Billboard Insider asked out of home leasing and development expert Andy Goodman to review and comment on a standard out of home advertising lease.  Today he looks at the beginning of the lease.  We’ve put Andy’s comments in red.

Lease Agreement

Lease # _________________

I’ve worked for a lot of companies and every company has their lease number so they can keep track of each Lease.  I would advise setting up a system for anybody who is starting a billboard company to have a lease number…

This Agreement made this _____________ day of ________________, 20____ by and between _________________ (“Lessee”), whose address is ______________________.  and __________________ (“Lessor”), whose address is __________________________;

The address of the Lessor and Lessee must be in the body of Lease. Both parties are required to give notice of change of address, change of ownership and notices of change to the Lease. Its also important to have the Lessors address in this section because that address may be different than the address of the Billboard location.

Demise: Lessor hereby leases and demises to Lessee the following described property (“Property”) for the purpose of erecting, operating, maintaining, repairing, modifying and reconstructing outdoor advertising structures, together with any advertising, equipment and accessories that Lessee may desire to place thereon (“Structures”), and Lessor warrants to Lessee the quiet enjoyment of the Property during the term of this lease, and shall not enter into any agreement for or conditioned upon the removal of Lessee’s Structures; the property is located in the City/County of __________________ in the State of ____________, and is more particularly described as:

Existing Structure #:

Address:

Tax Parcel:

Lots of important items here.  The Lessee states they are erecting, operating, maintaining and placing a structure on the property. The Lessee clarifies that all the equipment related to the structure is the property of the Lessee.  The Lease should also state that there may be additional communications systems placed on the billboards for the digital billboard or as telecommunications systems. If additional telecommunications systems are placed on the billboard, the Lessor should request that the rent is shared between the two parties. There are other electronics that can be added to the sign and should be in the lease as well.  

The Lessee has also added the Existing Structure Number and Board Number. These will be used at a later date for locating the Structure or Board within the inventory system on the computer. These numbers will also be used by the sales department for tracking sales.

You’ve also got a parcel number and an address.  Most computer systems will be able find leases based on any one of those things. More important is that the Assessors Parcel Number identifies the leased parcel even if an address has not been assigned to the property. It also protects the Lessee with its exclusive right to lease that parcel. The leased parcel address is important because it may be different from the Lessors address.

I would add to this an Exhibit that would show a site plan of the location. This clarifies  exactly where the billboard is placed on the property so there’s no misunderstanding between the Lessee and the Lessor of where the column is going in the ground. We would also attach as an additional description the legal description of the property.  If the Lessee is providing a site plan they can attach the legal description to the site plan.

In this section I would also add the right to record a memorandum of lease for the property and will need to have the address and the parcel number.  We can also add the legal description, and if you have any attachments to a lease those should be attachments that go along with the memorandum of lease.  

Next week Andy will review the easements section of the Lease.  You can reach Andy at andygoodman.age@gmail.com, 310-721-8422

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