GSA Lease Dispute Resolution
So you’re having a dispute with GSA or your GSA tenant regarding something that has happened or is not happening, at the building you have leased to the Government. First of all, just know that it is almost inevitable with any contractual relationship. As GSA lease terms continue to lengthen, and the lease continues its slow evolution toward putting ALL risk associated with the leasehold on ownership, GSA lease disputes are bound to happen from time to time.
In this blog post, we will outline our advice for handling GSA lease disputes based on decades of experience with GSA and federal government leasing in general. It is also worth noting here that Arco can certainly assist you at any point along the way, though we can be of best use the earlier we are engaged in the process.
This is probably a good time to state the obvious, but Arco Real Estate Solutions is not a law firm. The author of this post, Chad Becker, is not a lawyer. Therefore, this is non-legal advice and should not be construed as such. Our goal is to walk you through the steps we use to guide our clients toward a business negotiated GSA lease dispute resolution. That said, if you need a lawyer we know and have worked with the best in this niche and are always happy to make a referral.
OK, with the legal disclaimer firmly in place, let’s get started.
Step 1: Make sure you understand the GSA lease yourself
OK, this one may seem like a given, but I have worked with clients in the past where a GSA lease dispute had arisen, and our client was simply in the wrong. The catalyst for the entire dispute was a lack of understanding of the lease and the performance requirements contained therein. Before you dig your feet in, make sure you first understand the lease.
Step 2: Try to negotiate a business resolution directly with the Lease Contracting Officer
As with any contractual dispute, the first step is not picking up the phone and getting your lawyer involved. Same with your GSA lease dispute, we want to first approach the dispute as a discussion in the hopes of obtaining a negotiated understanding amongst that parties. Presenting your issues calmly and logically directly to the Lease Contracting Officer (LCO) is typically the best place to start. We would also advise that if the dispute has already made it to this stage, then you should absolutely be engaging with the LCO as they are the only party that has final decision-making authority on behalf of the Government.
Step 3: Submit a Request for Equitable Adjustment
Assuming the conversation with the LCO is either not getting the attention it deserves or a negative decision has been informally communicated by the LCO, we prefer to formalize the GSA lease dispute as well as the LCO’s response via a Request for Equitable Adjustment (REA). While a lawyer can prepare this document on your behalf, and perhaps should be involved behind the scenes at this point, we would suggest that it be sent on your own letterhead. In most cases, we are not yet ready to escalate this to the legal venue at this time. An exception to this might be if the Government or the situation at hand has required urgency in the resolution. In that case, you may want to escalate things to the next step a bit quicker.
In general, the REA is a more formal method of outlining your position and the damages associated with the Government’s position or unilateral scope change. However, much like the attempt to negotiate directly with the LCO above, the government is not required to provide a response. If the issue is still unresolved, we now proceed to the next step
Step 4: Submit a “Claim”
It is now time to submit a “Claim”. This is the most formal path for GSA lease dispute resolution and does force the government to provide a response. While a lessor can submit a claim without the assistance of a lawyer, it is our personal opinion that if you pursue this path then you should obtain legal counsel. The lawyer you choose to work with will outline the game plan moving forward. Since we are now stepping into the realm of legal matters, I will just leave it at that.
Should you find yourself seeking legal representation, please feel free to contact Arco for a recommendation. This is a highly specialized area of law and requires a highly specialized lawyer. Arco has relationships with at least 3 firms that can provide you with outstanding service in this niche.
Step 5: I don’t care if you’re friends with the Senator
OK, this is less of a “step” per se and more of just general advice when working towards a GSA lease dispute resolution. Please do not involve a member of Congress. I get, you know people in powerful places and see this as the ultimate card to play. Unless you believe there is something criminal happening, or the stakes are incredibly large, you should NOT play this card. And, even if the stakes are incredibly large it would still be difficult to convince us that this would be the right move.
If you are considering involving a member of Congress, you better make sure you are correct. The last thing you want to do is burn this bridge by putting the Congressperson in an awkward situation. Also, from an “optics” perspective, most members of Congress don’t want to be seen as using their office to sway the independent decision of a federal agency in such a way as to benefit a friend or donor.
Best case scenario, the Congressperson’s office will send a letter basically asking for information. The GSA will have to stop what they are doing to respond and explain their side of the situation. The Congressperson may ask for additional information, but in all likelihood that will be it. The chances of them getting involved with the details and “forcing” a change in position is incredibly slim.
Best practice… simply don’t go this route.
In closing, Arco wants you to keep the following things in mind if you find yourself in a lease dispute with the GSA:
- Engage Arco early if you believe you will want / need outside assistance
- Strive for a negotiated business agreement
- Keep things calm and logical
- Delay and Avoid legal intervention as long as possible
- If you need legal counsel, only work with a firm that specializes in federal contract / lease disputes
- We strongly encourage you to NOT pick up the phone and call your contact in Congress
And last but certainly not least, we sincerely hope you never need to reference the contents of this post.