Leasing

An expense lease allows UVA departments to obtain and rent space off-Grounds when appropriate facilities are not available within the University. These agreements are coordinated through Real Estate and Leasing Services to ensure compliance with University and state requirements. Lease costs are charged to the department’s budget as operating expenses. Expense leases provide departments with flexibility, access to specialized facilities, and the ability to locate programs in spaces that best support their mission and community partnerships.

The leasing process is outlined here:

1. Initiate Your Space Request

   First, your department must assess whether the needed space can be accommodated within its existing resources. This includes discussing with your department chair, head, associate dean, or Space Management.

   If internal options are exhausted, submit a University Space Request Form via NetBadge or the Space@UVA portal. Your request must also be approved by your dean or a senior administrator.

2. Evaluation by Space Working Group (SWG)

   The Space Working Group (SWG) reviews your submission and identifies how the need might be met. If on-Grounds accommodation isn’t feasible, SWG will refer your request to UVA’s Real Estate and Leasing Services (REaLS).

3. Engage Real Estate and Leasing Services (REALS)

   Once referred, REaLS takes the lead:

   1. We conduct a market survey or procurement process to identify potential off-Grounds spaces.
   2. We negotiate with property owners, usually at least two, to find the best fit.
   3. We plan build-outs, price tenant improvements, handle lease negotiations, and manage approvals with Counsel, Risk Management, Comptroller, and others as needed.

4. Timeline

   The process often takes 9 to 12 months, especially when tenant improvements are needed. So, planning well in advance is critical.

5. Policy Framework

   According to UVA policy PRM-012:

   1. All off-Grounds leases (new leases, renewals, or extensions) must go through Space Management and REaLS.
   2. REaLS ensures compliance with the Code of Virginia.
   3. Approvals are mandatory before any lease actions can proceed.

An income lease refers to an arrangement in which the University leases its property to external parties when additional space is available and not needed by a UVA occupant, generating revenue for the institution. While it is not common practice for UVA to lease space to third parties, occasional exceptions are made, such as subleases or leases for antennas. These agreements are managed through Real Estate and Leasing Services to ensure compliance with University policies and state regulations. Income from these leases is recorded as revenue for the University, supporting its operations and mission. 

On occasion, there may be a need to change the terms and conditions of a lease during the lease period. Lease Amendments must be approved by the Associate Vice President for Finance and University Controller and Office of the Attorney General; primarily, the Amendment process is very similar to the approval of a new lease. 

• REaLS discusses changes with the department leasing space (Tenant) and Landlord.  Usually, the Lease Amendment can affect a new lease cost and proof of funding source will be required.
• REaLS coordinates with the Landlord to prepare a draft Lease Amendment. The Office of the Attorney General (OAG) reviews the draft for legal sufficiency, while Risk Management and Finance review it within their respective areas of oversight.
• Upon OAG review and acceptance, the Lease Amendment is forwarded to the Landlord for signature.
• The Lease Amendment is forwarded to OAG for final review and signature approval.
• The approved Lease Amendment is returned to REaLS to route for signature and distribution to the appropriate parties.

Annual rent reconciliation is a part of the tenant's responsibilities. It is the process of comparing the rent payments a tenant has made with what is actually owed under the lease. It ensures both the landlord and tenant are aligned on the financial terms and no overpayment or underpayment has occurred. It often includes reviewing base rent, additional rent, and pass-through expenses like:

• Common Area Maintenance (CAM)
• Property taxes
• Insurance
• Utilities (if separately billed)

REaLS is committed to ensuring that these reconciliations are accurate and reliable. Our role is to promote transparency, prevent disputes, and support the parties in effective and accurate budgeting.

Tenants should follow the property manager's maintenance issue reporting process. REaLS also recommends that all tenants keep an internal maintenance log. A maintenance log is a record of all repairs, inspections, and routine upkeep for buildings, equipment, or systems. It tracks what work was done, when, and by whom, helping departments stay organized and compliant with safety and regulatory requirements. Keeping a maintenance log also supports planning for future repairs, protects University assets, and ensures accountability by providing a clear history of maintenance activities.

If the issue remains unaddressed or is not to the tenant's satisfaction, please contact our office for assistance to resolve the matter.

DRES Occupant Handbook