22 CAR Part 114 — Real Estate Services

Chapter XVII

Subchapter B

Subpart 1

22 CAR § 114-101 Purpose {#sec-22-car-114-101 omnilex-key=us-ar-regs-official--title-22-part-114--22 CAR § 114-101}

22 CAR § 114-101. Purpose.

(a) This part has been compiled to provide every state department, agency, board, or commission with written standards for the most economical and efficient utilization of space and with written procedures to be followed in leasing that space.

(b) Any reference to the words “the section” within this part shall mean the Real Estate Services Section.

22 CAR § 114-102 Real Estate Services responsibility {#sec-22-car-114-102 omnilex-key=us-ar-regs-official--title-22-part-114--22 CAR § 114-102}

22 CAR § 114-102. Real Estate Services responsibility.

(a) Pursuant to the Building Authority Division Act, Arkansas Code § 22-2-102 et seq., the Real Estate Services Section of the Building Authority Division is the leasing agency for all state entities (departments, agencies, boards, commissions, and institutions of higher education).

(b) The Real Estate Services Section has the responsibility to act as the leasing agent for all state departments, acting either as lessor or lessee, including space in all private sector and public buildings.

(c)(1) The Real Estate Services Section shall, with input from the department, evaluate, determine, and approve the needs of the department.

(2) The Real Estate Services Section shall locate appropriate rental space and act as the agent for the department in negotiation of the lease for the rental space.

(d) Pursuant to Arkansas Code § 22-2-114(a)(2), all state departments shall execute and enter into leases with the Real Estate Services Section when requested for the leasing or renting of space and facilities in any public buildings.

(e)(1) Any department making a request for lease space shall submit justification to the Real Estate Services Section in written form with the signature of the department secretary or authorized designee thoroughly outlining the following information:

(A) The department and division or divisions to occupy the space, including a list of positions to occupy the space and the functions of each position by state employment grade;

(B) The date of the request and the date the space is needed;

(C) The number and phone number of the department contact person;

(D) The type of space needed and the location desired, including any special location factors;

(E) The terms desired, budgeted amounts for rents, operational costs, and anticipated moving expenses; and

(F) Any alterations or special requirements, including parking and storage requirements, telecommunication room, library, hearing room, conference room, etc., and the function of those requirements.

(2) List any other pertinent information that would affect the planning of the space needs and the efficient operation of the department, including special HVAC requirements, i.e., ventilation for specific areas and desired office-to-cubicle ratio.

(3) This written request shall be submitted at least ninety (90) days prior to the date the space is needed.

(4) Requests not containing this information shall be returned to the department without action.

(5) The Real Estate Services Section shall locate appropriate space and negotiate a lease between the facility owner and the department.

(6) If space is available in a public building, the lease will be negotiated for placement in the public building.

(7) If space is not available in a public building, then the Real Estate Services Section shall obtain adequate space in a privately owned facility.

(8) It is unlawful for departments to enter into any lease negotiations with any building owner or manager without the approval of the Real Estate Services Section (see Arkansas Code § 22-2-114(a)(1)).

(9)(A) If such negotiations take place, the lease shall not be ratified.

(B) If the department requests the lease document be ratified, the department shall be required to provide written justification to the Secretary of the Department of Shared Administrative Services for review.

(f)(1) Standards for the utilization of space and the allocation of space to state departments have been approved by the Building Authority Division and are a part of these standards as found in 22 CAR § 114-105.

(2) These standards shall be used as a basis for all planning, leasing of space, allocation of space, and advising state departments on leasing considerations.

(3) When available, the Design Review Section may assist in space planning services through the Real Estate Services Section.

(g)(1) The Building Authority Division has adopted a standard lease form for leasing of privately owned facilities and a standard form for leasing of Building Authority Division owned properties.

(2) Copies of these forms are located at the end of this subpart.

(h)(1) Preferences to leased property within a central business district shall be granted pursuant to Arkansas Code § 22-2-114(a)(5)(A).

(2) The Real Estate Services Section shall grant preferences in accordance with applicable laws and in the following manner.

(3) Guidelines for consideration of lease properties.

(A) Establish a rating system for evaluation.

5 – Excellent. As-is condition meets applicable codes and compliance; premises can easily conform to state’s need and meets space criteria. 4 – Very good. Some modifications are necessary for occupancy but are reasonable and achievable; can conform to the state’s need and criteria. 3 – Acceptable. Numerous modifications and building system replacements or upgrades are necessary to meet codes and compliance, but achievable. Some compromise may be necessary in space planning to satisfy need. 2 – Fair. Extensive modifications are required to meet criteria; space planning for maximum efficiency of space will be compromised; restricting flexibility. 1 – Not acceptable. Modifications required far exceed the feasibility to conform. Structurally inferior and not adaptable to meet the space need and criteria.

(B)(i) Survey area for available properties.

(ii) Upon receipt of space request, the Real Estate Services Section shall research properties available for lease.

