15 FAM 350
Lease Agreements
(CT:OBO-99; 04-14-2020)
(Office of Origin: OBO)
15 FAM 351 Model Standard Lease
(CT:OBO-99; 04-14-2020)
Post must read through the model standard lease and all the instructions in their entirety before drafting and negotiating any lease.
MODEL STANDARD LEASE
Lease No.: ________________
Fiscal Data: ________________
LEASE AGREEMENT
between
___________________________________
and
THE UNITED STATES OF AMERICA
ARTICLE ONE: PARTIES
This lease (hereinafter the “Lease”) is entered into by and between [name and address of Landlord], for himself/herself/itself, his/her/its heirs, executors, administrators, successors and assigns, hereinafter referred to as “the LANDLORD,” and the United States of America, acting by ________________of the Embassy/Consulate General/Consulate/USAID Mission of the United States of America at ________________, hereinafter referred to as “the TENANT” and, together with the LANDLORD, as “the parties.”
ARTICLE TWO: DESCRIPTION OF PREMISES
A. The LANDLORD hereby leases to the TENANT the following described Premises and their appurtenances (hereinafter the “Premises”) to be used as a United States diplomatic establishment and for such other purposes as the TENANT may desire:
1. Legal Description: [Official title/deed description]
2. Physical Description: [Actual structures]
3. Size of leased Premises: [in square meters or feet - rentable area as agreed with the LANDLORD, gross area as per FAM, and net area as per FAM, as well as percentage of total rentable building area if relevant]
4. Additional Property: [Nonstructural property, e.g., generators or water tanks]
B. A floor plan of the leased Premises with dimensions, as well as inventories and condition reports of the Premises, including any mechanical or electrical equipment, furniture, and furnishings provided by the LANDLORD, as they now exist, signed by both parties, are attached to and made part of this Lease as Attachments A (floor plan) and B (inventories and condition reports).
ARTICLE THREE: LEASE TERM
The initial term of
this Lease shall be for ____ months/years, beginning
____________, 20__, and ending ________________, 20__.
ARTICLE FOUR: LEASE RENEWAL
A. The LANDLORD hereby grants the TENANT the unconditional right to renew this Lease Agreement under these same terms and conditions, including rent for ___ further period[s] of ___ years ending on [date].
B. To renew this Lease, the TENANT must notify the LANDLORD in writing, at least thirty (30) days prior to the date the lease term or any renewal period would otherwise expire, that the TENANT is exercising its option to renew. Such notice may be delivered to the LANDLORD in person or to the LANDLORD’s address listed in Article 18.
ARTICLE FIVE: PAYMENT
The TENANT shall pay the LANDLORD as follows:
A. Base Rent -The base annual rent for the initial lease term is _____. The base annual rent in any renewal term(s) shall be as provided in Article 4. Rent in the initial and renewal terms will be paid in [monthly/quarterly/tri-annual/semi-annual/annual] installments of ____ [state amount and currency].
B. In addition to and separate from the base rent, the TENANT agrees to pay the following expenses, none of which are included in or affected by the base rent or any escalations thereof:
i. Building Operating Expenses For Common Areas. If applicable, where the leased Premises are or will be part of a multi-tenant building or development, the initial estimate for annual building operating expenses in relation to the leased Premises is ____, and will cover the following costs in respect of any common areas: utilities, janitorial activities, landscaping, insurance, property taxes, salaries for LANDLORD staff and contractors, building systems service contracts and maintenance of the property’s common spaces which are not leased by the TENANT, elevators, swimming pool upkeep, exercise facilities, façade, signage, etc. [see instructions for allowable operating expenses]. It will be paid [monthly/quarterly/tri-annually/semi-annually/annually] in equal amounts.
ii. Non-rent Expenses Paid to LANDLORD for the Leased Premises. If applicable, the following expenses shall be paid directly to the LANDLORD. They are separate from base rent and building operating expenses, and are not subject to rental escalations of any kind. All amounts payable hereunder shall reflect actual expenses paid by the LANDLORD, based on [CHOOSE ONE: “TENANT consumption, as measured for the TENANT’s leased space by individual utility meters on or part of the premises” OR “the percentage of space occupied by the TENANT relative to the total area of the building”]. These non-rent expenses, listed below, will be paid on the following schedule:
EXPENSE AMOUNT SCHEDULE
|
VAT or GST on rental payments, if applicable * |
$ |
|
|
Utilities paid to the LANDLORD |
$ |
|
|
Furniture [if LANDLORD furnished] |
$ |
|
|
[If applicable: Others identified by the parties] |
$ |
|
*Without prejudice to exemptions to which the TENANT is entitled under international law or otherwise.
iii. Non-rent Expenses Paid to Third Parties for the Leased Premises. If applicable, the TENANT agrees to pay the following expenses directly to the appropriate supplier or service provider: broker’s fees; Home Owner’s/Condo/Management fees paid directly to the association; consumption charges for electricity, water, gas, sewage, and/or trash paid directly to the service provider based on consumption as measured for the TENANT’s leased space; phone, internet and/or cable TV.
