You can’t prevent an out of home company from removing a sign and then claim it’s yours because it hasn’t been removed.  That’s the lesson of Clear Channel Outdoor vs Karkif I .  Here are the facts.

• In 2019 Clear Channel Outdoor entered into a five year billboard lease with Karkif I (“Karkif”) for two outdoor advertising structures in Chicago.
• The lease contained this language concerning removal of the structures: “[CCO] is the owner of the structures under this lease and has the right to remove the structures at any time but in no event later than the date of termination or expiration of this lease. [Karkif] shall provide all reasonable necessary access to tenant for such removal. [CCO] shall, at [CCO’s] sole expense, comply with all laws, rules, or regulations of any governmental entity relating to [CCO’s] use of the least premises. [CCO] is solely responsible for obtaining and maintaining, any in all requisite government and quasi – governmental approvals…”
• Another section of the lease had contradictory language requiring Clear Channel Outdoor to remove the structures, not later than five business days after expiration of the lease.
• Clear Channel Outdoor and Karkif were unable to agree on terms to extend the lease.
• In January 2024 in the week before the lease expired, Karkif demanded ownership of the structures.
• On January 19, 2024 – the last day of the removal for the structures under the lease – Clear Channel Outdoor attempted to remove the structures, but Karkif denied access to the premises.
• Clear Channel Outdoor sued Karkif  for a breach of contract, conversion and unjust enrichment.
• Karkif asked that Clear Channel Outdoor’s complaint be dismissed because Clear Channel Outdoor had not performed its obligations under the lease by failing to secure permits to legally remove the structures and by not removing the structures in a timely fashion.
• A United States District court denied Karkif’s request for dismissal:”…Karkif cannot rely on its own wrongful retention of CCO’s property to argue that CCO’s right to remove the Structures lapsed due to its inability to remove them from the premises.”

Billboard Insider’s take:  Four thoughts about this case.

(1)  A landlord can’t prevent you from removing a billboard and then claim the sign is theirs because you haven’t removed it.

(2)  A lease which says two different things (the sign must be removed by the lease termination date and also the sign must be removed within 5 days after the lease termination date) is a lawsuit waiting to happen.  Make sure your lease is consistent.

(3) Think carefully about how much time you give yourself to remove a sign in the event of a lease termination.  Five days may not be enough time to remove a billboard due to weather or scheduling or permitting issues.  Two weeks or a month is a better.

(4) You need to know your sign code and understand if you need a permit to remove a sign. The Court in this case seemed to leave the door open for a breach of contract created by the lack of a permit to remove a billboard if a permit was required to remove a billboard.  Any removal provision in your lease should give you enough time to get a removal permit if your sign code requires it.

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