(iii) The Real Estate Services Section may choose to advertise the space through the local newspaper or the Building Authority Division website.

(C) Evaluate property:

(i) Survey all properties by visual inspection and assess condition of building systems in consultation with local officials or requesting department;

(ii) Obtain plans or specifications from the property owner, if available;

(iii) Determine property’s ability to conform to space need; and

(iv) Compile a summary of modifications required to conform to state needs.

(D) Obtain proposal:

(i) Provide property owner with a summary of observed modifications recognizing additional modifications may be necessary upon a more extensive inspection;

(ii) Provide property owner with a description of the space request, the specifications, and floor plan, if available;

(iii) Obtain a lease proposal inclusive of the initial recommended modifications and lease criteria; and

(iv) Confirm terms with property owner/agent.

(E) Rate properties by categories:

(i) Divide the available properties into one (1) of two (2) categories:

(a) Located within the central business district (CBD); or

(b) Located outside the CBD (nonCBD); and

(ii)(a) Rate the properties according to the established rating system listed above.

(b) The following factors should be taken into consideration:

(1) Cost-effectiveness by the state to meet the space criteria;

(2) Level of compromise by the state to meet the need;

(3) Specific criteria established by the requesting department; and

(4) Restrictions or impairments in use or access.

(c) Determine the highest rated property for each category (CBD/nonCBD).

(F)(i) Compare proposals.

(ii) The highest rated CBD and nonCBD properties will be compared.

(iii) If the CBD property meets all criteria and does not restrict or impair the services for which the lease is intended or the rental rates are justified in a nonCBD location, the CBD property will be granted the preference.

(iv) Nothing in these guidelines will prevent the state from leasing with a nonCBD property owner in accordance with Arkansas Code § 22-2-114(a)(5)(A).

(i)(1) The Real Estate Services Section may utilize a request for proposal (RFP) selection process when locating lease options in response to a department’s request for lease space more than five thousand square feet (5,000 ft²) or for a term up to ten (10) years.

(2) The Real Estate Services Section:

(A) May use a variety of methods to advertise including:

(i) Local newspapers;

(ii) The Building Authority Division website;

(iii) Social media; and

(iv) Other methods; and

(B) Will provide RFP packages to any property owners or managers interested in submitting a proposal in response to the RFP inquiry.

(3) This procedure awards based on selected criteria evaluation.

(4) Those proposals submitted with the proposed physical address found within the CBD of the requested city shall earn the maximum weighted value for the location criteria of the evaluation portion of the RFP selection process unless otherwise stated.

(5) The lease award shall be given to the proposal which, in the opinion of the Real Estate Services Section and the department, serves the best interests of the state and is in accordance with applicable laws and this subchapter.

(6) Nothing in this section shall prohibit the Real Estate Services Section from negotiating directly with a lessor without utilizing the RFP process if it determines it is in the best interest of the state.

(j)(1) The Real Estate Services Section may utilize a formal bid procedure for the leasing of new construction (contract is between the private lessor and the prime contractor) when locating lease options in response to a department’s request for lease space more than five thousand square feet (5,000 ft²) and for a term of fifteen (15) years.

(2) The bidding and award of contracts under the public works laws do not apply.

(3) The Real Estate Services Section may use a variety of methods to advertise this request for formal bids including local newspapers, the Building Authority Division website, social media, and other methods, and will provide formal bid packages to any interested party.

(4) This is a two-step process:

(A) The site submittal or submittals and approval or approvals; and

(B) Submission of a bid consisting of a price per square foot.

(5) Bidders who obtain an option to purchase the sites they propose shall obtain ownership of the property within the time frame established in the bid criteria upon acceptance of their bid.

(6) The state reserves the right to reject any or all bids and to waive any formalities.

(7) At the public bid opening, the Real Estate Services Section shall open and compare the bids and award the lease to the lowest responsible bidder, but only if it is the opinion of the Real Estate Services Section and the department that the best interests of the state would be served and in accordance with applicable laws and this subchapter.

(8) Nothing in this part shall prohibit the Real Estate Services Section from negotiating directly with a lessor without utilizing the bid process if it determines it is in the best interest of the state.

(k)(1) If determined by the Real Estate Services Section to be in the state’s best interest, the Real Estate Services Section may enter into a negotiated lease for a lease term which is longer than any of the terms stated in subsection (i) or subsection (j) of this section should the lessor provide the state or any entities an option to purchase the premises.

(2) While the lessor and the Real Estate Services Section may negotiate additional lease terms and conditions within the lease or subsequent amendments, the standard terms and conditions contained within the approved lease form at the time of execution shall prevail should any conflict arise between any standard terms or conditions and any nonstandard terms or conditions.

