Chapter 33-3 RESIDENTIAL LEASE REQUIREMENTS

CHAPTER 33-3
RESIDENTIAL LEASE REQUIREMENTS

33-3-1 Terms and Conditions.

Residential leases shall be governed by the terms and conditions set forth in the residential lease subject to the provisions of this title. The terms and conditions of a lease may be modified only with the approval of the Tribal Council. The Lessee is responsible for understanding the terms and conditions within the lease.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-2 Duration and Renewal.

Unless otherwise stated in the lease, no lease shall be approved more than twelve (12) months prior to the commencement of the term of the residential lease. For leases approved for the purposes of carrying out affordable housing activities pursuant to the Helping Expedite and Advance Responsible Tribal Home Ownership Act of 2012 (HEARTH) Act, 25 U.S.C.A. §415(h), the maximum term shall not be more than seventy-five (75) years. The Tribal Council will not make an approval determination regarding a lease renewal, unless the Lessee notifies the Tribal Council of the intent to renew, no later than one year before such lease is due to expire.

If the Lease provides for an option to renew, the Lease must specify:

(A) The time and manner in which the option must be exercised or whether it is automatically effective;

(B) Lease term;

(C) That confirmation of the renewal will be submitted to the Tribal Land Office, unless the lease provides for automatic renewal;

(D) Whether approval by the Tribal Council to the renewal is required;

(E) That the Lessee must provide notice of the renewal to the Nation Housing Department and any sureties and mortgagees;

(F) The additional consideration, if any, that will be due upon the exercise of the option to renew or the start of the renewal term; and

(G) Any other conditions for renewal (e.g., that the Lessee not be in violation of the Lease at the time of renewal).

All approved lease renewals will be recorded with the Tribal Land Office and LTRO.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-3 Obtaining a Residential Lease.

Information on obtaining a residential lease shall be available from the Nation’s Housing Department or such other Nation department properly delegated the responsibility by the Tribal Council.

(A) All applicants for a residential lease shall submit the following information, in the appropriate form, to the Nation Housing Department or such other Nation department properly delegated the responsibility by the Tribal Council:

(1) Financial information that is sufficient to determine the Lessee’s ability to carry out the lease;

(2) Site survey and legal description, as required under Section 33-3-5;

(3) Nation environmental review as required pursuant to Chapter 33-7; and

(4) Other documents as may be required by the Tribal Council and pursuant to the residential leasing procedures.

(B) All residential leases shall contain, at a minimum, the following provisions:

(1) The legal description of the tract, location, or parcel of the land being leased as provided in Section 33-3-5;

(2) The purpose of the lease and authorized uses of the leased premises;

(3) The parties to the lease;

(4) The term of the lease;

(5) The effective date of the lease;

(6) The ownership of permanent improvements and identification of the responsible party for constructing, operating, maintaining, and managing permanent improvements on the leased premises;

(7) Payment requirements, including provisions regarding acceptable forms of payment, late payments, penalties, and interest, among others;

(8) The dates on which all payments are due;

(9) Language specifying that the Lessee shall make payments directly to the Nation Housing Department, which shall maintain documentation of lease payments that are sufficient to enable the Secretary to discharge the trust responsibility of the United States;

(10) Unless otherwise provided in the lease, payments may not be made or accepted more than one year in advance of the due date;

(11) The obligations of the Lessee to the Nation are also enforceable by the United States, so long as the land remains in trust or restricted status;

(12) There must not be any unlawful conduct, creation of a nuisance, illegal activity, negligent use, or waste of the leased premises;

(13) The Lessee must comply with all applicable Nation and federal laws, ordinances, rules, regulations, and other legal requirements;

(14) If historic properties, archeological resources, human remains, or other cultural items not previously reported are encountered during the course of any activity associated with this lease, all activity in the immediate vicinity of the properties, resources, remains, or items shall cease and the Lessee will contact the Nation and the BIA to determine how to proceed and appropriate disposition;

(15) The Nation and the BIA have the right, at any reasonable time during the term of the lease and upon reasonable notice, in accordance with this law and any other applicable laws, policies, and rules of the Nation, to enter the leased premises for inspection and to ensure compliance;

(16) The Nation and the BIA may, at their discretion, treat any failure by the Lessee to cooperate with a request to make appropriate records, reports, or information available for inspection and duplication as a lease violation;

(17) The Lessee holds the Nation and the United States harmless from any loss, liability, or damages, including costs and attorneys’ fees, resulting from the Lessee’s use or occupation of the leased premises;

