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  • Agency:
    In accordance with Minnesota Statute 16B.01, Subd.2., an agency means “Any state office, employee, board, commission, authority, department or other agency of the executive branch of state government…”
  • Amendment:
    a contract document, signed by lessor and lessee, and attached to a lease, that describes agreed-upon changes to the lease in said items such as rent, length of occupancy, or other rights and obligations of the parties.
  • As is:
    The existing condition of real estate, prior to any improvements contemplated under a lease.
  • Buildout:
    Refers to the interior construction of a lessee’s space whether new construction or the remodeling of the existing space.  Also referred to as “Leasehold Improvements”.
  • Demising wall:
    The wall, which separates a lessee’s space from another lessee’s space, or building common areas.
  • Gross lease:
    Commonly specifies one rental amount including all operating expenses, e.g., rent, taxes, insurance, utilities, maintenance, etc. associated with the rental of a property.  State leases are gross leases.
  • HVAC:
    Acronym for heating, ventilation and air conditioning.
  • Landlord:
    See “Lessor”.

  • Lease agreement:
    The contract between lessor and lessee where lessor grants the use of the Leased Premises to lessee under certain conditions, including the condition of a limited period of occupancy, which are defined in the contract.
  • Lease commencement date:
    The date upon which the lease commences and the obligations of the parties begin (see also “rent commencement date”  Rent payment date may differ from lease commencement and occupancy date).
  • Lease term:
    The duration of time from the lease commencement date through the expiration or early termination date.
  • Leased premises:
    In commercial real estate, the description of the leasehold and the specific square footage for which the parties enter into a lease; the space that is leased.
  • Leasehold Improvements:
    Improvements made to the leased premises for the lessee.  Improvements permanently attach to the premises unless they are trade fixtures, and they remain with the premises after the end of term of the lease.
  • Legal description:
    A description of the exact location of a piece of real estate, usually including reference to government records kept for this purpose, such as abstract or Torrens records.  Legal descriptions are used to describe the lessor’s property, of which the leased premises may be one part.
  • Lessee:
    The user of the space, often referred to as the “tenant”.  The State of Minnesota, Department of Administration, is the lessee, acting for the benefit of a state agency.
  • Lessor:
    The owner of the space, or the owner’s representative.  The State is the lessor, renting out State-owned space to outside parties through the use of Income leases.
  • Partition wall:
    A wall constructed to create work areas such as offices or conference rooms within the space, as is distinct from the demising walls that encircle the space.
  • Punch list:
    A list of incomplete remodeling items or construction items which are unacceptable to the lessee, which upon remedy and completion will usually complete the obligations of the contractor under a construction contract. It is the lessor’s responsibility to satisfy the lessee’s concerns and motivate the contractor to correct all the items on the punch list.
  • Remodeling Request Memo:
    a procedure through which lessee may contract directly with the lessor for limited construction or remodeling work, without having Real Estate and Construction Services amend the lease agreement.
  • Real estate broker:
    A person licensed to act as an agent for another person or business to negotiate a lease or purchase of a leasehold or property, respectively, for a fee.
  • Renewal option:
    Lease language allowing lessee to give lessor notice of intent to extend the lease beyond its original term, and the process and terms under which the lease may be extended.  Renewal options are not included in every lease agreement.
  • Rent commencement date:
    The date upon which the rent begins.  Can be different from the lease commencement date and occupancy date.
  • Sublease/sublessor/sublessee:
    A sublease is created when a lessee contracts for a third party to use some or all of the leased premises, with the lessor’s approval.  The relationship between the lessor (property owner) and lessee (property user) remain unchanged. The Lessee assumes the dual roles of lessee and sublessor to the third party.  The third party becomes the sublessee, the tenant that is subordinate to, or under, and the lessee.
  • Substantial completion:
    The point during construction at which the contractor is ready to turn the property over to the lessee or client for acceptance and final punch list. Usually occurs upon the issuance of a certificate of occupancy.
  • Tenant:
    See “Lessee”.
  • Usable square feet:
    Usable square feet is computed by measuring the inside finished surface of exterior walls to the inside finished surface of building corridor and other permanent walls or to the center of walls separating the Leased Premises from other tenant space.  If more than 50% of an exterior wall is glass, the dimension is taken from the glass line.  Vertical shafts, elevators, stairwells, dock areas, mechanical rooms, and utility and janitor rooms are excluded. Restrooms, corridors, lobbies and receiving areas, which are accessible to the general public or used in common with other tenants are also excluded.  No deductions are made for columns, pilasters or other projections to the building if each is less than four (4) square feet.