History

• Codification Notes: "HVAC" means heating, ventilation, and air conditioning. Authority: Arkansas Code § 22-2-108

22 CAR § 114-103 Determination of Building Authority Division of desirability of available space {#sec-22-car-114-103 omnilex-key=us-ar-regs-official--title-22-part-114--22 CAR § 114-103}

22 CAR § 114-103. Determination of Building Authority Division of desirability of available space.

(a) Square footage.

(1) A comparison of the square footage required to satisfy department needs with the square footage available in a given facility.

(2) Space leased shall be no more than five-percent less or fifteen-percent greater than the department’s stated needs.

(3) Square footage required shall be determined according to 22 CAR § 114-105.

(b) Analysis of building facilities. An analysis of the sustainable and energy-efficiency qualities and condition of building facilities, including:

(1) Mechanical systems;

(2) Elevators;

(3) Toilets;

(4) Parking;

(5) Lighting;

(6) Public/common areas;

(7) Building envelope (roofs, window wall, windows, and doors);

(8) Location relative to associated departments;

(9) Availability of storage; and

(10) Proximity to the other related offices of association.

(c) Operational cost of occupying the space for the term of the lease:

(1) Annual square foot cost of the leased space;

(2) Cost of interior modifications or TI allowance (tenant improvement) provided by lessor;

(3) The availability of all utility services and their estimated cost if not included in the lease through utility history, if available by the lessor;

(4) Cost of janitorial services if not included in the lease;

(5) Any other factors which would affect the actual cost to the department, i.e., parking, additional electrical requirements, custom furniture and fixtures, etc.; and

(6) The information technology services needed by the requesting department.

(d) Time factors affecting need for space.

(e) Capacity to accommodate future need of the department for space and services.

(f) Handicapped accessibility and special accommodations.

(1) All buildings leased or rented in whole or in part for use by the state under any lease or rental agreement entered into shall be in accordance with the contractual terms and applicable accessibility guidelines.

(2) The lessee shall be required to provide an emergency evacuation auxiliary aid used by those employees who need assistance to safely exit state-owned property during emergency situations.

(3) The lessee is solely responsible for obtaining, maintaining, and training in the use of the auxiliary aid.

(4) Any necessary installation of an auxiliary aid shall be coordinated with the approval of the lessor.

(g)(1) All leases shall be made pursuant to the Governor’s Executive Order 98-04 or Acts 1999, No. 34 to the extent applicable.

(2) Completed disclosure forms and all necessary documentation shall be sent to the Real Estate Services Section.

(3) All lessors and lessees shall be required to complete a disclosure certification form regarding their utilization of services of any real estate broker or brokers for all lease negotiations.

22 CAR § 114-104 Building Authority Division policy for leasing {#sec-22-car-114-104 omnilex-key=us-ar-regs-official--title-22-part-114--22 CAR § 114-104}

22 CAR § 114-104. Building Authority Division policy for leasing.

(a)(1) Pursuant to Arkansas Code § 22-2-114(a)(1), the Real Estate Services Section is the responsible leasing agent for all state departments.

(2) No department, agency, board, or commission may renew or negotiate a lease without the approval of the Real Estate Services Section.

(b)(1) Requests for lease action (lease renewals or requests for new or additional space) shall be submitted to the Real Estate Services Section at least ninety (90) days prior to the date the space request or change is needed.

(2) The request shall:

(A) Be submitted to the Real Estate Services Section; and

(B) Include the information indicated in 22 CAR § 114-102(e).

(3) This information should be as complete and accurate as possible since it will be used to determine the space necessary to meet the needs of the department.

(c)(1) All leases for real property, including but not limited to offices, parking, storage, warehouses, land, antenna, and towers must be approved by the Real Estate Services Section and assigned a Building Authority Division lease number.

(2) The approved lease number must be used by all departments.

(3) The only exception shall be for short-term use of facilities where memoranda of understanding or other agreements may be utilized.

(4) Examples of these short-term use facilities that are exempt from Real Estate Services Section approval include:

(A) Classrooms (from one to nine (1 – 9) months);

(B) Per-seat fees;

(C) Per semester;

(D) School years (nine (9) months);

(E) Short-term specialty classes;

(F) Golf, bowling, gyms, spas for classes;

(G) Conference/meeting rooms (from one to ten (1 – 10) days);

(H) Workshops/seminars;

(I) Fair booths;

(J) Testings;

(K) Graduations;

(L) Ball fields (including seasonal rentals);

(M) Short-term storage (less than one (1) year) including mini-storage where the lease is considered month-to-month providing there is a thirty-day termination clause; and

(N)(i) Modular units (less than one (1) year).

(ii) Leases of modular units (portable buildings) for a period of one (1) year or more shall be submitted to the Real Estate Services Section in the same manner as a traditional office space and shall require division approval (memorandum of understanding exemption).

(iii) The division recommends the lease of modular units should:

(a) Be planned on a temporary basis; and

(b) Not be utilized as a long-term or permanent use of space.

