MISSISSIPPI LEGISLATURE
2002 Regular Session
To: Ways and Means
By: Representative Smith (59th)
AN ACT TO AMEND SECTION 51-9-122, MISSISSIPPI CODE OF 1972, TO PRESCRIBE TERMS, CONDITIONS AND RESTRICTIONS FOR THE RENEWAL OF LEASES OTHER THAN RESIDENTIAL LEASES OF LAND UNDER THE JURISDICTION OF THE PEARL RIVER VALLEY WATER SUPPLY DISTRICT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 51-9-122, Mississippi Code of 1972, is amended as follows:
51-9-122. (1) (a) At any time more than fifteen (15) years after the commencement date of any residential lease from the district, the leaseholder shall have the option to renew and extend the lease for a new sixty-year term by giving the district notice of his exercise of this option to renew.
(b) At any time after the first fifteen (15) years of the term of any residential lease, the then present lessee may obtain from the district a new sixty-year lease on the terms and conditions contained in the then current lease form approved for use in residential leases with the exception of rent. Rent under such sixty-year leases will be payable on the same annual payment date as rent under the lease being renewed. The maximum annual rental under the new lease will be determined by the district as follows:
(i) Renewal of Leases with Fixed Rental (non-escalating): The district will recompute the annual rental due under the lease being renewed as if the lease had contained annual rents at the fixed amount stated in the lease for the first ten-year period, escalating thereafter at ten percent (10%), rounded to the nearest Five Dollars ($5.00), every five-year period. The annual rental which would have been payable as of the renewal date will be the annual rent payable for the first ten-year period of the renewed lease. Annual rental will escalate thereafter at ten percent (10%), rounded to the nearest Five Dollars ($5.00), every five (5) years. Recomputed annual rental will be payable from and after the first day of the renewed lease term and not for the period prior to renewal.
(ii) Renewal of Leases with Escalating Rental: Annual rental will remain payable in accordance with the terms of the lease being renewed with rental continuing to escalate at ten percent (10%), rounded to the nearest Five Dollars ($5.00), every five (5) years during the renewed term.
(c) The district will charge a reasonable non-refundable fee for preparation of the renewal lease. The Lessee will be responsible for obtaining the consent of any mortgage holder to the lease modification.
(d) At any time a lessee is found to be in default or in breach of the terms and conditions contained in the lease, the district shall give thirty (30) days written notice to such lessee before terminating the lease. Such notice shall be by certified mail and shall specifically state the default or breach. If the lessee does not cure the default or breach within thirty (30) days of such notice, then the district shall give written notice to the holder of any mortgage or deed of trust on the leasehold and such holder shall thereupon have thirty (30) days to cure the default or breach before the lease is terminated.
(2) Any leaseholder, other than a leaseholder of residential leases with renewal rights under subsection (1) of this section, shall have the right, exclusive of all other persons, at any time before expiration of the initial term of the lease to re-lease the property on such terms as may be agreed upon between the holder of the lease and the district. The terms may include rent, rental adjustment periods and method of determination, term of years, use, condition of improvements, removal of improvements and compliance with district rules and regulations. The district, before entering into any lease under this subsection (2), shall obtain at least two (2) appraisals from competent appraisers establishing the fair market rental value of the land, exclusive of improvements made by the leaseholder or any predecessor in title, and the land shall not be leased for an amount less than the fair market rental as determined by the appraisers and approved by the board. The district may require rent escalation clauses or other such devices to adjust rental amounts periodically during the lease term. The cost of the appraisals shall be paid by the district and may be included in the costs of re-leasing to be reimbursed by the lessee. Nothing in this section limits or restricts the rights of the district to negotiate terms of any lease in furtherance of any of the purposes authorized by this article and in a manner deemed favorable to the district by the board of directors. Upon expiration of any lease subject to this subsection (2), if the lessee has not obtained a new lease under this subsection, the lessee shall have no peremptory rights to lease the property and, at the direction of the district, shall remove all improvements and other structures on the property immediately upon termination of the lease.
SECTION 2. This act shall take effect and be in force from and after July 1, 2002.