I couldn’t agree more with Insider’s takeaways from the Lamar v. Country Side Restaurant Inc case out of Wisconsin. I would add that, not only should an operator that loses a sign due to condemnation carefully read all documents and be mindful of release language, but also pay close attention to deadlines.

You can always count on the State of Texas, acting through the Texas Department of Transportation (TxDOT), to have at least a handful of highway improvement projects going on across the State. Of course, those projects often result in the displacement of billboards. TxDOT treats billboard differently than any other improvement when it comes to compensation owed and paid in condemnation. The State has all but done away with a billboard owner’s right to what are traditionally called “relocation benefits,” only allowing for the recovery of nominal expenses. In its place, TxDOT has provided sign owners the ability to receive an “acquired sign credit,” or what Texans refer to as a “relocation permit,” if the sign owner complies with specific settlement procedures.

Relocation permits are incredibly valuable in this market where ordinary sign sites have all but been picked over. They allow sign owners to utilize certain relaxed spacing requirements, thereby opening up the universe of available sign locations.

When a property encumbered by a billboard is subject to condemnation, the State will make separate offers to the fee owner and the sign owner. The fee owner will be offered the value for the dirt and improvements, whereas the sign owner will be offered the value for its billboard. The value of the billboard is typically determined under a cost approach, whereby the State will estimate the replacement cost for the impacted sign, then reduce for deprecation. The State will offer that depreciated cost value to the sign owner. A sign owner may then negotiate with TxDOT if it believes the State’s offer is too low.

Here’s where timing and deadlines come into play. TxDOT requires a sign owner to reach and sign an agreement for the value of the sign before the commencement of condemnation proceedings in order to remain eligible for a relocation permit. Failing to do so results in the loss of eligibility for a relocation permit. It’s also important that the sign owner remove its sign after receiving a notice to vacate and timely submit an application for a relocation permit, in order to avoid comprising eligibility for a relocation permit.

Takeaway: Be mindful of your deadlines so as not to risk waiving valuable entitlements in condemnation.

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