(iv) Examples of temporary use include:

(a) Utilization for disaster relief while a facility is undergoing a capital improvement;

(b) Temporary classroom space due to over-enrollment; or

(c) Temporary use for a site-specific special program.

(d) Lease space will be provided to or negotiated for departments based on the department’s submittal of the completed request for lease space with an authorized signature and the department’s justification for the need.

(e)(1) Space in public buildings shall be negotiated pursuant to Arkansas Code § 22-2-114.

(2) The number of moves will be kept to a minimum and efforts will be made so that functional areas remain as contiguous space.

(f) All leases may be terminated on thirty (30) days’ written notice to the lessor if state or federal appropriations of funds are insufficient for the department to continue the operations for which the leased premises are being used.

(g)(1) When negotiating rental rates, the state should not exceed the rental rate prevailing in the community for comparable facilities.

(2) Annual square foot price limits will be based on current market conditions in a locality and rental rates will vary from city to city in the state.

(3) State policy for rental rates will reflect the state's position as a prime tenant.

(4) All new lease actions shall be supported by documentation which will reflect the lease rates available for comparable facilities in the market at the time the new lease was negotiated.

(h)(1) It is preferable for the private sector lessor to furnish all utilities except telephone and data services and to furnish janitorial service.

(2) Private sector lessors shall be required to provide maintenance of the building and building systems in all circumstances.

(3) When a lease is negotiated in favor of the state involving special consideration for a public advantage such as a significant reduction in rent or an exchange-for-services arrangement, the private sector lessor may be exempt from providing maintenance for the building and building systems if it determined to be in the best interest of the state.

(i)(1) All state departments must receive invoices submitted by the lessor to process rental vouchers.

(2) While rent may be paid monthly or quarterly, prior division approval:

(A) Is required for annual payment or payments; and

(B) Shall be reflected in the lease.

(j) Rentable area shall be computed by the standard method of floor measurement as adopted by the Building Owners and Managers Association International (BOMA), ANSI/BOMA Z65.1-2010, as amended.

(k) Rental overlap, the time between the beginning date of a new lease for different premises and the last date of occupancy for existing premises, shall be held to a minimum and shall only occur when moving arrangements require an overlap.

(l)(1) The Real Estate Services Section will serve as contact between the department and lessor or as the contact between the department and the tenant when the department is the lessor in all matters pertaining to the lease prior to lease execution.

(2) Departments shall be permitted to contact the lessor for day-to-day issues, including but not limited to:

(A) Invoices/payments;

(B) Routine maintenance and repairs; and

(C) Annual inspections.

(3) Departments shall report all nonroutine maintenance and repair issues to the Real Estate Services Section.

(4) The Real Estate Services Section shall act as the liaison between the two (2) parties should lease interpretation and terms enforcement become necessary.

(m)(1) Whenever possible, the Real Estate Services Section shall lease space requiring only renovations necessary to accommodate the requesting department.

(2) Renovations shall always be held to the absolute minimum necessary to allow the department to function in the leased space.

(3) When renovation is necessary, the cost of the renovation shall be borne by the lessor except when the renovation is to accommodate specific department functions which would be of no use or value to future tenants.

(4) It is the policy of the state to encourage the lessor to provide any alterations and improvements required to make the space suitable for the requesting department and to recapture this expenditure over the term of the lease as part of the rent.

(5) Lump-sum payment by the state for improvements shall require prior approval of the division.

(6) After the initial lease is in place and during the lease term, if the department requests tenant improvements, the department must submit to the Real Estate Services Section a Request for Lease Action form containing the information in 22 CAR § 114-102(e).

(7) Once approved by the Real Estate Services Section, a change amendment for the improvements and additional rents will be negotiated with the lessor.

(8) When a department contracts for improvements directly with a contractor and payment is not made through rent:

(A)(i) If the work is estimated over thirty-five thousand dollars ($35,000), but less than fifty thousand dollars ($50,000), a Request for Lease Action must be submitted and approved by the Real Estate Services Section.

(ii) The Request for Lease Action should include a bid tabulation of three (3) competitive bids (all taxes and permit fees are inclusive in the bids), bid specifications and drawings, any disclosure forms required under Governor’s Executive Order 98-04 or Acts 1999, No. 34, to the extent applicable, any required bonds, and the purchase order.

(iii) Any required notice of legal advertisement must be made in accordance with Arkansas laws and rules; or

(B)(i) If the work is estimated to be over fifty thousand dollars ($50,000), the project must be formally bid in accordance with Arkansas laws and rules.

(ii) The information contained in subdivision (m)(10)(A) of this section, above, must be submitted to the Construction Section for review and approval.

(iii) No work may be done until the lease has been amended to allow tenant improvements.

(iv) If the lessor cannot or will not provide for design professional services, the selection of such professionals shall be the responsibility of the department (see 22 CAR § 111-1703).

(v) Plans and specifications shall be made pursuant to Arkansas Code § 22-9-201, which requires observation by registered design professionals for certain levels of expenditures.

