CFR > Title 32 - National Defense > SUBTITLE A—Department of Defense > CHAPTER V—DEPARTMENT OF THE ARMY (parts 400 to 668) > SUBCHAPTER J—REAL PROPERTY (parts 641 to 645) > PART 644—REAL ESTATE HANDBOOK > SUBPART C—Acquisition (§644.61 to §644.168) > 644.142—Lease forms and instructions.

644.142—Lease forms and instructions.

ENG Form 856 will be used for Corps of Engineers leases in the United States and possessions, and overseas, for the leasing of unimproved land. ENG Form 527 is recommended for leases of improved property in overseas areas. Standard Forms 2, 2A, or 2B (short form) will be used for all Corps of Engineers leases of improved property in the United States and possessions. Standard Form 2B is limited to rentals not exceeding $3,600 per annum. The General Provisions are on the reverse side of the short form lease.
(a) Mandatory clauses. The following clauses must be included in all Corps of Engineers leases:
(1) Officials Not to Benefit clause (para 15 of ENG Form 527) is required by 18 U.S.C. 431.
(2) Gratuities clause (para 16a of ENG Form 527) is required by 5 U.S.C. 174d.
(3) Covenant against Contingent Fees (para 14, ENG Form 527) is required by 10 U.S.C. 2306(b).
(4) An Examination of Records clause (para 17, ENG Form 527) is required by 10 U.S.C. 2313(b). Exceptions to the use of this clause in 10 U.S.C. 2313(c) are permitted when the contractor is a foreign Government or agency thereof, or when the laws of the country involved preclude it. Also, if the Head of the Agency determines, with the concurrence of the Comptroller General, that the use of the clause would not be in the public interest, it may be omitted in leases covering land in foreign countries.
(5) The Nondiscrimination clause (Executive Order 11063, dated 20 November 1962) is required in all leases in the United States. It is desirable, but is not considered mandatory in overseas leases.
(b) Hold harmless clauses. “Hold harmless” clause will not normally be added to the lease forms. Where lessors insist upon such a clause, however, the following is suggested for use: “The Lessors (licensors) shall not be responsible or liable for injuries to persons or damage to property when such injuries or damage are caused by or result from the Government's use of the premises under the terms of this agreement and are not due to the negligence of the Lessors.”
(c) Escalator clauses. In those cases where a lessor expresses an unwillingness to enter into a lease, extending for a number of years, with a rental consideration that includes a fixed amount for utilities, the following clause may be inserted in the standard lease:
After the first term of the lease, the Lessor or the Government may, by giving notice at lease 90 days prior to the anniversary date of the lease, request an adjustment in rental payments based on an increase or decrease in the cost of utilities. The request must be supported with full justification to include documentary evidence of actual utility costs incurred by the Lessor which are in excess of the amounts estimated at the beginning of the lease term. The requested adjustment in rent will be subject to negotiation, and if granted, will be provided by a Supplemental Agreement to this lease.