(18) The Lessee indemnifies the Nation and the United States against all liabilities or costs relating to use, handling, treatment, removal, storage, transportation, or disposal of hazardous materials, or the release or discharge of any hazardous material from the leased premises that occurs during the lease term, regardless of fault, with the exception that the lease may contain a provision providing that the Lessee is not required to indemnify the Nation for liability or cost arising from the Nation’s negligence or willful misconduct;

(19) Due diligence, insurance, and bonding requirements as provided in this chapter; and

(20) If the leased premises are within an Indian irrigation project or drainage district, lease must state the following: “If the leased premises are within an Indian irrigation project or drainage district, except as provided by 25 C.F.R. § 171, the Lessee must pay all operation and maintenance charges that accrue during the lease term. The Lessee must pay these amounts to the appropriate office in charge of the irrigation project or drainage district.”

(C) The Nation Housing Department or other Nation department, if delegated to the said office or department by the Tribal Council, shall ensure that a copy of all deeds, leases, subleases, assignments, amendments, and renewal notices related to leases, leasehold mortgages, and terminations shall be provided to the Secretary of the Interior, or such other office delegated authority by the Secretary, and for purpose of recording with the LTRO. The Tribal Council shall endeavor to provide such notices within thirty (30) days of the effective date of the instrument or action. Additionally, proof of lease payment(s) made directly to the Nation shall also be provided to the Secretary.

(D) The Nation Housing Department is responsible for executing and managing all residential leases and maintaining the records of all deeds and residential leases. The Nation Housing Department prepares leases for Tribal Council review and approval. The Nation Housing Department will file the executed lease with the Tribal Land Office for recording.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-4 Recording.

(A) The Tribal Land Office is responsible for recording all deeds and residential leases. In carrying out the responsibility to maintain all records of residential leases, the Tribal Land Office shall:

(1) Record each deed, lease and leasehold mortgage in a log which shall contain, at a minimum, the following information:

(a) The name(s) of the grantor and grantee of each deed, the name of Lessee of each lease, or the name of the Lessee and mortgagee in the case of a leasehold mortgage, identified as such;

(b) The date and time of receiving the document(s) for recording;

(c) The filing number to be assigned by the Tribal Land Office, which shall be a unique number for each deed, lease, leasehold mortgage, and accompanying document; and

(d) The name of the Tribal Land Office staff person receiving the lease.

(2) Endorse the following information from the log upon any lease received for recording:

(a) The date and time of receipt of the deed, lease or leasehold mortgage;

(b) The filing number assigned by the Tribal Land Office; and

(3) The Tribal Land Office shall make a true and correct copy of the lease, leasehold mortgage, or deed and shall certify it as follows:

I certify that this is a true and correct copy of a document received for recording this date.

Given under my hand and seal this ________ day of __________.

____________________

(Signature)

____________________

(Date)

(4) The Tribal Land Office shall maintain an index where copies of all certified leases, leasehold mortgages, and deeds, and their accompanying documents, are located and may be retrieved by a search based on the legal description of the leased, mortgaged or deeded premises. After recording, the lease will be returned to the Nation Housing Department for retention and management.

(5) The Tribal Land Office shall record copies of all leases and lease documents with the LTRO.

(B) Records of activities taken pursuant to this title are the property of the Nation. Records compiled, developed, or received by the Secretary are the property of the United States.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-5 Land Descriptions.

Residential leases and deeds shall contain adequate site surveys and legal descriptions based on metes and bounds, rectangular or lot and block systems sufficient to permit the LTRO to identify the particular leased site and record the lease.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-6 Appraisal; Local Studies.

(A) The fair market lease value shall be determined by an appraisal or equivalent procedure performed by the Tribal Land Office and approved by the Tribal Council utilizing the following data: improvement cost, replacement cost, and sales and lease data of comparable sites or by similar methodology as approved by the Tribal Council and deemed to be in the Best Interest of the Nation. An appraisal log reporting the methods of appraisal and value of the Nation’s Trust Land shall be attached to every residential lease.

(B) Alternatively, the fair market lease value shall be determined by an appraisal performed by a licensed appraiser utilizing the Uniform Standards of Professional Appraisal Practice, or other commonly accepted method of appraisal. An appraisal log describing the method of appraisal and value of the Nation’s Trust Land and shall be attached to every residential lease.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-7 Fair Market Lease Value.