(n)(1) Modular office space leased and occupied by state departments for one (1) year or more are considered leased space.

(2) Requests for this type of temporary space should be processed in the same manner as requests for new or additional space.

(3) See subdivision (c)(4)(N) of this section.

(o)(1) Pass-through escalation clauses in which the state agrees to pay all increases in property taxes, services, or utilities shall not be negotiated or approved.

(2) Escalations shall be predetermined and negotiated with the original lease agreement.

(p) Information concerning leases shall be released pursuant to the Freedom of Information Act of 1967, Arkansas Code, § 25-19-101 et seq.

(q)(1) When space has been located which meets the requested criteria, the Real Estate Services Section shall negotiate and prepare for signature the standard state lease agreement.

(2) The agreement shall be signed by the lessor and lessee and approved by the division.

(3) No lease document is valid unless signed by the proper division authorities.

(4) The Real Estate Services Section shall ensure distribution of lease copies to the lessor and lessee.

(r)(1) Departments may enter into leases for residential dwellings or apartment-type facilities for use as living quarters.

(2) Departments shall not enter into a lease for premises located in residential or apartment-type dwellings for any other purpose.

(3) Example. A room in a residence cannot be leased as office space.

(s)(1) All leased premises for departments not located within a state-owned building must be identified with a separate address for each defined premises.

(2) Leased premises shall not be shared with any private entity or use other than for official state or public purposes.

(3) The leased premises shall have a separate entrance from any other place of business unless the premises is supported by funding such as grant programs, stipulated by an agreement with other entities which includes but is not limited to agencies and political subdivisions.

(4) All nonstate lessors or sublessors shall state within the lease agreement their ownership or subletting rights of the leased premises.

(t)(1) While lease agreements may reflect that office furnishings or equipment are being utilized or shared, the lease for such commodities may only be made with approval from the Department of Shared Administrative Services.

(2) Such reflections in the lease agreement for the premises must be identified through an itemized inventory and attached as a lease exhibit.

(3) Lease agreements which combine the use of the premises and commodities are discouraged and should only be done if it is in the best interest of the state.

(4) The use of separate lease agreements for such commodities is encouraged.

(u)(1) Departments entering into memoranda of understanding for the purpose of planning temporary space in the event of disasters shall submit the executed agreement to the Real Estate Services Section even though the division is not a party to the agreement.

(2) Departments shall provide immediate notification to the division upon activation of the agreement due for disaster relief.

History

• Codification Notes: "ANSI" means American National Standards Institute. Authority: Arkansas Code § 22-2-108

22 CAR § 114-105 Building Authority Division space allocation standards for lease space {#sec-22-car-114-105 omnilex-key=us-ar-regs-official--title-22-part-114--22 CAR § 114-105}

22 CAR § 114-105. Building Authority Division space allocation standards for lease space.

(D) Conference, Meeting and Hearing Rooms Area

Based on 20 SF per person

(F) Service Areas Area (1) Janitorial Closet 24 (2) Electrical Closet (minimum clearance as required by building codes) (3’ clearance in front of equipment & 12’ above) (3) Telecommunications Closet (minimum) 32 (4) ADA Unisex Restroom (minimum dimensions) 7’6” x 6’

(5) Mechanical space See below

(G) Circulation

Corridor and circulation space, toilet rooms, stairs, elevators, and separate mechanical space should not exceed 25% of the total building area. Ratio of net leasable area to gross building area should result in a building efficiency of 75% - 85%.

22 CAR pt. 114, Appendix A Building Authority Division Lease Forms 1 and 2 {#sec-22-car-pt.-114-appendix-a omnilex-key=us-ar-regs-official--title-22-part-114--22 CAR pt. 114, Appendix A}

Building Authority Division Lease Forms 1 and 2

Division of Building Authority Lease Term: STATE OF ARKANSAS Annual Rent: $ COUNTY OF PULASKI Square Feet: Standard Lease Form 1 Rate:$ Approved by Attorney General Type: New -: <Month/Date/Year of Effective Date> Worked By: Agency: County: Lease #:

STATE OF ARKANSAS LEASE AGREEMENT

This Lease is made this day of , 20 , by which Lessor leases the PREMISES to Lessee through DBA, Lessee's Leasing Agent.

For the purposes of this Lease Agreement the following definitions apply: "LESSOR" means: <LESSOR’S NAME>, <individual, partnership or corporation> "LESSEE" means: , a department of the State of Arkansas.

"DBA " means the Real Estate Services Section of Arkansas Department of Transformation and Shared Services, Division of Building Authority. By law DBA is the leasing agency for LESSEE. Ark. Code Ann. § 22-2-114. DBA is not an additional LESSEE and therefore shall not owe any rent.

"PREMISES" means the property which is the subject of this Lease which is further described in paragraph #1.

1. DESCRIPTION OF PREMISES:

Approximately 0,000 square feet of located at ; all situated in the City of , County of , Arkansas.

