Process & Procedure
What is a holdover?
When a lease contract has expired and new space is not yet available, or the tenant agency has not yet renegotiated a new lease, it will go into a holdover status.
Overview
Most leases contain a holdover clause. These clauses can specify the use of the same terms and conditions as set forth in the lease or it may include a percentage increase in base rent (added as an incentive for the landlord to renegotiate the lease faster). This process includes extending the term of the lease with new expiration dates and new funding to cover that period.
OGS Division of Leasing Services
When a lease expires, OGS Leasing Services can issue a holdover. OGS Leasing Services issues a letter to the agency and us with a notification that the lease will be going into holdover status for the initial term only.* OGS Leasing Services will update the new lease terms in the real estate module with an end date of 12/31/2099, indicating that this lease is in holdover status.
Business Services Center
Based on the holdover letter, we will create a dollars and sense form and work with the agency to obtain a lease-purchase requisition form to include the new end date of the lease contract, as well as additional funding if required, and will request the appropriate agency coding (chartfields).
Agency
The agency will finalize the lease-purchase request form by providing the code and verifying dollar amounts estimated and will then request a B-1184 from the Division of the Budget, if required. The agency will send the lease purchase requisition form, B-1184 and all additional required paperwork to us.
Business Services Center
Based on information from the holdover letter as well as the lease purchase request form, we will create and execute a Single Transaction Summary (STS). The BSC is responsible for sending all holdover paperwork to OSC and notifying the agency and OGS Leasing Services when the paperwork has been sent.
Office of the State Comptroller
The Office of the State Comptroller (OSC) will review all information provided by the BSC and either approve or deny the transaction based on their findings. If OSC has any questions pertaining to the STS and backup documentation submitted, they will contact the BSC directly.
Business Services Center
OSC will send a letter back to us indicating the transaction has been approved. The BSC will stage a purchase order and inform the agency and accounts payable once the purchase order has been dispatched. This will continue automated payments for all fixed monthly costs indicated in the lease contract.
*A holdover letter is generally for an indefinite period of time until the lease ends or when the parties negotiate a new agreement. OSC will allow for a holdover term extension on the SFS contract based on the original lease agreement, typically six months to one year at a time. The agency and we will continually review SFS contract expirations. After the initial holdover, the original letter provided from OGS Leasing Services fills in for any required extensions.