Montana Code 77-1-905. Rental provisions for commercial leasing — payments and credits — administration — lease options
77-1-905. Rental provisions for commercial leasing — payments and credits — administration — lease options. (1) The first year’s annual rental payment for state trust land leased for commercial purposes must be paid by cashier’s check or electronic funds transfer, as defined in 32-6-103, and payment is due upon execution of the lease. The department may require the lessee of state trust land for commercial purposes to pay the department’s cost of the request for proposals process, including publication and other reasonable expenses. Failure to make the first year’s rental payment at the time of lease execution must result in the cancellation of the lease and forfeiture of all money paid. In the event of cancellation or in the event that the successful proposer is offered and does not accept the lease, the board may enter into negotiations with other persons who submitted a proposal for commercial purposes in response to the department request for proposals on that tract.
Terms Used In Montana Code 77-1-905
- Amortization: Paying off a loan by regular installments.
- Cancellation: means the cessation of a lessee's possessory rights and privileges under a lease due to the lessee's breach of some term of the lease, applicable statutes, or applicable administrative rules. See Montana Code 77-1-902
- Commercial lease: means a contract to use state trust land for a commercial purpose. See Montana Code 77-1-902
- Contract: A legal written agreement that becomes binding when signed.
- Electronic funds transfer: The transfer of money between accounts by consumer electronic systems-such as automated teller machines (ATMs) and electronic payment of bills-rather than by check or cash. (Wire transfers, checks, drafts, and paper instruments do not fall into this category.) Source: OCC
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Process: means a writ or summons issued in the course of judicial proceedings. See Montana Code 1-1-202
- Property: means real and personal property. See Montana Code 1-1-205
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
(2)The annual rental payment is full market value and may not be less than the product of the land value multiplied by a rate that is 2 percentage points a year less than the rate of return of the unified investment program administered by the board of investments pursuant to 17-6-201. The rate of return from the unified investment program used in this subsection must be determined no less than 30 days prior to the execution of the competitive bid. A commercial lease may include a rental adjustment formula established by the board that periodically adjusts the annual rental payment provided for in the lease at frequencies specified in the lease. The board may allow a credit against the annual rental payment for payments made by the lessee on behalf of the state of Montana for construction of structures and improvements, special improvement district assessments, annexation fees, or other city or county fees attributable to the state’s property interest in land leased for commercial purposes. The board may accept as lawful consideration in-kind payments of services or materials equal to the full market rental value calculated for any commercial lease. A lease issued under this part may include an amortization schedule to be used to determine the value to the lessee of improvements when the lease is terminated.
(3)The department may use funds appropriated from the trust land administration account provided for in 77-1-108 to contract with realtors, property managers, surveyors, legal counsel, or lease administrators to administer the commercial lease, either singly or in common with other leases, or to provide assistance to the department in the administration of commercial leases.
(4)In anticipation of entering into a commercial lease, the board may issue an option to lease at a rental rate that the board determines to be appropriate. An option to lease may not be construed to grant a right of immediate possession or control over the land but may only preserve the optionholder’s exclusive right to obtain a commercial lease on the land in the future.