TN 31 (11-96)
DI 39527.015 Privately Owned Space
1. Comparable space
Rental charges to SSA must not exceed the rental rate of comparable privately owned space in the same or similar localities.
The rental rate:
Need not be a fixed rate in any particular locality;
May vary within, as well as between, localities; and
Must consider inflationary trends in utility and tax costs.
2. Cancellation or conditional clause
A cancellation or conditional clause must be in the rental agreement
unless the RO has approved a lease without a cancellation clause.
a. Cost allocation plan
If the lease is controlled by a central State organization, the cost is included in the State-wide cost allocation plan.
b. Direct bill
Costs not included in the State-wide cost allocation plan may be directly billed to the disability program.
1. Comparable rental rate
Determine the rental rate of comparable privately owned space.
Consider only rates that are based on like elements of cost.
EXAMPLE: Rental charges which include service and maintenance charges must not be compared with rates that do not include such expenses.
Consider inflationary trends in utility and tax costs.
Provide the RO with the basis and documentation for establishing the rental rate.
Retain a copy of (a.) above on file in the DDS.
4. Cancellation clause
In executing or renewing leases, the DDS must:
Include a reasonable right of cancellation (less than 90 days), if possible; and
Secure a cancellation clause in all leases exceeding 1 year; or
If unsuccessful in securing a cancellation clause,secure a lease not to exceed 1 year, with an annual renewal option for an extended period such as 3 to 5 years.
If (b.) or (c.) is not possible, consult the RO at least 30 days in advance of the date proposed for the signing of the lease.