Landlords sometimes argue that a billboard structure is theirs at expiry of a lease.  Today out of home leasing and development expert analyzes how the structures section of an out of home lease can protect your company and minimize costs if the billboard lease is terminated and the structure must come down.  Here is the lease language.  Andy’s comments are in italics.

Structures:  All Structures erected by or for the Lessee or its predecessors-in-interest on the Property shall at all times be and remain the property of the Lessee and, with the exception of the foundation, may be removed by the Lessee before or within a reasonable time of termination or expiration of this Lease Agreement, notwithstanding that such Structures are intended by Lessor and Lessee to be permanently affixed to the Property.  Similarly, all license and permit rights relating to the use of the Property for outdoor advertising purposes are and shall at all times be and remain the property of the Lessee.  If Lessee requires additional permits or approvals to conduct its business, Lessee has the right to, and Lessor’s permission to, obtain the same and Lessor covenants and warrants that it shall cooperate fully with Lessee and shall execute all instruments necessary or appropriate in the matter.

This is good.  The Lease outlines that the billboard is the property of the Lessee. The section could be worded more accurately that the foundation, meaning the column and the concrete, will remain in the ground on the property after termination or expiration of the Lease. For more clarification, the column will be cut 6” below grade and capped, and blacktop, concrete or dirt will fill in to grade. This section could also state, that the foundation remaining in the ground does not constitute occupancy of the property.  

The Lease is also clear on the ownership of the equipment, digital sign, and permits, that they belong to the billboard company. And that the property owner will cooperate with obtaining all necessary approvals and permits.

Its my experience in working in other cities such as West Hollywood CA and New York City that the permit rights once obtained by the billboard company remain with the property.

You can reach Andy at andygoodman.age@gmail.com or 310-721-8422.

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