​BPW Advisory 2006-3 SHA-Managed Property Leases

Purpose: To delegate certain leases of, and clarify procedures for the leasing of, State-owned real property located along State highways and other State Highway Administration managed-properties.

Authority: Any real property of the State may be leased for a consideration the Board of Public Works decides is adequate.  Section 10-305, State Finance and Procurement Article, Annotated Code of Maryland. 
Previous Directive:  This Advisory is companion to BPW Advisory 2006-2 (adopted October 4, 2006) which pertains to Department of Natural Resources-managed properties. That Advisory superseded Leasing Policy (adopted as DGS Agenda Item 28-L [Feb. 24, 1982]).
  1. SHA Leasing:  SHA will conduct and supervise the leasing of State real property located along State highways and other SHA-managed real property. In this Advisory, "properties" and "lease" refer to the terms as defined in this paragraph.
  2. Delegation: The Board of Public Works delegates to SHA the authority to enter into and execute individual leases that are conducted as follows:
    1. Lease Term. SHA may lease properties on a 30-day renewable basis if the duration of the tenancy does not exceed one year.
    2. Leases to Qualified Tenants. SHA shall offer available properties at market-value rent to qualified prospective tenants selected through an application process. SHA shall give public notice of leasing opportunities through a classified advertisement in a local newspaper.
    3. Market-Value Rent.  SHA may lease properties at market-value rent as determined by SHA.  SHA will determine market-value rent by using comparable rents from a recognized real estate listing service and other information including the property's age, condition, and amenities. For existing tenancies, SHA may increase rents no more than once during a twelve- month period.
    4. Competitive Bidding. SHA may, in writing, solicit competitive bids, to be submitted in writing, for lease of properties if:
      1. Lack of comparable rental rates prevents SHA from determining market-value rent;
      2. No qualified prospective tenant agrees to pay the SHA-determined rent; or
      3. The method described in Section B. does not produce qualified prospective tenants for the property.
    5. Landlocked parcel. Without going through the competitive bid process, SHA may lease landlocked parcels to an adjoining landowner/tenant for the:
      1. Per-acre price (or higher) as established by the competitive high bid process for similar SHA properties in the general area; or
      2. County average price per-acre (or higher) as compiled by the Maryland Department of Agriculture.
  3. Reporting of Delegated Leases:  Twice a year – by March 1 and September 1, SHA shall submit to the Board of Public Works Executive Secretary a report of all existing delegated leases.
  4. Non-Delegated Leases:  SHA must submit to the Board of Public Works for approval on the Department of Transportation Action Agenda any lease that is not specifically delegated in Section II.
  5. Subleasing Only with Board Approval: All leases must prohibit the tenant from assigning or subleasing the property without prior approval from the Board of Public Works.
  6. Tenants in State Service: If a tenant is a State employee, agent, servant, or any individual in State service and the purpose of the proposed lease is to permit the tenant to maintain a residence, the lease must be approved by the Secretary of General Services.

Questions concerning this Advisory may be addressed to

State Highway Administration
Olu A. Okunola, Director Office of Real Estate
707 North Calvert Street
Baltimore, Maryland  21201
Fax: 410.209.5024
Toll Free:  888.204.4245

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