C. Annual Review of Building Operating Expenses - In the first month of each tax year, the LANDLORD will submit operating expense receipts to an independent accounting firm for auditing, to be completed before the end of the second month of the relevant tax year. The parties shall share the cost of the audit equally. If the audit reveals that the LANDLORD justifiably paid more in operating expenses than the TENANT remitted during the year, the TENANT will pay the difference. If the audit reveals that the LANDLORD paid less in legitimate operating expenses than it collected from the TENANT, the LANDLORD will credit or refund any excess operating expense funds to the TENANT.
The actual operating expenses of each year, confirmed by the audit, will be the basis for the estimate of operating costs for the subsequent year. These expenses are not subject to any rental escalation.
D. Commissioning– In addition to and separate from the above, the parties agree that in consideration of the rents to be paid under the Lease, the LANDLORD shall perform the following works [describe in enough detail to ensure that LANDLORD's work will meet U.S. Government requirements if done according to specification] no later than [date] at the LANDLORD’S sole cost and expense:
1. [security upgrades];
2. [fire/life/safety modifications]
3. [exterior landscaping or facility improvements]; and
4. [exterior lighting/ generator/ other upgrades/improvements].
Notwithstanding any other provision of this Lease, no rent, operating expenses, or other similar amounts shall be due or payable in respect of the period before the LANDLORD has completed, and the TENANT has accepted in writing, the above works, if applicable.
E. Annual Appropriations - All financial obligations of the TENANT resulting from this Lease are subject to the availability of funds appropriated annually by the Congress of the United States of America.
ARTICLE SIX: WARRANTIES
A. The LANDLORD warrants that it is the sole and lawful owner of the Premises and that it is duly authorized and able to enter into this Lease and perform its obligations hereunder, and that this Lease and the TENANT’s rights hereunder do not and will not conflict with any rights of LANDLORD or any third party or governmental entity. The LANDLORD also warrants that the TENANT shall peaceably enjoy possession of the Premises for the Lease term (and any extensions thereof) without any interruption or disturbance from the LANDLORD or any other person claiming by, from, through, or under the LANDLORD or otherwise. The LANDLORD further warrants that it will hold the TENANT free and harmless from any and all demands, claims, actions or proceedings by any other party in regard to the leased Premises.
B. The LANDLORD will handle and settle or otherwise dispose of all demands, claims, actions, or proceedings by others in respect of the TENANT’s right of quiet possession. If the TENANT has notified the LANDLORD in writing of the demand, claim, action or proceeding, and the LANDLORD has failed to take timely action to handle, settle or otherwise dispose of such demand, claim, action or proceeding, then the TENANT may defend its right to quiet possession, and the LANDLORD agrees to reimburse the TENANT for any and all costs incurred thereby (including, without limitation, all attorney’s fees and costs) as soon as practicable after the TENANT’s presentation of its claim for such expenses.
C. The TENANT warrants that the person executing this Lease on its behalf has all requisite power and authority to enter into this Lease on behalf of the United States of America.
ARTICLE SEVEN: LANDLORD RIGHTS AND RESPONSIBILITIES
A. Right of Entry. For the purpose of maintaining the Premises, the LANDLORD reserves the right to enter the Premises to inspect and make any necessary repairs, so long as such entry is at prearranged times, with the consent of the TENANT, and, at the TENANT’s discretion, in the presence of a TENANT employee. The TENANT’s consent shall not be unreasonably withheld. The LANDLORD may not, however, gain access to sensitive or secured areas, as determined by the TENANT in its sole discretion.
B. LANDLORD-provided services. The LANDLORD shall furnish or otherwise provide to the TENANT the following utility connections or other services during the Lease term: ___________________________________. These services will be provided at no additional cost to the TENANT.
C. Maintenance Responsibilities. The LANDLORD shall, at its own cost and expense, be responsible for all maintenance, structural work, and repairs to the Premises that are not the responsibility of the TENANT under this Lease. This includes, but is not limited to, maintenance and repair of the following:
1. structural elements such as walls, ceilings, roofs, floors, and foundations;
2. building systems such as electrical distribution, plumbing, ventilation, heating, and air conditioning, and associated fixtures;
3. equipment such as elevators, escalators, and LANDLORD-supplied generators, air-conditioning units, water filtration systems, laundry facilities, and kitchen appliances; and
4. fire warning and protection systems.
The LANDLORD acknowledges that fulfillment of all of its obligations hereunder, including keeping the building, its systems, and all common and external areas thereof in good repair and tenantable condition, is a fundamental condition of this Lease and that this obligation must be fulfilled to make the Premises appropriate for use by the TENANT.
D. Responsibility for Damages. The LANDLORD will be responsible for any damages caused by its failure to maintain the Premises in accordance with paragraph C above, the breakdown of any building systems, or any failure to maintain the common areas of the Premises. The LANDLORD accepts full and sole responsibility for any claim arising in connection with damage or injury sustained through the use of public entrances, stairways, elevators, hallways and conveniences. The LANDLORD shall not be responsible for interruptions in utilities, beyond LANDLORD’s control, supplied by municipal sources.
