Utah Admin. Code R850-30-400 - Lease Rates
1. The agency shall
base lease rates on the market value or income producing capability of the
subject property and may require any commercially reasonable type of
consideration, including rent, percentage rent, use payments, impact charges,
escalating charges, balloon payments, and in-lieu payments. The agency may base
lease rates on any of the following criteria, in combination or otherwise:
(a) the market value of the subject property
multiplied by the current agency-determined interest rate;
(b) comparable lease data;
(c) market value of the proposed use of the
subject property;
(d) rates
schedules approved by the director;
(e) the administrative costs of leasing the
subject property and a desired minimum rate of return; and
(f) a fixed rate per acre or a crop-share
formula for agricultural leases providing that the lease rate is customary and
reasonable.
2. The
agency may base lease rates on a value other than the market value of the
subject property if the director determines it is in the best interest of the
beneficiaries and the agency has the right to terminate the lease before the
end of the term.
3. Lease Review
and Adjustment Procedures.
(a) The agency
shall review special use leases periodically as specified in the lease
agreement and may adjust lease rates, the amount of financial guaranty, the
amount of required insurance, and other similar lease provisions to ensure the
agency receives no less than fair market value for the subject property and is
adequately protected against a lessee's breach. Periodic lease reviews should
normally be no longer than every five years.
(b) The agency may base lease rate
adjustments on changes in market value including appreciation of the subject
property, changes in established indices, or other methods that are appropriate
and in the best interest of the trust beneficiaries.
(c) If the lease does not specify the rate of
adjustment, the rate of adjustment will be based on the Consumer Price Index,
published by the U.S. Bureau of Labor Statistics, All Urban Consumers, Western
Region Average, All Items (1982-84 = 100), or if the Consumer Price Index is no
longer published, a substitute index published by a governmental agency and
comparable to the Consumer Price Index. The adjusted lease rate cannot be less
than the lease rate for the immediately preceding review period.
(d) The director may suspend, defer, or waive
lease adjustments in specific instances, based on a written finding that the
suspension, deferral, or waiver is in the best interest of the trust
beneficiaries.
Notes
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