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TITLE 43TRANSPORTATION
PART 1TEXAS DEPARTMENT OF TRANSPORTATION
CHAPTER 21RIGHT OF WAY
SUBCHAPTER LLEASING OF HIGHWAY ASSETS
RULE §21.604Lease Agreement

A lease for highway assets shall be in written form approved by the director and shall include:

  (1) information necessary to contact the party responsible for developing and operating the leased asset;

  (2) the amount of the rent, any required deposits, the term of the lease, and the method of payment of the rental amounts or deposits;

  (3) a statement of the authorized use of the leased asset;

  (4) a statement that any change in the authorized use of the leased asset is subject to prior written approval of the director;

  (5) a detailed description of the asset to be leased, which may be three-dimensional where vertical limits are needed;

  (6) the general design for the use of the leased asset, including any improvements to be constructed, any maps, plans, or sketches necessary to set out the pertinent features in relation to any highway facility and a description of any temporary improvements to be provided by the lessee;

  (7) a statement that any significant revision in the design of the improvements described in subsection (d) of §21.605 of this subchapter is subject to prior written approval by the district engineer;

  (8) a statement that the department shall have the right to approve all construction and plans for construction on the leased asset;

  (9) permission for the employees of and any representatives authorized by the department to enter the leased asset for the purpose of inspection, maintenance, or reconstruction of highway facilities as necessary, or to determine compliance with the terms and conditions of the lease;

  (10) a statement that any improvements located within the leased asset will be maintained by the lessee at the lessee's sole expense, so as to assure that any structures in the area within the highway asset will be kept in good condition, both as to safety and appearance, and that maintenance will not interfere with highway use;

  (11) a statement that in the event the district engineer determines that the responsible party has failed in its maintenance obligation, the department has the right to enter the leased asset to perform such work, all at the expense and liability of the lessee;

  (12) a statement requiring forfeiture of deposits, payment to the department of litigation costs, or any other expense incurred by the department due to nonperformance of the terms of the lease agreement;

  (13) a performance bond when considered necessary by the department;

  (14) adequate public liability insurance for the leased asset, the conduct of lessee's business, and lessee's indemnification obligations to the department set forth in the lease, to be provided by lessee at lessee's sole expense, naming the department as an additional insured and including other endorsements as determined to be necessary by the department, in an amount and form acceptable to the department for the payment of any damages occurring to the highway facility or to the public for personal injury, loss of life or property damage which may occur; except that the director may waive this requirement when the lease is with a county, city, state agency, or the federal government and when the entity has assumed the specific responsibility for payment of any related damages occurring to the highway facility or to the public for personal injury, loss of life, or property damage;

  (15) a statement that the lease may be terminated when, in the sole opinion of the department, the asset ceases to be used in accordance with the use provisions or is abandoned;

  (16) a statement that the lease may be terminated by the department when, in the sole opinion of the department, there is noncompliance with the terms of the lease or the conditions are violated and noncompliance or violation is not corrected within a reasonable length of time determined by the department after written notice of noncompliance or violation has been given and that in the event the lease is terminated and the department determines it necessary to request the removal of lessee improvements located within the asset, the removal shall be accomplished by the lessee in a manner prescribed by the district engineer and at no cost to the department;

  (17) a statement that the lease and leased premises shall not be transferred, assigned, or conveyed to another party without prior written approval by the director;

  (18) a requirement that the lease or any improvements on the leased asset will be kept free of all liens and will not be used as security for any loan; provided however, the lessee will be allowed to mortgage or otherwise pledge or grant a security interest in the leasehold interest to secure financing for the acquisition of the leasehold and for the construction and operation of an improvement permitted under the lease, subject to the terms and conditions contained in the lease;

  (19) a statement that the lessee assumes all risks of losses resulting from the lease;

  (20) a description of nondiscrimination requirements; and

  (21) any other provisions deemed necessary or desirable by the director.


Source Note: The provisions of this §21.604 adopted to be effective August 15, 2002, 27 TexReg 7177; amended to be effective February 18, 2015, 40 TexReg 721

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