E. Emergency Repairs.
i. “Emergency”: In this context, emergency means any physical condition or event that renders all or a significant portion of the Premises substantially unusable by the occupants for the intended purpose, taking into account prevailing weather and other natural conditions.
ii. The LANDLORD or its authorized representative must respond to the TENANT’S notice of an emergency by visiting the property within eight (8) hours of being notified in any manner. The LANDLORD agrees to complete, at its sole expense, emergency repairs within forty-eight (48) hours after receiving notice from the TENANT, except that where repairs cannot be completed within forty-eight (48) hours, the LANDLORD shall perform all necessary temporary repairs to prevent further deterioration of or damage to the Premises or their contents within the same forty-eight (48) hours, and within the following forty-eight (48) hours present a schedule, reasonable in the circumstances and acceptable to the TENANT, for completing all required repairs.
iii. For any emergency repairs that the LANDLORD is responsible for but does not handle in this manner, the TENANT may undertake the repairs at the LANDLORD’s sole expense. Any funds expended by the TENANT in this regard shall be deemed prepaid rent and the next rental payment shall be reduced by that amount. If all rental payments have been made, or the amount expended exceeds the amount of any remaining rental payments, the LANDLORD shall make a direct refund to the TENANT.
F. Non-Emergency Repairs.
i. Within seventy-two (72) hours of receiving written notice from the TENANT of the need for specific non-emergency repairs, the LANDLORD shall provide a schedule for completing all required repairs within a further seven (7) business days for acceptance by the TENANT.
ii. For any repairs that the LANDLORD is responsible for but does not handle in this manner, or complete as required, the TENANT may undertake the repairs at the LANDLORD’s sole expense. Any funds expended by the TENANT in this regard shall be deemed prepaid rent and the next rental payment shall be reduced by that amount. If all rental payments have been made, or the amount expended exceeds the amount of any remaining rental payments, the LANDLORD shall make a direct refund to the TENANT.
G. Taxes, Fees, and Assessments. The LANDLORD accepts full and sole responsibility for the payment of all fees, taxes, levies, duties, and other charges of a public nature that are or may be assessed against the property, including all use, ownership, and property taxes. Further, all expenses, if any, incurred in connection with the execution or registration of this Lease, including without limitation notarial charges, registration charges, transaction taxes, stamp duties, or other fiscal charges, shall be paid by the LANDLORD.
H. Registration. If local law permits the LANDLORD to register this Lease, the LANDLORD warrants that it will do so at its sole expense, and, if so required by the TENANT in writing, the LANDLORD will provide the TENANT proof of registration within sixty (60) calendar days, or as provided under local registration procedures, following the execution of this Lease or renewals thereof.
I. Claims. The LANDLORD accepts full and sole responsibility for any claims arising from the TENANT or from third parties for damage or injury sustained when the LANDLORD has failed to maintain or repair the Premises or any systems or common areas as required by this Lease. The LANDLORD also accepts responsibility for damage or injury sustained by the TENANT or third parties and resulting from the negligence or willful acts of the LANDLORD, LANDLORD’s agents, or employees.
ARTICLE EIGHT: TENANT RIGHTS AND RESPONSIBILITIES
A. The TENANT shall have the right, during the existence of this Lease, to erect structures, additions and signs, to make alterations, and to attach fixtures in or upon the Premises. This includes the right to affix a flagstaff, a U.S. flag, a U.S. seal, and office signs and insignia on the Premises leased. Such fixtures, additions, or structures placed in or upon or attached to the said Premises shall be and remain the property of the TENANT and may be removed before, at the time of, or within a reasonable time after the Lease or any extension thereof expires or is terminated.
B. The TENANT shall, unless specified to the contrary, maintain the said Premises in good repair and tenantable condition, defined as minor maintenance such as trash removal, sweeping or vacuuming floors, general lawn and yard care if the Premises consist of a single-family home, cleaning up after pets if applicable, cleaning A/C filters, repairing damage caused by the TENANT’s use beyond normal wear and tear, and replacing light bulbs during the continuance of this Lease. The TENANT is not responsible for damage caused directly or indirectly by the elements, force majeure, or circumstances or parties not under the TENANT’s control.
C. The TENANT may request and perform on an annual basis, or more frequently when special circumstances warrant, a visual inspection and testing, if applicable, of all building systems, including electrical, plumbing and fire suppression systems, serving all common areas, parking spaces, and the Premises. The LANDLORD shall make these systems accessible to the TENANT during normal business hours, and immediately upon request by the TENANT in case of an emergency at any other time.
ARTICLE NINE: ASSIGNMENT AND SUBLEASE
A. The TENANT may at any time assign its interest in the Premises or any portion thereof or sublet the Premises or any portion thereof to any party without the prior consent of the LANDLORD.
B. If the LANDLORD intends to assign its rights and responsibilities under the Lease to a third party, or if the LANDLORD intends to transfer its interest in the Premises to a third party by any method, the LANDLORD shall give to the TENANT written notice of the identity of such third party at least ninety (90) days before to the transfer or assignment. The TENANT agrees to keep this information confidential until after the transfer is complete. The TENANT may, within ninety (90) days of receipt of the notice, terminate the Lease.
C. In the event of any assignment or other transfer referenced in paragraph B, the LANDLORD shall procure the written agreement of the assignee or transferee to assume and carry out all of the covenants and obligations of the LANDLORD under this Lease. The LANDLORD shall provide a copy of such agreement to the TENANT on or before the date of such assignment or transfer.