2. TERM:

The initial term will begin on and end on . The LESSEE may elect to extend the term not more than ninety (90) days upon the same terms by written notice to LESSOR, not less than thirty (30) days before the end of the initial term.

3. RENT:

The LESSEE agrees to pay $ per calendar month on or before the tenth (10) day of each such period, upon invoice from the LESSOR. If the Term commences on a day other than the first day of a calendar month, then the installment of the Rent for such month shall be prorated upon a daily basis at the rate of $ per day.

4. UTILITIES AND SERVICES:

The LESSOR will furnish the following utilities and services:

• Electricity - Elevator Service

• Gas - Trash Removal

• Water and Sewer - Janitorial Services and Supplies

• Lam ps, tubes, ballast and replacements

5. MAINTENANCE, REPAIR AND REPLACEMENT:

The LESSOR shall maintain the leased PREMISES, including the building and all equipment, fixtures, and appurtenances furnished by the LESSOR under this Lease, in good repair and tenantable condition, except in case of damages arising from the acts of the LESSEE'S agents or employees. For the purpose of maintaining said PREMISES and property, the LESSOR may at reasonable times, and with the approval of the authorized LESSEE representative in charge, enter and inspect the same and make any necessary repairs hereto. The LESSOR shall be responsible for maintaining all structural supports and exterior walls of the building, including windows, doors, roofs, and passageways from the lobby. LESSOR shall provide reasonable maintenance necessary to keep the street and parking areas leading to the leased property, and the adjacent sidewalks and entrance lobby, in good order and repair, and reasonably free of snow, ice, rubbish and other obstructions. LESSOR shall provide lawn and plant maintenance and shall provide monthly pest control service. LESSOR shall maintain in good working order and repair all plumbing, toilet facilities and other fixtures and equipment installed for the general supply of hot and cold water, heat, air-conditioning (including maintenance and filters).

6. FAILURE TO PERFORM:

The covenant to pay rent and the covenant to provide any service, utility, maintenance, or repair required under this Lease are dependent. If the LESSOR shall breach any of the conditions required to be performed by it under this Lease, LESSEE may cure such breach and deduct the cost thereof from rent subsequently becoming due hereunder. If LESSOR fails to correct a deficiency within thirty (30) days after written notice from DBA and LESSEE, or within an appropriate shorter period stated in the notice, in the event of a deficiency constituting a hazard to the health and safety of the LESSEE'S employees, property, or any other person, DBA and LESSEE may elect to terminate this Lease.

Nothing shall prohibit the LESSEE from extending the time periods stated above if LESSEE determines that it is in its best interest to do so and LESSEE determines that the LESSOR is diligently seeking to cure such failure or breach and the deficiency can be corrected within the extended time period in a manner that will ensure throughout the time period as well as upon completion, the safety of the LESSEE’S employees, property and other persons.

7. DAMAGE BY FIRE OR OTHER CASUALTY:

LESSOR shall bear the risk of loss by fire or other casualty and shall maintain fire and extended coverage insurance to the full replacement value of the PREMISES. If the PREMISES are destroyed by fire or other casualty, this Lease will immediately terminate. In case of partial destruction or damage, so as to render the PREMISES unsuitable for the purposes for which they are leased, as determined by LESSEE and DBA, the LESSEE, may terminate the Lease by giving written notice to the LESSOR through DBA, within fifteen (15) calendar days thereafter; if so terminated, no rent will accrue to the LESSOR after such partial destruction or damage; and if not so terminated, the rent will be reduced proportionately by supplemental agreement hereto effective from the date of such partial destruction or damage.

Nothing shall prohibit the LESSEE from extending the time periods stated above if LESSEE determines that it is in its best interest to do so and determines in addition that the LESSOR is diligently seeking to cure the partial destruction or damage and the partial destruction or damage can be corrected within the extended time period in a manner that will ensure throughout the time period as well as upon completion, the safety of the LESSEE’S employees, property and other persons.

8. ALTERATIONS:

The LESSEE may attach fixtures and install signs in or to the PREMISES with LESSOR'S approval, which shall not be unreasonably withheld. Such fixtures and signs shall remain the property of LESSEE and may be removed from the PREMISES within a reasonable time after the termination of this Lease provided the LESSEE shall restore the PREMISES to a condition as good as at the beginning of this Lease, ordinary wear and tear excepted.

DBA, acting as agent for LESSEE, may, during the course of this Lease, negotiate with LESSOR for other improvements to be made in the PREMISES. No additional cost or fee for services or work will be charged by LESSOR without the prior written authorization of DBA.

9. TERMINATION:

In addition to other remedies provided herein, the LESSEE may terminate this Lease by thirty (30) days written notice to LESSOR by DBA if the LESSEE'S funds are insufficient for it to continue the operations for which the PREMISES are being used.