(A) No lease shall be approved for less than the present fair market lease value as set forth in the appraisal, except as follows:

(1) The lease is for housing for public purposes; or

(2) The Nation submits a signed certification or Nation authorization stating that it has determined the negotiated amount to be in the Best Interest of the Nation.

(B) A lease may be structured as a flat lease rate.

(C) A residential lease may allow for rent adjustments. The lease shall specify how adjustments will be made, who will make such adjustments, when adjustments will go into effect, and how rent adjustment disputes shall be resolved.

(D) A lease may provide for periodic review for rent adjustments. Such reviews may give consideration to the economic conditions, current housing supply, and other public needs.

(E) The Tribal Land Office shall keep written records of the basis used in determining the fair market lease value, as well as the basis for any rent adjustments.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-8 Environmental Review Process.

Unless exempted pursuant to Chapter 33-7, the Tribal Council shall not approve a residential lease until the residential Lessee has completed the environmental review process herein. Any lease approved and executed without complying with this section shall be null and void.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-9 Insurance.

(A) A Lessee shall provide insurance necessary to protect the interests of the Lessor and in amounts sufficient to protect all insurable improvements on the premises.

(B) The insurance may include, but is not limited to, property, liability or casualty insurance, or other insurance as specified in the residential lease.

(D) The Tribal Council may waive this requirement if the waiver is in the Best Interest of the Nation. The waiver may be revoked at any time if the waiver ceases to be in the Nation’s Best Interest.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-10 Performance Bond.

(A) If a performance bond is required by the lease, the Lessee shall obtain a satisfactory performance bond in an amount sufficient to secure the contractual obligations of the lease. Such bond shall be for the purpose of securing the Lessee’s contractual obligations under the residential lease and may guarantee:

(1) The annual lease payment;

(2) The estimated development cost of improvements;

(3) Any additional amount necessary to ensure compliance with the lease; and

(4) Restoration and reclamation of the leased premises.

(B) The Tribal Council may waive the bond requirement, or reduce the amount, if the lease is for housing for public purposes or if doing so is in the Best Interest of the Nation. The Nation Housing Department or other Nation department, if delegated to the said office or department by the Tribal Council, shall maintain written records of waivers and reductions.

(1) Certificates of deposit issued by a federally insured financial institution authorized to do business in the United States;

(2) Irrevocable letters of credit issued by a federally insured financial institution authorized to do business in the United States;

(3) Negotiable Treasury securities; or

(4) Surety bond issued by a company approved by the U.S. Department of the Treasury.

(D) The Tribal Council may impose additional requirements for performance bonds beyond those listed in this title; including, but not limited to, requiring performance bonds to be irrevocable, or requiring notification to the Nation in the event the performance bond is cancelled.

(E) The performance bond must require the surety to provide the Nation Housing Department or other Nation department, if delegated to be said office or department by the Tribal Council, notice at least sixty (60) days before canceling a performance bond or other security. This will allow the Nation to notify the Lessee of its obligation to provide a substitute performance bond or other security and require collection of the bond or security before the cancellation date. Failure to provide a substitute performance bond or security is a violation of the lease. The Nation may allow for notice that is less than sixty (60) days if the Tribal Council determines that doing so is in the Best Interest of the Nation.

(F) The obligations of the Lessee and its sureties to the Nation will be enforceable by the United States so long as the land remains in trust or restricted status.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-11 Improvements.

All residential leases shall require the Lessee to exercise due diligence and best efforts to complete construction of any improvements within the schedule specified in the residential lease.

(A) Lessee, at Lessee’s expense or as otherwise provided in the residential lease, may construct improvements under a residential lease if the lease specifies or provides for the development of:

(1) A plan that describes the type and location of any improvements to be built by the Lessee; and

(2) A general schedule for construction of the improvements.

(B) Lessee shall provide the Nation Housing Department and the Nation’s Construction Management Department or other Nation department, if delegated to the said office or department by the Tribal Council, written justification as to the nature of any delay, the anticipated date of construction of the improvements, and evidence of progress toward commencement of construction. The Nation Housing Department or other Nation department shall report such information to the Tribal Council.

(C) When requested by the Tribal Council, or Nation Housing Department or other Nation department, if delegated to said office or department by the Tribal Council, or otherwise required in the residential lease, Lessee shall further provide the Nation Housing Department or other Nation department, in writing, an updated schedule for construction. The Nation Housing Department or other Nation department shall report such information to the Tribal Council.

(D) The construction of any improvement must comply with all applicable Nation laws.