ARTICLE TEN: PURCHASE OPTION
A. The LANDLORD hereby grants to the TENANT, in consideration of this Lease and the rental rates agreed to above, an irrevocable and firm option to purchase the Premises covered by this Lease (the "Option"), in fee simple absolute (complete, absolute, and perpetual ownership or its local equivalent), free of all liens and encumbrances, and including land, improvements and all appurtenances. The Option may be exercised by the TENANT by written notice at any time during the Lease and any extensions and renewals thereof.
B. TENANT's Election to Exercise Option: The decision to exercise the option to purchase is at the sole discretion of the TENANT. This article shall not be construed to create any obligation by the TENANT to exercise the option to purchase the premises or to create any right in the LANDLORD to compel a sale.
C. Purchase Price: The purchase price ("Purchase Price") for the Premises shall be fair market value as defined in Article 20(C) (2). The parties shall attempt to agree through negotiations on the fair market value within forty-five (45) calendar days after the TENANT formally exercises this option to purchase. If the parties do not agree on the fair market value within this time, they must use the process in Article 20.
D. Closing Schedule: The purchase and sale of the Premises shall be closed and consummated at a place and at a time (the “Closing” and the “Closing Date”) designated by the TENANT. If the parties agree to the Purchase Price within the forty-five (45) calendar days allowed under paragraph C above, Closing shall occur within thirty (30) calendar days after the date on which agreement was reached on the Purchase Price, or, if more than thirty (30) days is required under local law and procedures, then as soon as legally possible. If the parties use Article 20 to determine the Purchase Price, the Closing shall occur within thirty (30) calendar days of the date on which the Purchase Price was settled thereunder, or, if more than thirty (30) days is required under local law and procedures, then as soon as legally possible.
E. At Closing, the transaction shall be consummated as follows:
(i) The LANDLORD shall convey to the TENANT fee simple title to the Premises (complete, absolute, and perpetual ownership or its local equivalent), free of all claims, liens, and encumbrances of any kind, by warranty deed or local equivalent; transfer vacant possession; and register said transfer if permitted by local law;
(ii) The TENANT shall pay the Purchase Price after all adjustments and pro-rations provided for in the Lease and any other pro-rations customary in the same city for similar transactions;
(iii) The LANDLORD agrees to make a pro rata refund of any rent or other lease payments made for periods after such Closing Date; and
(iv) The LANDLORD shall perform all additional acts, and execute and deliver all additional documents, as the TENANT may reasonably require to vest fully in the TENANT, and assure TENANT of, full right, title, and interest in and to the Premises.
ARTICLE ELEVEN: RISK OF LOSS AND INSURANCE
A. The LANDLORD shall bear responsibility for all risk of loss of or damage to the Premises for the entire term of this Lease arising from any causes whatsoever, other than TENANT fault, including, but not limited to: fire; lightning; storm; tempest; explosion; riot; civil commotion; malicious or criminal acts of destruction; bursting or overflowing of water tanks, apparatus or pipes, boiler or machinery; flood; labor disturbance; earthquake; and any other casualty or Act of God.
B. The LANDLORD shall adequately insure the Premises against all risks enumerated above and all risks normally covered under standard property insurance. The LANDLORD shall also carry adequate personal injury and liability insurance to cover all risks for which the LANDLORD is responsible. Evidence of the LANDLORD’s insurance coverage shall be furnished to the TENANT within twenty (20) days after the Parties sign the Lease. The TENANT shall thereafter be entitled to require proof at reasonable intervals that the policy remains in force, and to withhold rent until the LANDLORD provides such proof.
C. Each party, respectively, shall be liable for damages to the leased Premises caused by its own fault or negligence, or that of its agents or employees.
ARTICLE TWELVE: DESTRUCTION OF PREMISES
A. Whenever the Premises or any essential part thereof shall be destroyed or rendered unfit for further tenancy through fire, vandalism, earthquake, flood, storm, war, civil disturbance, Act of God, or other similar casualty, this Lease shall, at the option of the TENANT, immediately terminate upon provision of written notice to the LANDLORD. In the event of such termination, no rent shall accrue to the LANDLORD after it receives the TENANT’s written notice.
B. In case of partial destruction or damage to the Premises from the above-described causes, the TENANT may terminate this Lease only in part at its option and remain in the portion of the Premises that remains tenantable. Should the TENANT elect to remain in Premises rendered partially un-tenantable, a proportionate rebate or reduction of prevailing rental payments will be allowed and will be reflected in an amendment to this Lease to be signed within two (2) months after the damage occurs.
ARTICLE THIRTEEN: LANDLORD'S DEFAULT
In the event the LANDLORD fails to fulfill any of its obligations under this Lease (“default”), and where this Lease specifically provides no other remedy for such failure, the TENANT is entitled either to terminate this Lease, or, at its option, to take any measures which it deems necessary to establish the conditions contemplated by this Lease at the entire expense of the LANDLORD, including offsetting rental payments against any cost incurred by the TENANT due to LANDLORD default. The TENANT will provide written advance notice to the LANDLORD of its intention to take action in accordance with this Article.