10. SPECIAL PROVISIONS:

The parties agree that the terms and conditions of this Lease shall be read together and harmonized whenever possible; however, in the event of a conflict between Section 10 or Section 11 and any other provisions elsewhere in this Lease Agreement, the provisions contained in Sections 1-10 (Special Provisions (a) through (e) and Section 11 (Miscellaneous (a) through (e) shall prevail.

(a) LESSOR shall be responsible that this facility conforms to the Arkansas Fire Prevention Code, as amended, Arkansas State Plumbing Code, The National Electrical Code, and any other state and local laws, codes, authorities, etc., applicable to the leased facility including the Arkansas adopted Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities (ADAAG).

(b) Failure to make any disclosure required by Governor’s Executive Order 98-04 or Act 34 of 1999, to the extent applicable, or any violation of any rule or policy adopted pursuant to that Order, shall be a material breach of terms of this contract. Any LESSOR, whether an individual or entity, who fails to make the required disclosure or who violates any rule,

regulation, or policy shall be subject to all legal remedies available to the LESSEE.

(1) The LESSOR shall prior to assigning this Lease with any person or entity, for which the total consideration is greater than $25,000, requires the assignee to complete a Contract and Grant Disclosure and Certification Form. The LESSOR shall ensure that any contract agreement, current or future between the LESSOR and an assignee for which the total consideration is greater than $25,000 shall contain the following:

Failure to make any disclosure required by Governor Executive Order 98-04 or Act 34 of 1999, to the extent applicable, or any violation of any rule or policy adopted pursuant to that Order, shall be a material breach of the term of this Sublease. The party who fails to make the required disclosure or who violates the rule, regulation, or policy shall be subject to all legal remedies available to the LESSEE.

(2) The LESSOR shall transmit to the agency a copy of the Contract and Grant Disclosure and Certification Form completed and signed by the assignee and a statement containing the dollar amount of the Sublease. The LESSOR shall transmit to DBA a copy of the disclosure form within ten (10) days of entering into any agreement with assignee.

(3) The terms and conditions regarding the failure to disclose and conditions which constitutes material breach of contract and rights of termination and remedies under the Executive Order 98-04 or Act 34 of 1999, to the extent applicable, are hereby incorporated within.

(c) The LESSOR hereby acknowledges that <is/was> the LESSOR’S sole agent(s) for these lease negotiations and states that the named broker(s) <is/are> licensed by the State of Arkansas for such transactions.

(d) The State shall not be responsible for the payment of any taxes or assessments for the PREMISES.

(e) Lessor asserts that <he/she/it> <is/is not> the true owner of the PREMISES and the LESSOR’S rights to the PREMISES <are/are not> pursuant to a lease or sublease.

(f) ADD ADDITIONAL SPECIALIZED PROVISIONS HERE

11. MISCELLANEOUS:

(a) The Lease and any modifications or amendments to it will not be valid without the written approval of DBA.

(b) This Lease shall benefit and bind the parties hereto and their heirs, personal representatives, successors and assigns.

(c) The LESSEE may terminate this Lease by written notice from DBA to LESSOR upon the taking by eminent domain of any part of the PREMISES. This provision does not prevent the LESSEE from claiming or recovering from the condemning authority the value of LESSEE'S leasehold interests. (d) Nothing in this Lease shall be construed to waive the sovereign immunity of the STATE OF ARKANSAS or any entities thereof.

(e) This Lease contains the entire agreement of the parties.

Executed by the parties who individually represent that each has the authority to enter into this Lease.

LESSOR LESSEE

By: By:

Date: Date:

DEPARTMENT OF TRANSFORMATION AND SHARED SERVICES, DIVISION OF BUILDING AUTHORITY As Agent for

By: By: , Administrator , Director of Real Estate Services

Date: Date:

Division of Building Authority Lease Term: STATE OF ARKANSAS Annual Rent: $ COUNTY OF PULASKI Square Feet: Standard Lease Form 2 Rate: $ Approved by Attorney General Type: New Month/Date/Year of Effective Date Worked By: County: Agency: Lease #:

STATE OF ARKANSAS LEASE AGREEMENT BETWEEN STATE ENTITIES

This Lease is made this day of , , by which Lessor leases the PREMISES to Lessee.

For the purposes of this Lease Agreement the following definitions apply:

"LESSOR" means: DEPARTMENT OF TRANSFORMATION AND SHARED SERVICES, DIVISION OF BUILDING AUTHORITY, , a department of the State of Arkansas.

"LESSEE" means: , a department of the State of Arkansas.

1. DESCRIPTION OF PREMISES:

Approximately square feet of office space located in the Building at ; all situated in the City of , County of , Arkansas, further described as follows:

2. TERM:

The term of this Lease will begin on and end on , unless the term shall be sooner terminated as hereinafter provided.

3. RENT:

The LESSEE agrees to pay to LESSOR the sum of $ per calendar annum, payable in monthly installments of $ , apportionable on a daily basis at $ . Such amount to be paid to LESSOR at:

, Little Rock, AR 72201.

