.100 General
The Office of Real Property and Space Management facilitates the planning, procurement, and management of real property and space resources in support of the University’s mission. At times, the University may have residential properties available for rent to university faculty and staff. Only full-time faculty and staff are eligible to lease university’s residential properties. Employees interested in obtaining University housing should contact the Office of Real Property to be placed on the waitlist.
As properties become available for rent, the Office of Real Property selects tenants from the waitlist. Generally, selection is made on a first-come first-serve basis; however, final determination of selected tenants is at the sole discretion of the Vice President for Administration and Finance, in order to facilitate the strategic initiatives of the University.
.200 Definitions
| Fringe Benefit | A fringe benefit is a form of pay, including property, services, cash or cash equivalent, in addition to stated pay for the performance of services. |
| Lease | An agreement between two parties expressing the right to use property, plant, or equipment for a stated period. The two parties are the "lessor" and the "lessee." |
| Lessee | The party using the "leased" property. The tenant. |
| Lessor | The party giving the right to use the "leased" property to another party. The landlord. |
| Rent/Rental | To obtain occupancy or use of another’s property, on a fixed or temporary basis, in return for regular payments. Payment, usually of an amount fixed by contract, made by one person or agency at specified intervals in return for the right to occupy or use the property of another. |
.300 Lease Agreement
Employees selected as tenants must enter into a lease agreement with the university. The terms and conditions outlined within each lease agreement are determined by the Office of Real Property and reviewed by the University’s general counsel and Vice President for Administration and Finance.
Generally, leases begin on the first day of the month and often last for a one-year period. Rental payments are prorated for leases that do not begin on the first of the month.
Initial lease payments and required deposits are paid by the lessee at the signing of the lease. All subsequent lease payments made by faculty/staff are required to be made via payroll deduction.
Payments made by outside parties (non-employees) are to be paid directly to the University Business Office.
.400 Taxability of Employer Provided Housing
Section 119 of the Internal Revenue Code (IRC) establishes the requirements under which employer-provided housing becomes a taxable event to an employee.
IRS guidelines require that if an employee pays rent, those rents must be adequate. Adequate rent is defined as five (5) percent of the appraised value of the lodging. In circumstances in which rental amounts charged are less than 5% of the appraised value, the difference must be reported as income on the employee’s Form W-2 and have payroll taxes properly withheld and remitted.
The taxability of rent amounts charged are reviewed upon the execution of each new lease agreement, as well as, any subsequent lease renewals.
.500 Responsibilities
Office of Real Property
- Maintain Rental Property Waiting List for income lease properties
- Execution of lease, amendments, renewals and terminations.
- Maintains lease documents according to Library of Virginia records retention policy
- Receipts first lease payment and applicable deposits
- Ensure timely and accurate collection of rental payments, including notification of employee deduction to the Payroll Services Office.
- Reconciles rental payments received to lease agreements, ensuring complete and accurate payments by lessors
- Ensure accurate and timely payment of utilities by Facilities Management associated with rental properties.
- Ensure maintenance of rental properties is properly executed.
VP for Admin & Finance
- Make final determination of rental property occupants
- Make final determination of amounts charged for rent
Associate Controller, Accounting Operations and Disbursements
- Review lease rental rates prior to execution/renewal to determine potential tax implications for employee lessees.
- Develop/maintain methodology for determination of property Fair Market Values as it relates to employee fringe benefit calculations.
Financial Reporting
- Evaluate income leases for unrelated business income tax implications and include in the Organization Business Income Tax Return 990-T, if applicable.
- Ensure that all lease data and activity is fully and properly disclosed in University’s financial statements according to “Generally Accepted Accounting Principles” (GAAP). Provides the same information to the State Comptroller to include in the Commonwealth of Virginia Financial Statements.
Payroll – Process Payroll Deductions for employees
- Properly withholds rent deductions from employee paychecks and remits to the University Business Office
- For applicable leases, increase taxable income of employees, ensuring proper withholding and remittance of federal and state income taxes. Ensure proper reporting of employer provided housing fringe benefits on an employee’s form W-2/W-3.
University Business Office
- Setup of accounts receivable ledger for newly initiated income leases
- Properly apply rental payments received to accounts receivable balances
- Pursue collections on delinquent rental income receivable accounts
- Ensure accurate and timely reporting of charges posted, payments received, and delinquent accounts to the Office of Real Property