ARTICLE FOURTEEN: TERMINATION
A. The TENANT may, for its convenience, terminate this Lease in whole or in part at any time, if it determines that such termination is in the best interests of the TENANT, by giving written notice to the LANDLORD thirty (30) days in advance. If the TENANT terminates this Lease in accordance with this clause, the TENANT shall not be liable for any charges additional to those normally incurred up to the date the Lease is terminated.
B. If the Lease is terminated by the TENANT under any of the TENANT's termination rights contained in this Lease, the LANDLORD shall within thirty (30) days of termination make a pro rata refund of any advance rental or other payments in excess of liabilities accrued to the date of termination.
ARTICLE FIFTEEN: DISPUTES RESOLUTION
A. In the event that any disputes arise concerning the text of this Lease, the English language version prevails.
B. Any disputes arising between the Parties hereto concerning this Lease that cannot be resolved in negotiations between the LANDLORD and TENANT, shall be settled in accordance with the dispute settlement provisions that follow:
1. This Lease is subject to the Contract Disputes Act of 1978, as amended (41 U.S.C. 7101 et seq.) (the “Act”). Except as provided in the Act, all disputes arising under or relating to this Lease shall be resolved exclusively under this Article; the parties hereby waive any right they might have to bring suit in respect of any disputes or claims arising under or relating to this Lease.
2. “Claim,” as used in this Article, means a written demand or written assertion by the LANDLORD or TENANT seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of the Lease terms, or other relief arising under or relating to this Lease. A “claim arising under the Lease,” unlike a claim relating to the Lease, is a claim that can be resolved under an article of this Lease that provides for the relief sought by the claimant. However, a written demand or written assertion by the LANDLORD seeking the payment of money exceeding U.S. $100,000 is not a claim until certified as required by subparagraphs 4(A) through 4(D) of this Article. A voucher, invoice, or other routine request for payment that is not in dispute when submitted is not a claim under this Article. The submission may be converted to a claim under the Article, by complying with the submission and certification requirements of this Article, if it is disputed either as to liability or amount or is not acted upon within a reasonable time.
3. A claim by the LANDLORD shall be made in writing and submitted within six (6) years after accrual of the claim to the TENANT’s Contracting Officer for a written decision. A claim by the TENANT against the LANDLORD shall be subject to a written decision by the TENANT’s Contracting Officer.
4. (a) The LANDLORD shall provide the certification specified in subparagraph 4(C) of this Article when submitting any claim exceeding U.S. $100,000; or regardless of the amount claimed, when using Arbitration conducted pursuant to 5 U.S.C. 575-580 or any other alternative means of dispute resolution (“ADR”) technique that the TENANT elects to handle in accordance with the Administrative Dispute Resolution Act (“ADRA”) (5 U.S.C. 571 et seq).
(b) The certification requirement does not apply to issues in controversy that have not been submitted as all or part of a claim.
(c) The certification shall state as follows: “I certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the Lease adjustment for which the LANDLORD believes the TENANT is liable; and that I am duly authorized to certify the claim on behalf of the LANDLORD.”
(d) The certification may be executed by any person duly authorized to bind the LANDLORD with respect to the claim.
5. For LANDLORD claims of U.S. $100,000 or less, the TENANT’s Contracting Officer must, if requested in writing by the LANDLORD, render a decision within sixty (60) days of the request. For LANDLORD-certified claims over U.S. $100,000, the TENANT’s Contracting Officer must, within sixty (60) days, decide the claim or notify the LANDLORD of the date by which the decision will be made.
6. The TENANT’s Contracting Officer’s decision shall be final unless the LANDLORD appeals or files a suit as provided in the Act.
7. If the claim by the LANDLORD is submitted to the TENANT’s Contracting Officer or a claim by the TENANT is presented to the LANDLORD, the Parties, by mutual consent, may agree to use Alternate Dispute Resolution (ADR). If the LANDLORD refuses an offer for Alternate Dispute Resolution, the LANDLORD shall inform the TENANT’s Contracting Officer, in writing, of the LANDLORD’s specific reasons for rejecting the request. When using arbitration pursuant to 5 U.S.C. 575-580, or when using any other ADR technique that the TENANT elects to handle in accordance with the ADRA, any claim, regardless of amount, shall be accompanied by the certification described in subparagraph 4(C) of this Article, and executed in accordance with subparagraph 4(D) of this Article.
8. The TENANT shall pay interest on the amount found due and unpaid from:
(a) The date the TENANT’s Contracting Officer receives the claim (certified if required); or
(b) The date that payment otherwise would be due, if that date is later, until the date of payment. With regard to claims having defective certifications, as defined in (FAR) 48 CFR 33.201, interest shall be paid from the date that the TENANT’s Contracting Officer initially receives the claim. Simple interest on claims shall be paid at the rate, as fixed by the U.S. Secretary of the Treasury as provided in the Act, which is applicable to the period during which the TENANT’s Contracting Officer receives the claim, and then at the rate applicable for each 6-month period as fixed by the U.S. Secretary of the Treasury during the pendency of the claim.
9. The LANDLORD shall proceed diligently with performance of this Lease, pending final resolution of any request for relief, claim, appeal, or action arising under or relating to the Lease, and comply with any decision from the TENANT’s Contracting Officer.
