Printed on: 04/26/2024. Please go to policy.umn.edu for the most current version of the document.
University of Minnesota  Administrative Policy

Use and Lease of Real Estate

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Policy Statement

University Real Estate is owned by Regents of the University of Minnesota, a Minnesota constitutional corporation, not by the College or University Unit that occupies or otherwise uses the Real Estate. Real Estate owned and leased must be used for purposes that contribute to the University’s mission of research and discovery, teaching and learning, and outreach and public service, unless a written agreement provides for another approved use of the Real Estate.

Pursuant to the Board of Regents Policy: Reservation and Delegation of Authority (PDF), the Board of Regents reserves to itself authority to approve the use and lease of real property, if the initial term amount to be paid by or to the University exceeds $1,000,000.    

The University requires a written agreement for the use of all Real Estate regardless of the duration of use or amount of rent paid, except if approved otherwise by the Real Estate Office or expressly permitted in this policy and associated procedures. No University Unit or individual can enter into a Use or Lease Agreement without the approval of the Real Estate Office.

The Real Estate Office is responsible for University Real Estate use and lease transactions, including the process for review and approval of proposed transactions as well as determining the appropriate fee to be charged or incurred. The Office of the General Counsel supports the use-and-lease-of-real-estate process through the development or approval of Use and Lease Agreements.

An exception to this policy and associated procedures may be granted by the Senior Vice President for Finance and Operations or their designee, provided the exception remains consistent with Board of Regents policy. Any exceptions granted will be documented in writing.

Reason for Policy

 

To implement Board of Regents Policy: Real Estate and Facilities (PDF) by providing a framework to ensure that Real Estate owned, used, or leased by the University is used to provide facilities for faculty, staff, and students in support of the University's mission. This policy ensures that (i) all appropriate due diligence is made regarding using and leasing Real Estate prior to entering into agreements, and (ii) Use and Lease agreements minimize financial and reputational risk, clarify legal responsibility,  and enhance accountability and transparency.

 

Contacts

SubjectContactPhoneEmail
Primary Contact(s)Leslie Krueger612-624-5899[email protected]
Real Estate Lease and Use AgreementsDirector of Leasing and Property Management612-625-5345[email protected]
General QuestionsReal Estate Office612-625-5345[email protected]
Responsible Individuals
Responsible Officer Policy Owner Primary Contact
  • Vice President for University Services
  • Assistant Vice President Planning, Space, and Real Estate
  • Leslie Krueger
    Assistant Vice President Planning, Space, and Real Estate

Definitions

College or University Unit

Any campus, college, department or program of the University covered by the University's liability insurance. This includes Campus Life student organizations.

Lease

A contract which provides for Real Estate owned by one party to be used and controlled on an on-going basis by another party during the term of the contract. Lease contracts typically provide for the exclusive use and possession of Real Estate for a defined term in exchange for a periodic payment of rent.

Non-University Entity

A group or individual not a part of the University, as well as University employees using University Real Estate for personal use and student organizations not covered by the University's liability insurance.

Real Estate

Land (surface or subsurface), buildings (including space within a building), air rights, water rights, and mineral rights.

Real Estate Office

The unit within the Planning, Space, and Real Estate (PSRE) Department responsible for the transaction process of leasing and using Real Estate.

Short Term Use Agreement

A Use Agreement that does not exceed 50 days of use within the term.

Use Agreement

Typically, a license agreement grants a conditional, revocable right to use another’s Real Estate. Use Agreements are typically Short Term Use Agreements for uses such as conferences and events with a one-time payment. Use Agreements can also be used for longer terms or if there are periodic payments. Use Agreements may include but are not limited to facility Use Agreements, permits, housing agreements, food truck agreements, temporary construction agreements, occupancy agreements, access agreements, and utility license agreements. 

Approval Authority

Certain contracts must be reviewed or approved by a responsible University unit. Approval Authority is a certain delegation that has been granted to Subject Matter Experts in accordance with the Administrative Policy: Entering into Contracts, including that policy’s procedure and the appendix Required Review by Subject Matter Experts, to ensure the terms of the contract are acceptable from a legal, financial and risk perspective. If a contract involves Non-University Entity using or leasing University Real Estate, or the University using or leasing Real Estate owned by Non-University Entity, the Real Estate Office must approve it, unless such approval authority has already been granted as specified in the Procedures that accompany this policy.