(E) Failure of the Lessee to comply with these requirements will be deemed a violation of the residential lease and may lead to termination of the residential lease pursuant to Chapter 33-5 of this Title.

(F) Improvements to the premises shall become the property of the Nation unless otherwise provided for in the residential lease. If improvements will be removed, the residential lease shall specify the maximum time allowed for such removal. If the improvements are to remain the property of the Lessee pursuant to specific terms of the lease, title to such improvements shall be recorded in the Tribal Land Office through the procedures referenced in this title at Section 33-3-4.

(G) Under those leases where improvements remain the property of the Lessee, said Lessee may develop equity value in the improvements, and sell its interest in the residential lease based on the equity value. The Tribal Council, on behalf of the Nation, has a right of first refusal to purchase the interest.

(H) The residential lease may provide that upon expiration of the residential lease, the Lessor may purchase improvements to the premises (if the lease provides that such improvements remain the property of Lessee) at fair market value.

(I) If the residential lease provides that upon expiration of the residential lease any reclamation, restoration, or remediation is required due to the nature of the improvements, then a plan for such action shall be included that sets forth the obligations of the Lessor and the Lessee.

(J) Unless required by applicable federal law, no fee, tax, assessment, levy, or charge imposed by a state or political subdivision shall apply to permanent improvements, activities under residential leases, or the leasehold or possessory interest on the Nation’s Trust Land. The Nation may impose its own taxes or other charges on the same.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-12 Subleases, Assignments, Amendments and Leasehold Mortgage.

(A) Subleases, assignments, amendments, or leasehold mortgages of any residential lease shall be by written consent of the Tribal Council and Lessee, unless otherwise provided herein.

(B) The residential lease may authorize subleases and assignments, in whole or in part, without approval from the Tribal Council and execution from the executing official, provided a copy of the sublease or assignment is provided to the Tribal Council through the Nation Housing Department or other Nation department designated by the Tribal Council, and the following conditions, where applicable, are met and stated in the residential lease:

(1) There is no event of default under the residential lease or violation of this title;

(2) Any restrictions and use limitations on the use of the premises shall continue to apply to any sublessee or assignee;

(3) The proposed assignee or sublessee submits current financial information sufficient to show the sublessee’s or assignee’s financial adequacy;

(4) The Lessee shall not be relieved or released from any of its obligations under the residential lease, except as otherwise expressly authorized therein;

(5) The Lessee’s mortgagees have consented;

(6) It is in the Nation’s Best Interest.

This subsection (B) in no way relieves the Lessee or the sublessee from carrying out their duties under the residential lease, which may contain additional restrictions and conditions.

(C) The lease may authorize a leasehold mortgage for the purpose of financing to develop and improve the premises subject to approval by the Tribal Council and execution from the executing official.

(D) If a sale or foreclosure of the Lessee’s premises or improvements on the premises occurs and the mortgagee is also the purchaser, the mortgagee may assign the lease without approval of the Tribal Council or Lessee, provided the assignee agrees in writing to be bound by all the terms and conditions of the lease. If the purchaser is a party other than the mortgagee, approval by the Tribal Council and execution from the executing official is required, provided the purchaser agrees in writing to be bound by all terms and conditions of the lease.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-13 Applicable Law.

The lease shall state that it is governed by Nation law and applicable federal law. The parties to the lease may further provide for the application of any other body of law, such as the laws of a specified state and the order of application. The lease shall further mandate compliance with all applicable laws, ordinances, rules, and regulations, and the residential leasing procedures.

(Enacted by PBP TC No. 2023-222, August 10, 2023)

33-3-14 Lease Approval and Issuance.

The Tribal Council has the authority to give final approval for all residential leases and may delegate some or all of its authority to other Nation departments on behalf of the Nation.

(A) Unless otherwise provided pursuant to Section 33-3-12, a lease that meets the requirements of this title shall be submitted to the Nation Housing Department or other Nation department designated by the Tribal Council, for consideration. Final determination of whether the lease shall be approved or not rests with the Tribal Council. After review, if an approval is given, the executing officials shall be authorized to sign the lease on behalf of the Nation.

(B) Notice of Decision. The Nation Housing Department or other such person designated by the Tribal Council shall provide written notice of all final Tribal Council decisions to the prospective Lessee, by personal delivery, facsimile transmission, email, or United States first class mail to the mailing address as set forth in the lease documents. Failure to give or receive such notice shall not affect the validity of any determination, recommendation, or action.

(Enacted by PBP TC No. 2023-222, August 10, 2023)