10. In the event that both parties have complied fully with all the provisions of this Article, but one of the parties is dissatisfied with the final decision, the aggrieved party may, at its option, either appeal the decision to the U.S. Civilian Board of Contract Appeals, or file a suit in the U.S. Court of Federal Claims, as applicable.
ARTICLE SIXTEEN: CHOICE OF LAW
The terms of this Lease shall be construed in accordance with the local laws governing the location of the Premises leased hereunder.
ARTICLE SEVENTEEN: SCOPE OF AGREEMENT AND LEGAL CONSTRUCTION
A. This Lease cancels all other agreements that the parties may have previously entered into which relate to the Premises, and this written agreement constitutes the entire understanding of the Parties.
B. No discussions or representations made during negotiation of this Lease shall be construed to be terms of this Lease.
C. Any changes, additions, variations, or modifications of the terms of this Lease shall not be valid unless made in writing and signed by both parties hereto. For the purposes of this paragraph, only the signature of the [Principal Officer, General Services Officer, Management Officer, USAID Executive Officer, or Mission Director] at the U.S. Embassy/USAID Mission in ______________ shall be deemed valid and binding as against the TENANT.
D. Neither failure of either party to insist upon strict performance of any agreement, term, covenant, or condition hereof, nor failure of either party to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any breach or a waiver of such agreement, term, covenant, or condition in the future.
E. An invalidation of one of the clauses of this Lease agreement shall not be grounds for invalidation of any other clauses.
ARTICLE EIGHTEEN: NOTICES
A. All notices under this Lease agreement, other than legal service of process, shall be delivered to the persons at the addresses set forth below:
For the LANDLORD: For the TENANT:
________________ ________________
Address (Title, i.e., General Services
Officer,
Management Officer, Executive Officer, Mission
Director) at U.S. Embassy/Consulate
General/Consulate/USAID Mission Address
B. Legal service of process upon the TENANT shall be made through the Ministry of Foreign Affairs in accordance with customary international law.
ARTICLE NINETEEN: CERTIFICATION AND DISCLOSURE REGARDING PAYMENTS TO INFLUENCE CERTAIN FEDERAL TRANSACTIONS
A. The LANDLORD, by signing this Lease, hereby certifies to the best of its knowledge and belief that on or after December 23, 1989:
1. No appropriated funds of the United States Government have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency of the United States Government, a member of the United States Congress, an officer or employee of the United States Congress, or an employee of a Member of the United States Congress on the LANDLORD’s behalf, in connection with the award of any United States Government contract (including this Lease), the making of any United States Government loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any such contract, grant, loan, or cooperative agreement.
2. If any funds other than United States Government appropriated funds (including profit or fee received under a covered Federal transaction) have been paid, or will be paid, to any person for influencing or attempting to influence an officer or employee of any agency of the United States Government, a member of the United States Congress, an officer or employee of the United States Congress, or an employee of a Member of the United States Congress, on the LANDLORD’s behalf in connection with this Lease, the LANDLORD shall complete and submit to the Contracting Officer, prior to the execution of this Lease, OMB Standard Form LLL, Disclosure of Lobbying Activities.
3. The LANDLORD will include the language of this certification in any contract awarded by LANDLORD to fulfill LANDLORD’s obligations under this Lease that exceeds U.S. $100,000, and will require that all recipients of such contract awards shall certify and disclose accordingly.
B. Submission of this certification and disclosure is a prerequisite for making and entering into this Lease imposed by Section 1352, Title 31, United States Code. Any person who makes an expenditure prohibited under this provision or who fails to file or amend the disclosure form to be filed or amended by this provision, shall be subject to a civil penalty of not less than U.S. $10,000, and not more than U.S. $100,000, for each such failure.
ARTICLE TWENTY: ESTABLISHING FAIR MARKET RENTAL VALUES AND PURCHASE PRICE
A. Goal - It is the goal of the parties that at all times the rent paid to the LANDLORD for the Premises reflect its fair market rental value (FMRV) and, if the option to purchase is exercised, that the purchase price paid to the LANDLORD reflect the fair market value (FMV) at the time of exercising the option. To achieve this goal, the parties agree to use the following procedures, where applicable, to obtain professional, independent, and fair appraisals.
B. Valuation Committee – Where this Lease expressly requires a determination of fair market rental value and/or fair market value to purchase and the parties are unable to agree on such value(s) through good faith negotiations, the amount shall be determined by a valuation committee of up to three valuers. Each party shall pay the cost of its own valuer. The parties shall share equally in the cost of the third valuer, if needed. The Committee shall be formed as follows:
1. The valuation committee shall start with two valuers.
2. Each party shall name one valuer within thirty (30) calendar days after the end of the period for reaching agreement under Articles 4 or 10. Valuers must be persons with at least ten (10) years’ experience in actively performing valuations of real property similar in location, type, and size to the subject property, and be certified members in good standing of, and/or be certified by, the relevant national Board of Appraisers, the Appraiser General, or relevant Land Valuation Department, or any internationally recognized appraisal institution or entity.
3. Each party must notify the other within forty-eight (48) hours of naming its valuer. Valuations must be completed by both valuers within forty-five (45) calendar days of the appointment date of the second valuer.
