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 That Advisory superseded Leasing Policy (adopted as DGS Agenda Item 28-L [Feb. 24, 1982]).
- 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.
- Delegation: The Board of Public Works delegates to SHA the authority to enter into and execute individual leases that are conducted as follows:
- Lease Term. SHA may lease properties on a 30-day renewable basis if the duration of the tenancy does not exceed one year.
- 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.
- 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.
- Competitive Bidding. SHA may, in writing, solicit competitive bids, to be submitted in writing, for lease of properties if:
- Lack of comparable rental rates prevents SHA from determining market-value rent;
- No qualified prospective tenant agrees to pay the SHA-determined rent; or
- The method described in Section B. does not produce qualified prospective tenants for the property.
- Landlocked parcel. Without going through the competitive bid process, SHA may lease landlocked parcels to an adjoining landowner/tenant for the:
- Per-acre price (or higher) as established by the competitive high bid process for similar SHA properties in the general area; or
- County average price per-acre (or higher) as compiled by the Maryland Department of Agriculture.
- 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.
- 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.
- 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.
- 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
Toll Free: 888.204.4245