Signature Authority

Signature Authority means the power to sign a contract which is an action that binds the University. Only individuals with specific signature authority delegated in accordance with Administrative Policy: President’s Delegations of Authority may sign a contract. The Office of Institutional Compliance manages the University’s Delegations of Authority Program which reflects the delegations to individuals within the University that have the authority to sign contracts that bind the University to a legally enforceable obligation. Additional approvals may be required, depending on the nature of the transaction, legal requirements, dollar level, etc. It is recommended that individuals with signature authority discuss additional approval requirements with their supervisor and familiarize themselves with Administrative Policy: Entering into Contracts.

Responsibilities

Board of Regents

Has the exclusive authority and power on behalf of the University to approve Real Estate Use and Lease Agreements if the present value amount to be paid by or to the University during the initial term exceeds $1,000,000.

President

Has delegated authority to the Senior Vice Presidents, Vice Presidents and Chancellors, who have redelegated all or some of their authority to others, to execute Leases of non-University Real Estate by their unit and Use Agreements with a present value not exceeding $1,000,000, subject to Approval Authority, Funding Approval, and Legal Approval. Refer to the Delegations Library for more details.

Senior Vice President for Finance and Operations

As delegated by the President, has signature authority for Real Estate agreements. The Senior Vice President for Finance and Operations has re-delegated this authority to the Vice President of University Services and Assistant Vice President for Planning, Space, and Real Estate. The Senior Vice President for Finance and Operations has authority to grant exceptions to this administrative policy and associated procedures.

Real Estate Office

The Real Estate Office is responsible for University Real Estate use and Lease transactions, including the process for review and approval of proposed transactions as well as determining the appropriate fee to be charged or incurred.

Has responsibility and Approval Authority for all Use Agreement transactions over $50,000 or that exceed a term of 50 days and all Lease Agreement transactions regardless of the term or value. The Real Estate Office administers all Leases and maintains databases of the University's Real Estate Leases and Use Agreements as well as its owned Real Estate.

Office of the General Counsel

Develops or approves all University Real Estate contracts. 

College or University Unit

Uses University owned and leased Real Estate for mission-related purposes and oversees Use and Lease agreements providing for use of building space or other Real Estate assigned to them by non-University entities. Approval Authority for Use Agreements not exceeding $50,000 or a term of 50 days has been delegated to the Signature Authority. This does NOT include Leases.

Disability Resource Center (DRC)

Serves as a resource to the Real Estate Office, Office of General Counsel, Colleges or University Units to advance equitable access in the development of Use Agreements and Leases.

Non-University Entity

Uses University owned Real Estate in accordance with the terms of the contracted agreement, including providing evidence of required insurance coverage.

Tax Management Office

Serves as a resource to the Real Estate Office to ensure the University is in compliance regarding private business use.

Related Information

History

Amended:

July 2023 - Comprehensive review. Key changes with significant policy implications include: 1) Clarifies Approval Authority vs Signature Authority 2) Redefines length of Short-Term Use Agreement: not to exceed 50 days 3) Changes RRC maximum threshold for Approval Authority for Use Agreements from $10,000 to $50,000 4) Clarifies process steps for using and leasing Non-University Space 5) Requires units to engage Capital Project Management (CPM) as owner’s representative for leasehold improvements, unless otherwise approved 6) Clarifies process steps for using and leasing University Space by Non-University Tenants.

Added language to the Responsibilities section of the Policy to highlight the Disability Resource Center's role in supporting the Real Estate Office, Office of General Counsel, and College and University Units to advance equitable access in the development of Use Agreements and Leases.

Amended:

August 2018 - $1,250,000 lease threshold decreased to $1,000,000 to align with Board of Regents Policy: Property and Facility Use.

Amended:

April 2012 - $250,000 lease threshold increased to $1,250,000 to align with Board of Regents Policy: Property and Facility Use. Added language to specify certain uses by registered students organizations which do not require a written agreement.

Effective:

March 2011 - Aligns policy with current practice; Combines two existing real estate policies into one, with separate procedures; Provides greater accountability and transparency as to how space is leased; Clearly specifies who has the authority to enter into a lease or sales agreement, which in turn, reduces the University's risk of accepting an unreasonable lease.

Supercedes:

Using and Leasing University Real Estate, Using and Leasing Non-University Real Estate.