4. By or before the end of the forty-five (45) day period in paragraph 3, the parties shall exchange the summary pages of their respective valuation reports at the same time showing the concluded fair market rental value or fair market purchase price. If the values differ by less than 25 percent of the higher value, the final base rent or purchase price will be the average between the two values. If the two values differ by 25 percent or more of the higher value, a third valuer must be selected by the two valuers.
5. The original two valuers must agree on and select a third valuer within thirty (30) calendar days after the expiry of the forty-five (45) day period in paragraph 4. The third valuer must have similar or greater experience and qualifications as the original two valuers. The parties may, but are not required to, share lists of acceptable valuers in preference order and any valuer on both lists shall be the third valuer, and if more than one valuer is on both lists, the valuer with the highest combined preference shall be the third valuer. Each party shall pay half the cost of the third valuer.
6. If the original two valuers are unable for any reason to agree to a third valuer within the allowed thirty (30) calendar days, and the parties have not expressly agreed to extend that period of time, the third valuer will be appointed by the Senior Executive Officer of the relevant national Board of Appraisers, the Appraiser General, or Land Valuation Department. Either party may request the Senior Executive to make that appointment as necessary, and shall simultaneously give the other party notice of the request.
7. The third valuer must review the full appraisal reports of the two valuers named in B.3 above within thirty (30) calendar days of appointment and make a final written determination of the fair market rental value or fair market purchase price within the range of the two existing valuations. The third valuer must provide notice of the final value to both parties at the same time and not later than five (5) calendar days after the end of the review period. The valuation by the third valuer is final and binding. There shall be no appeal to any other authority of the final decision.
C. Criteria for Determination of Fair Market Rental Value and Fair Market Value to Purchase
For the purpose of establishing FMRV to lease and FMV to purchase, the parties shall use the following definitions, and any valuers hired to support this process must use them as well:
1. Fair Market Rental Value (FMRV)
Any reference to fair market rental value in Article 4 shall at all times mean the present rental value, in U.S. dollars or local currency, of this and similar rental properties leased for similar durations, which could reasonably be expected to be realized in the open market as of the effective date of the valuation, assuming a willing tenant and landlord, neither being under any compulsion to lease and both having reasonable knowledge of relevant facts, as determined by independent real estate valuers. Such rental value shall disregard any improvements made, funded, or owned by the TENANT, including without limitation all structures, equipment, installations, systems, furnishings, fixtures, finishes, and security elements.
2. Fair Market Value (FMV)
The fair market value to purchase under Article 10 is the amount in U.S. dollars or local currency which could reasonably be expected to be realized in the open market as of the effective date of the valuation, assuming fee simple ownership (or its local equivalent) and a willing buyer and willing seller, with neither being under any compulsion to buy or to sell, and both having reasonable knowledge of relevant facts, as determined by independent real estate valuers. The value shall disregard any improvements made, funded, or owned by the TENANT, including without limitation all structures, equipment, installations, systems, furnishings, fixtures, finishes, and security elements.
D. Failure to Cooperate in Valuation Process – In the event any party to this Lease follows the above process in good faith, and the other party or its appointed valuer unreasonably fails or refuses to follow the above process, and that failure or refusal lasts for more than thirty (30) calendar days after an explicit action is required, or a party is found at any time to have improperly influenced any valuer or inappropriately revised or altered any relevant document involved in this process, then the party acting in good faith may notify the other party of such non-compliance in writing, in which case the other party shall have five (5) business days to make a written response. Unless such written response satisfies the first party, acting reasonably, of the second party’s compliance, the first party shall have no further obligation to negotiate the rent or purchase price, and the non-complying party shall be deemed to have executed all required transaction documents required to establish and make effective the FMRV or FMV established by the complying party’s valuer.
This Lease shall become effective on the date of the last signature of the parties.
SIGNATURES
IN WITNESS WHEREOF, the Parties or their duly authorized representatives have affixed their signatures below.
LANDLORD: TENANT:
(Typed Name) United States of America
By ________________ _ By ________________
(Typed Name) (Typed Name)
Date: __________ (Title, i.e., General Services Officer, Management Officer, Executive Officer, Mission Director) at U.S. Embassy/Consulate General/Consulate/USAID Mission)
Date: __________
ATTACHMENT A – FLOOR PLAN
[Delete this text before signature. A floor plan is required by Article 2(B) and should be available from landlords of buildings that contain commercial office space, apartments, townhouses, or condos. In regard to designated residences, a floor plan is especially important to determinate the suitability of representational and private spaces, as well as public access and traffic flow.]
ATTACHMENT B – INVENTORY AND CONDITIONS REPORT
[This document, also required by Article 2(B), is created by post. Post and the landlord sign the report separately before attaching it to the Lease, or at the time of signing the Lease. This report confirms the parties’ agreement concerning the existence and condition of landlord-provided equipment and personal property as well as well as the general condition of the entire premises at the start of occupancy. Without this report adequately filled out at the start, claims for restoration and damage become contentious and the U.S. Government often ends up paying the landlord substantial amounts that could have been avoided.]
