3.2.3 Lease Requirements

Borrowers must use a lease approved by USDA and that complies with 7 C.F.R. § 3560.156 and state law. Some lease requirements are:

• Lease must be in writing.
• Initial lease must be for a 1-year term.
• If the tenant is not subject to occupancy termination, a renewal lease or lease extension must be for a 1-year period.
• Lease must contain procedures that the borrower and the tenant must follow in giving notice required under terms of the lease including lease violation notices.
• Lease must contain procedures for resolution of tenant grievances consistent with the requirements of 7 C.F.R. § 3560.160.
• Lease must have terms under which a tenant may, prior to lease expiration, terminate the lease for good cause with 30 days’ notice.