Third party agreements.

CFR · 2024-01-01 · US · Title 7

The State Director may authorize all or part of a facility to be operated, maintained or managed by a third party under a contract, management agreement, written lease, or other third party agreement as follows: (a) (i) Leasing is the only feasible way to provide the service and is the customary practice as required under § 1942.17(b)(4) of subpart A of part 1942 of this chapter; (ii) The borrower retains ultimate responsibility for operating, maintaining, and managing the facility and for its continued availability and use at reasonable rates and terms as required under § 1942.17(b)(4) of subpart A of part 1942 of this chapter. The lease agreement must clearly reflect sufficient control by the borrower over the operation, maintenance, and management of the facility to assure that the borrower maintains this responsibility; (iii) The lease agreement contains provisions prohibiting any amendments to the lease or any subleasing arrangements without prior written approval from Rural Development; (iv) The lease document contains nondiscrimination requirements as set forth in § 1951.204 of this subpart; (v) The lease contains a provision which recognizes that Rural Development is a lienholder on the subject facility and, as such, the lease is subordinate to the rights and claims of Rural Development as lienholder; and (vi) The lease does not constitute a lease/purchase arrangement, unless permitted under § 1951.232 of this subpart. (2) (i) The lease will not adversely affect the r

official document · source cfr-2024 · id 7:§ 1951.224