3 Common Errors in Out of Home Leases

On last week’s Billboard Insider podcast,  Insider mentioned three business errors to avoid in an out of home lease:

(1) Rent too high…It’s like pulling teeth to fix a bad lease.  If you inherit a lease with rent too high you will be the bad guy…just because you tried to get the lease to market.

(2) Having too high of an annual inflator in a lease.  Inflation’s been 1.5% year for the last 10 years.  I see leases with 5%/year price inflators.  That is saying the lease is growing 3 times as fast as inflation and the margin on that sign is going down every year.

(3) The removal clause needs to say at termination of the lease you can remove the structure to grade.  Because if you’re out in some farmers corn field and it’s bad ground and you’ve had to pour hundreds of yards of cement…going through the guys cornfield and taking out and disposing all of the cement will be in many cases as costly as the original construction of the sign.

Want to learn more about what’s in a good out of home lease or easement?  Purchase Billboard Insider’s Guide to Leases and Easements.

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