This Lease will commence on the date which the LESSEE shall have commenced business operations upon the leased PREMISES. If the term of the Lease shall commence on a day other than the first day of the calendar month, the LESSEE shall pay, upon the commencement date of the term, a portion of the fixed annual rental described in the foregoing provision, prorated on a daily basis.

4. UTILITIES AND SERVICES:

It is understood that the rental paid by the LESSEE is for the purposes of reimbursing the LESSOR for providing maintenance and repair of all mechanical and structural systems, janitorial service,

utilities, pest control, security, trash removal, grounds, including applicable parking areas, maintenance, insurance, and all other expenses normally associated with the maintenance and operation of the lease PREMISES. LESSOR may seek additional reimbursements from LESSEE for “after-hour call outs” of DBA Building Operations Personnel due to acts or omissions by LESSEE’S employees, representatives, or invitees.

5. ALTERATIONS:

The LESSEE may attach fixtures and install signs in or to the PREMISES with LESSOR'S approval, which shall not be unreasonably withheld. Such fixtures and signs shall remain the property of LESSEE and may be removed from the PREMISES within a reasonable time after the termination of this Lease provided the LESSEE shall restore the PREMISES to a condition as good as at the beginning of this Lease, ordinary wear and tear excepted. Any subsequent requested space alterations, attaching fixtures, and erecting additions after the initial construction has been completed and accepted by the LESSEE shall be the responsibility of the LESSEE. No services or work will be performed for which an additional cost or fee will be charged by LESSOR without the prior written authorization of the LESSEE.

6. ADDITIONAL PROVISIONS:

LESSOR and LESSEE mutually agree that the following additional provisions are hereby added to become a part of this Lease Agreement:

(a) LESSOR shall bear the risk of loss by fire or other casualty and shall maintain fire and extended coverage insurance to the full replacement value of the PREMISES. If the PREMISES are destroyed by fire or other casualty, this Lease will immediately terminate. In case of partial destruction or damage, so as to render the PREMISES unsuitable for the purposes for which they are leased, as determined by LESSOR, the LESSOR, may terminate the Lease by giving written notice to the LESSEE, within fifteen (15) calendar days thereafter; if so terminated, no rent will accrue to the LESSOR after such partial destruction or damage; and if not so terminated, the rent will be reduced proportionately by supplemental agreement hereto effective from the date of such partial destruction or damage.

(b) LESSEE agrees to accept the lease PREMISES in "as is" condition. All modifications will be at the expense of the LESSEE. <OR if alterations are made that are specific to the Lessee’s operations conditional language can be added to state: (1) Alterations shall remain the property of the LESSEE. (2) Alterations shall be removed by LESSEE within thirty (30) days upon Lease termination or expiration, unless alterations are accepted in writing by DBA. (3) LESSEE shall restore the PREMISES in a condition as good as at the beginning of the Lease term; ordinary wear and tear excepted.

(c) This Lease shall benefit and bind the parties hereto and their heirs, personal representatives, successors, and assigns.

(d) Nothing in this Lease shall be construed to waive the sovereign immunity of the STATE OF ARKANSAS or any entities thereof.

(e) In all instances in which a LESSEE employs an individual or individuals who require an emergency evacuation auxiliary aid to safely exit the PREMISES during an emergency situation, the LESSEE is required to, and is solely responsible for obtaining, maintaining, and training in the use of said auxiliary aid. Any necessary installation of said device shall be coordinated and approved by the LESSOR. This requirement shall apply in all instances regardless of whether the individual(s) with disabilities are employed at the time of the execution of this Lease, are hired and employed after execution of this Lease, or a current employee regardless of hire date becomes disabled so as to require an emergency evacuation auxiliary aid.

(f) LESSEE shall not sublease nor assign this Lease without the written approval of the LESSOR.

(g) This Lease contains the entire agreement of the parties.

7. BUILDING RULES:

The LESSEE agrees to cooperate with LESSOR in enforcing the Building Rules attached hereto and incorporated herein by reference as Exhibit "A". In the case that LESSEE is notified by LESSOR of Building Rule infractions committed by LESSEE’S employees or invitees, LESSEE agrees to take prompt and appropriate action to correct such violations.

8. RELOCATION

Nothing in this Lease shall be construed to prohibit or lessen LESSOR’S authority to relocate LESSEE, therefore when requested by LESSOR, LESSEE agrees to execute and enter into a lease or an amended lease with LESSOR or other public entity for the leasing of space in any public buildings as deemed by the LESSOR to be in the best interests of the State.

Executed by the parties who individually represent that each has the authority to enter into this Lease:

LESSOR: LESSEE:

DEPARTMENT OF TRANSFORMATION AND SHARED SERVICES, DIVISION OF BUILDING AUTHORITY

By:

, Title, Real Estate Services Section

Date:

By:

Date:

By: , Director

Date: