Process & Procedure
An assignment of a lease is a formal agreement whereby an individual or entity (the “Assignor”) assigns the rights and responsibilities for performance under the lease and payment to another individual or entity (the “Assignee”) who must accept those rights and responsibilities as outlined in the lease. The assignment agreement must be signed and acknowledged by both the Assignor and the Assignee and approved by the agency granting the lease. If the original lease was subject to OSC approval, the assignment agreement requires approval by the Attorney General and Comptroller's Bureau of Contracts.
Many assignments are due to a structural change on the part of the Assignor (a partnership was incorporated or a firm was purchased by another firm). Other times, assignments are made to independently owned firms who take responsibility for executing the lease terms.
Overview
When OGS Division of Real Estate becomes aware of an assignment, it will issue a letter to the occupying agency and the Business Services Center (BSC) indicating an assignment is in process. In order to finalize the assignment, a Consent to Assignment (CTA) document needs to be executed by all parties involved (Assignor, Assignee, OGS Leasing Services, the Attorney General (AG), and the Office of the State Comptroller (OSC)).
With a lease assignment there will be an Old Lease and a New Lease and the New Lease number will be the same as the Old Lease number with the removal of a zero and after the “L” and addition of an “A” at the end of it (e.g. old lease was L001234, the new lease is L01234A).
The State will honor rent payments to the Assignor until the final CTA notification (STS Request) is received by both the BSC and the occupying agency.
Business Services Center
Based on receipt of the STS Request from OGS Leasing Services, the BSC will work with the occupying agency on two simultaneous processes:
Process A for Assignor:
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Ensure that all invoices received by the State are being processed under the Old Lease through the Effective Date of the Assignment.
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Remove any funding from all open Purchase Orders (PO) and/or contract lines that will not be needed to pay pending invoices due pursuant to the Old Lease prior to the Effective Date of the Assignment. Funds needed to pay pending invoices will be left on the current PO.
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Create a negative STS to remove the remaining balance from the Old Lease.
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Amend the end date of the Old Lease to that reflected on the STS Request from OGS RES.
NOTE: If invoices are received from the Assignor after the Effective Date of the Assignment, the invoices must be paid through the Old Lease.
Process B for Assignee:
NOTE: The New Lease will go up for the exact amount the Old Lease went down for. If additional funding is needed for the New Lease, this transaction will need to be processed separately.
Business Services Center
We will send both generated STS documents directly to OGS Leasing Services via e-mail, copying the occupying agency and any other contacts listed in the original e-mail request.
OGS Division of Leasing Services
OGS Leasing Services sends the original documents to be approved by the AG, as to form, and OSC.
Attorney General
AG approves as to form, electronically via e-mail.
Office of the State Comptroller
OSC approves the lease assignment, keeps one copy for its records and returns the other two signed originals back to OGS Leasing Services.
Business Services Center
When the BSC receives a copy of the approved assignment from OGS Leasing Services, it will stage the PO. Once dispatched, it will notify the occupying agency and accounts payable. It will then link the fixed costs in the real estate module. As soon as payments are up to date, it will notify OGS Leasing Services and the new lease will be made active.