Today out of home lease and development Andy Goodman talks about how to handle a landlord who won’t renew long-term.

What do you do when a landlord doesn’t want to renew long term?

First of all I want to find out what the landlord is thinking.  What’s his reasoning behind not wanting a long term lease, especially if he is coming off of a long term lease?  Is he going to be developing the property?  Is he selling the property or thinking about it?  Or is there a taking of the property.

Then I check the current sign code within the City to find out if they allow for relocations and new billboards. Sometime I find out that we have no option but to remove the sign.

If they have plans to develop the property I assure the landlord that we’ll work with them to relocate the billboard into another area and I try to get a long term lease based on that. I also explain to the landlord that some Cities don’t allow for new billboards or moving an existing billboard. That can make a difference to the property owner if the income from the billboard is then lost.

If the billboard can’t be relocated then I say let’s go ahead with the development, leave the billboard where it’s at and give me the long term lease. In addition to the long term lease we can add a clause that allows for termination of the lease based on development. But the landlord must produce an approved paid for permit as evidence of moving forward with the project. We will then remove the billboard 30 days prior to construction starting.

If they are going to sell the property I have a few options. The first is to suggest that the property owner carve out an easement and retain the long term lease of the billboard. The second option is to purchase the property from the property owner. Once the Outdoor Company has obtained ownership of the property, they too can carve out an easement around the billboard and then sell the property. Lastly, if neither of the those work, I assure them that the lease is assignable and you’re able to pass it on to the next property owner.

If they don’t believe that the billboard will increase the value of the property then I add language to the lease which says that if I’m removed from the property based upon the selling of the property I want to make sure that they aren’t doing it to go with a competitor.  I put language in the Lease which says that for the next 2-5 years after the sale of the property, no new billboard company can occupy the property.

If I have to take a short term lease, I try to keep it year-to-year.  That way I can plan for sales and takedowns.  Month to month is too short.

You add a development clause to get a long term lease?

You add a development clause and that way they can still feel comfortable that they can get you to remove the billboard.  I agree to the development clause with the billboard removable if there is a paid for, executed permit on the property that shows that the billboard has to be moved.  What I don’t want to do is take the billboard down and five years later they still haven’t built.

You can contact Andy Goodman at andygoodman.age@gmail.com, 310-721-8422.

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