{"data":{"id":"us-ky/krs-56.806","jurisdiction":"us-ky","citation":"KRS 56.806","heading":"Terms of lease -- Calculation of rent -- Option to purchase -- Lease-","body":"purchase agreement -- Right to cancel lease.\n(1) Except when another lease term is approved by the secretary of the Finance and\nAdministration Cabinet, the terms of all leases entered into pursuant to KRS 56.803\nor 56.805 may provide for an initial lease term beginning on a date stated and\nending on June 30 in each year in which the General Assembly has convened in an\neven-numbered-year regular session and appropriated funds f or the operation of the\nstate government during the next ensuing biennium. The leases may grant the state\nsuccessive options for the automatic renewal of the lease upon the same terms and\nconditions for additional renewal periods of twenty -four (24) months  each, not to\nexceed three (3) automatic renewal periods. Any lease containing provision for the\nautomatic renewal of the lease after the expiration of the initial lease term shall also\nprovide that the state may, upon written notice given to the lessor on or before April\n15 of the year in which the initial or any automatic renewal term expires, elect not\nto exercise its option for the automatic renewal of the lease term. Subject to the\nagreement of the lessor, a lease in which the final automatic renewal p eriod has\nexpired, or will expire as of the end of the then current term, may be renewed upon\nthe same terms and conditions, provisions of KRS 56.803 to the contrary\nnotwithstanding.\n(2) The Department for Facilities Management shall comply with the provis ions of this\nsubsection when calculating rentable area for the purposes of a lease.\n(a) If the Commonwealth is the only tenant on a single floor of a multistory\nbuilding, the rentable area shall be the entire area described by measuring to\nthe inside finis hed surface of the dominant portion of the permanent outer\nbuilding walls, excluding any major vertical penetrations of the floor which\nshall include but not be limited to stairways, elevator shafts, pipe chases,\nvertical air ducts, and the enclosing wall of all such excluded areas.\nRestrooms, corridors, and utility rooms which exclusively serve the floor\noccupied by the Commonwealth shall be included as part of the rentable area.\n(b) If the Commonwealth is the only tenant in a one (1) story or multistory\nbuilding, rentable area shall be calculated pursuant to paragraph (a) of this\nsubsection except that those areas excluded pursuant to paragraph (a) of this\nsubsection shall be included as part of the rentable area.\n(c) If the Commonwealth shares a floor wit h one (1) or more other tenants, the\nrentable area shall be calculated by measuring from the inside finished surface\nof the dominant portion of the permanent outer building walls to the office\nside of every corridor wall or other wall separating the Common wealth's\nleased space from other adjacent rentable areas which shall include, but not be\nlimited to, space under the control of another tenant, public corridors,\nrestrooms, all common service and utility areas, stairways, elevator shafts,\nvertical pipe chases, and air ducts.\n(d) The Commonwealth's rentable area determined pursuant to paragraphs (a),\n(b), and (c) of this subsection shall include columns and projections necessary\nto the building.\n(3) The Finance and Administration Cabinet may include in a lea se an option to\npurchase the leased property or a lease-purchase of the leased property.\n(4) If the Finance and Administration Cabinet exercises an option to purchase leased\nproperty, the option price shall not exceed the fair market value of the leased\nproperty as of the time the lessor and the Commonwealth enter into the option. Two\n(2) competent and qualified real property appraisers shall each determine the fair\nmarket value. Each real property appraiser shall be selected by the Finance and\nAdministration Cabinet and shall employ an accepted appraisal technique.\n(5) (a) Except as provided in paragraph (b) of this subsection, if the Finance and\nAdministration Cabinet includes in a lease the lease -purchase of the leased\nproperty, two (2) competent and qual ified real property appraisers shall each\ndetermine the fair market value of the leased property as of the time the lessor\nand the Commonwealth enter into the lease. Each appraiser shall be selected\nby the Finance and Administration Cabinet and shall emplo y an accepted\nappraisal technique. The lease shall provide for an initial lease term ending\nJune 30 of the second year of the then current fiscal biennium of the\nCommonwealth, with the option of the Commonwealth, as lessee, to extend\nthe term of the lease for a term of two (2) years from the expiration of each\nextended term of the lease, until the original term of the lease has been\nextended for a total number of years agreed upon by the parties. The agreed\nrental paid for the original term and for each of the full number of years for\nwhich the term of the lease may be extended shall amortize the fair market\nvalue of the leased property as of the time the lessor and the Commonwealth\nentered into the lease. The lease shall provide that the Commonwealth may, a t\nthe expiration of the original or any extended term, purchase the leased\nproperty at a stated price, which shall be the balance of the fair market value\nof the leased property as of the time the lease was entered into which has not\nbeen amortized by the payments of rent previously made by the\nCommonwealth.\n(b) If the Finance and Administration Cabinet includes lease -purchase of the\nleased property in a lease with the federal government, the terms of the lease -\npurchase shall be determined through negotiations between the\nCommonwealth and the federal government.\n(6) Except when a lease incorporates a lease-purchase pursuant to subsection (5) of this\nsection, the Commonwealth shall reserve the right to cancel a lease upon written\nnotice within thirty (30) days.","path":["KRS Chapter 56"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=58051","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:49:11Z","sha256":"3f64dd1a7f26cf0638b2624dbb3f193cf41c6c07182c8a9e718bca205beed6c4","source_id":"us-ky","stale":false,"prev":"us-ky/krs-56.805","next":"us-ky/krs-56.808"},"notice":"GroundRules: Original legal text. Not legal advice."}