Government Accountability Office Recommends Leasing Practice for Foreign-Owned Real Estate


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Real estate in other countries that is owned by citizens both in and from the United States is affected by taxation and other situations such as leasing practices and behavior. The Government Services Administration has proposed processes to ensure these practices are overseen and there is accountability in place for possible problems.

The Government Accountability Office or GAO is involved in foreign leased and owned real estate that may be part of high-
security government contracts and dealings. There are often classified operations, law enforcement evidence and various types of sensitive data contained within these locations. The GOA has recommended leasing practices to be put in place on these foreign owned properties. Some of these spaces are owned by companies and individuals that reside in Canada, China, Israel, South Korea and even Japan. However about one-third of the owners could not be identified. When using and renting these locations, it is important to know all involved factors.

When the owner of a property is not known, it is important to discover this information before the rented or leased building may be fully used for any confidential or sensitive data. However, if there are security measures in place, it may not be necessary to contact the owner. When the owner is a foreign citizen with the building in the United States, certain processes may need to be in place such as a type of leasing practice. Agencies and employees of the federal government may need access use that is not usually provided to others that rent a space.

Foreign Owned Buildings

It is possible that when a foreign-owned building is rented or leased by the federal government, agencies or employees, there could be security leaks or risks that may include espionage. There may be other security measures such as cameras that could capture additional behavior and activity that should remain confidential and private. However, if the owner is not known, some of these agencies and employees may not be aware that the building or space is in possession of a foreign national. However, some are able to mitigate the risks and are not concerned with these matters.

Some owners of a building may setup a company, a shell entity or a business that is masked by another or someone with fake credentials. When this occurs, the true owner of the real estate may be someone from another country. This could occur for many different reasons, but if it is to spy on those renting the space, it is easier with stealth and hidden cameras. These possibilities should be realized by the federal government agencies and employees that rent various locations for storing documents or for secret meetings. Mitigating the damage these risks may cause is important.

Accountability for Federal Employees

When federal agencies and employees are unaware that the locations they are renting are owned by foreign citizens, it is possible to cause untold damage through these actions. The GAO has recommended certain actions to keep the United States from various foreign dangers even with real estate within the country. This may start with uncovering the true owner of a property before it is used to house confidential information and sensitive data. By implementing new protocols it may be possible to prevent potential disaster long before it transpires. This could also avert the actions of paperwork and processes being leaked to the public.

Various departments and agencies within the government have become involved in possible security risks and national security threats when a real estate property has been used that is owned by a foreign citizen or company. If the building or unit has been in the possession of an allied nation, the possibility of harm is often minimal. However, if the country has no true connection or ties to the United States, and there is a real danger, there is potential that secrets and confidential data may no longer be secure. It is the likelihood that this occurs that agencies plan to hold the real estate owners accountable for when an incident transpires. These actions could lead to a legal battle between countries and the business entity or foreign citizen.

Legal Entanglement of Foreign Held Real Estate

The GAO has recommended that the owner of the leased space should be determined. If he or she is a foreign entity or person, this information should be shared with the agency. If there is a risk of security, a legal battle may ensue to mitigate or eliminate the danger.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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