15 fam 352 notice of renewal
(CT:OBO-99; 04-14-2020)
Letters MUST be delivered prior to the renewal notification date. The right to renew expires once the notification date passes. Post should not wait until the due date to deliver the renewal notice. The right to renew can be exercised weeks or months ahead of the due date. In fact, offering to do so may be a good leverage point in negotiating more favorable terms for the renewal period.
SAMPLE LETTER EXERCISING RIGHT TO RENEW (ON POST LETTERHEAD)
[Landlord name
Address
Email address if in Lease]
Lease No. __________
Street Address _____________
Dated: ______________
Dear [name of Landlord]
The Embassy/Consulate/USAID Mission is pleased to notify you that pursuant to Article 4 of the above Lease, we are hereby exercising our right to renew the Lease for a period of [X] years beginning on [date].
[Read Articles 4 and 5 to determine if rent is settled or not. If so, don’t add anything to the above paragraph. If not, then post should refer specifically to the relevant Article of the Lease and the method to be used to settle the rent, or to the fixed amount stated in the Lease. Follow the lease terms carefully. If there is no change in the rent, then this letter should be sufficient to document the notice. Post must upload a copy to RPA. If the rent will change, or any other lease term or language changes, post must use a formal amendment. In such case, add this sentence:
We will forward appropriate documents for both parties to sign to formalize this action.]
We appreciate your continued support in leasing this property to the United States of America and seek to continue our strong relationship.
Regards,
[Mission officer]
15 FAM 353 Lease Amendment
(CT:OBO-99; 04-14-2020)
Post leasing authority: Under the Foreign Service Buildings Act of 1926, as amended, and by virtue of standing delegations of authority from the Secretary of State authority is delegated to the Director of the Bureau of Overseas Buildings Operations (OBO), to enter into, renew, and amend real property leases abroad. See 15 FAM 311.1. The Director provides authorization via cable or other written communication for posts to execute leases, renewals, and amendments. No lease amendments may be executed by post without OBO authorization, except for such leases that previously did not require authorization and no terms of the lease have changed. All proposed lease amendments and deviations to the model lease that materially alter the rights or obligations of any party, e.g., rent, maintenance, termination, must be submitted to OBO for approval.
(Amend, as appropriate, for use with USAID Leases.)
Amendment No. _________to
Lease No. __________
Date ______________
Post ______________
RPA Prop ID ____________
(1) Reference is made to Lease Number [Lease #] entered into on [Date] between [Name of LANDLORD], LANDLORD, and the United States of America, acting by [insert Name and Title of Officer who acted for the U.S. Government at the time the lease was signed, as reflected therein], TENANT, for [Type of Premises, e.g., apartment or single-family home]) at [address] and amendments to such Lease if any.
(or) In consideration of the LANDLORD providing [e.g., additional services, rentable space, or something else of value] the TENANT hereby agrees to pay additional rent in the amount of __________ (quarterly, annually) commencing on ________ [Date].
(or)
The LANDLORD hereby grants permission to the TENANT to install (air-conditioning, grill bars, shelving, kitchen sink, sanitary facilities, etc.) in the above-mentioned Premises, such installations to remain the property of the TENANT, subject to the TENANT's right to remove them upon termination of the said Lease without obligation to restore the Premises to original condition.
(or)
Article _______ of said Lease is hereby amended to provide for maintenance of the Premises by the TENANT for which the rent shall be reduced to [New Rent] annually, effective [Date].
(or)
Article _______ of said Lease now reads “______________________,” and the Parties now agree that it shall be changed to read “_______________________” as of the date of signing this Agreement.
(or)
On X date, the TENANT duly provided the LANDLORD with notice of its renewal of the Lease for a period of [X] years beginning on [Date]. Pursuant to the terms of the Lease the Parties determined the rent in the renewal period shall be [fill in the amount]. The annual rent stated in Article 5 of the Lease is $XXX and the amount is now changed to $YYY.
(2) Therefore, it is agreed by and between the LANDLORD and the TENANT that the referenced Lease is hereby amended as indicated in (1) above, all other provisions of the said Lease remaining the same and unchanged.
In witness thereof, the Parties have hereunto subscribed their names this __day of [Month][Year].
For the TENANT:
___________________________
[Name and Title]
For the LANDLORD:
___________________________
[Name, Title, and Address]
15 FAM 354 Termination Agreement
(CT:OBO-99; 04-14-2020)
Date ______________________
City _______________________
Lease No. __________________
RPA Prop ID _____________________
(1) Reference is hereby made to Lease number ____________ dated [Date], and Amendments, between (Name of LANDLORD) as LANDLORD and the United States of America as TENANT, providing for the Lease of the following described Premises:
[Brief description of Premises with street address]
(2) The Lease on the above Premises is considered cancelled and terminated effective [Date], and the LANDLORD hereby acknowledges that the Premises (and furnishings) were returned by the TENANT to the LANDLORD on [Date] _______________, in a condition acceptable to the LANDLORD, free of any and all claims against the United States Government or any agency, agent, or employee thereof.
(3) In witness thereof both the Parties have hereunto signed as of the date given below:
DONE AT [City] this [day] of [Month], [Year].
For the TENANT:
___________________________
[Name and Title]
[Post]
For the LANDLORD:
___________________________
[Name, Title, and Address]