately owned vehicle (POV), regardless of whether such space is included with the quarters.  (See the allowance rate set in the DSSR, subchapter 130, Living Quarters Allowance, section 131.2.  Also see DSSR, U.S. Government Civilians, Foreign Areas, Chapter 100, and the Office of Allowances in the Bureau of Administration.)

c.  Providing for POV parking at the workplace is not a U.S. Government obligation, either in Washington, DC or abroad.  However, security concerns at many overseas locations may require onsite POV parking.  When deemed appropriate, onsite POV parking should be included as a new facility design component.  If such parking facilities are not otherwise available, post’s employee association may acquire such space for leasing to employees.

d. In some cases, there are security concerns with on street parking and while employees are walking to the compound entrance.  In these circumstances, POV parking on or immediately adjacent to the chancery, consulate, or annex compounds may be required to mitigate these concerns.  Vehicles coming onto the compound must be adequately screened, per 12 FAH-5 H-400.  If the post wishes to facilitate employee travel to and from work, consider these possible alternatives:

(1)  When consistent with guidance in 14 FAM 432, the post may provide reimbursable home-to-office-to-home transportation for employees; and

(2)  An employee association may lease offsite parking for POVs and charge a fee to post employees.  Such facilities must be located at least 100 feet from any U.S. Government office building.  The employee association may request that DS fund security improvements, including guard services, lighting, closed-circuit televisions, and access controls.

15 FAM 313.7  Recreational Facilities

(CT:OBO-60;   11-02-2017)

a. Post management may request approval and funding to acquire recreational facilities at hardship posts and at posts where recreational facilities for U.S. Government employees are nonexistent or very expensive.  (See 6 FAM 500 for detailed guidance.)  The RSO/PSO must review post’s recreational facility proposals for security considerations before approving.  Post must then submit the proposal to OBO/PRE/RPL.  USAID/W – M/MS/OMD reviews USAID facility proposals for technical and funding considerations.

b. Employee recreation associations may acquire recreational facilities with the RSO/PSO’s approval.  OBO must review recreational association facility proposals if (a) construction or placement is on U.S. Government-owned (GO) or CL property, or (b) where such construction or placement affects the boundary walls, access, or other aspect of a neighboring GO/CL property.  (See 6 FAM 524, paragraph b, and 6 FAM 526, paragraph a.)

15 FAM 313.8  Rental Agents

(CT:OBO-60;   11-02-2017)

Although employing an agent to obtain a lease is not prohibited, the policy is to avoid this service and resulting cost where there is no cost advantage to the U.S. Government.  In any case, only a reputable, licensed, and/or accredited rental agent will be paid, and only in accordance with a recognized local practice, verified in advance of engaging the agent.  Fees might be payable in full by the landlord, by the lessee, or divided between the two.  Determine the responsibility for fee payment in advance and in writing.  Pay rental agents from the same fund as the basic lease.

15 FAM 313.9  18 Months Prior Notification

(CT:OBO-94;   09-18-2019)

For nonresidential properties or designated residences, post must notify OBO/PRE/RPL 18 months prior to the expiration of every major lease, or the expiry of the last renewal period.  The notification must contain post’s intentions regarding the property.  Options include:

(1)  Terminating the lease and surrendering the property;

(2)  Renewing the lease;

(3)  Extending the expiring lease through an agreed amendment;

(4)  Signing a new lease;

(5)  Retaining the space and consolidating occupants of other U.S. Government-leased or -owned space into the leased space; or

(6)  Negotiating new lease terms.

This situation creates an opportunity to negotiate an increase or decrease in landlord services (depending on the circumstances), as well as space upgrades.  If post’s intention is anything other than to stay in place and renew, OBO/PRE/RPL and post need substantial time to conduct due diligence, plan, negotiate, design, fund, and fit out the new or additional space.

15 FAM 314  GUIDELINES FOR ESTABLISHMENT OF U.S. GOVERNMENT LEASING PROGRAMS

(CT:OBO-60;   11-02-2017)

a. In addition to or in place of GO, CL, and LQA housing abroad, posts must establish an operating lease housing program when one or more of the following conditions prevail:

(1)  Host-country laws prohibit individuals from leasing housing on their own;

(2)  Limited housing is available;

(3)  There are difficult and complex local rental laws; or

(4)  Substantial make-ready and/or security upgrade funds are required to bring residential properties up to acceptable standards.

    Prior approval of each parent agency is required for conversion of its LQA housing.

b. When requesting approval for a U.S. Government leasing program, posts must submit information on the following factors to OBO/PRE/RPL:

(1)  Comparative costs of present and proposed housing programs;

(2)  Availability of suitable leased housing;

(3)  Security;

(4)  Employee and family fire protection;

(5)  Employee and family life safety, comfort, and morale;

(6)  The workload impact on the administrative staff, including need for additional positions (if any);

(7)  An estimate of the average amount of staff time that will be spent negotiating and communicating with landlords;

(8)  Increased travel and work time of GSO personnel; and

(9)  U.S. Government-owned or leased properties in the inventory that might satisfy the requirement.

c.  Posts must also consider whether the U.S. Government will furnish such leased quarters.  Post should discuss funding of furniture, furnishings, and equipment (FF&E) for newly leased living quarters with the regional bureau and parent agencies.  If post leases landlord-furnished units, the furniture rental portion of the annual lease’s cost must be itemized separately from the base rent.  The appropriate regional bureau or parent agency will fund the separate furniture rental portion.

15 FAM 315 THROUGH 319  unassigned


 

15 FAM Exhibit 312.2  
Lease Request Format for Nonresidential Space

(CT:OBO-60;   11-02-2017)

a. All leasing actions for nonresidential space, whether a new lease, a lease renewal, or a replacement lease, regardless of the property size or cost, require the advance approval of the Department of State’s Bureau of Overseas Buildings Operations (OBO), regional bureaus, Bureau of Diplomatic Security (DS), and the parent agency, if applicable.

b. This exhibit lists the information and format required for submitting a request to OBO.  For USAID properties, send requests to the Overseas Management Division, Office of Management Services, Bureau for Management, USAID/Washington (USAID/W – M/MS/OMD).  This exhibit does not address requirements for capital leases.  Information required for CLs is given in 15 FAM 332 and does not apply here.

c.  Posts must obtain approval of both OBO and DS’s Project Coordination Division in the Office of Physical Security Programs (DS/PSP/PCD) before signing a lease for nonresidential space.  Information that posts provide in accordance with the E-LWR application form must go to both OBO and DS.  DS/PSP/PCD will advise posts if any additional information is required.

d. For all major leases submitted via cable request, OBO will procure an appraisal, market study, or other research as needed (see 15 FAM 311.5).

e. Leases for nonresidential space often involve terminology that is not used in standard lease formats.  To permit a detailed review of new leases, posts must submit these landlord leases well in advance of the new lease deadline. OBO/PRE/RPL will support post in negotiating acceptable and appropriate lease language whenever necessary.

f.  Posts must submit requests via the E-LWR application, completing each item with the information requested, or else it will be returned to the post until all required information is included.

g. Send the E-LWR to the Office of Real Property Leasing, in the Directorate for Planning and Real Estate, in the Bureau of Overseas Buildings Operations (OBO/PRE/RPL) for action.

 

UNCLASSIFIED (U)