Insider wrote this in A Billboard Lease is Not a License:
Make sure your billboard leases have language which says the agreement inures to the benefit of successors and assigns. Your billboard lease should also contain a clause permitting assignment without consent. Some landlords will object. Next best is language which says that the lease can be assigned with consent which is not to be unreasonably withheld. What if your billboard lease is silent with respect to assignability? In most states that means that consent is not required to assign the lease but get legal counsel if you are in doubt.
We asked some out of home attorneys for their thoughts. Their responses highlight the importance of consulting a good out of home attorney to review your billboard leases.
Texas out of home attorney Richard Rothfelder of Rothfelder and Falick\
I read the June 2nd Billboard Insider article on “A Billboard Lease is Not a License,” and agree with your advice about including language in the lease providing consent for an assignment or sublease. That way, if the law of the state where the sign is located requires consent for valid assignments, the landowner’s consent contained in the lease has met such a requirement. This would be especially the case in a state like Texas, which expressly requires the landlord’s consent for a sublease or assignment to be valid. Specifically, Section 91.005 of the Texas Property Code provides “During the term of a lease, the tenant may not rent the leasehold to any other person without the prior consent of the landlord.” So, in answer to the question in the article “What if your billboard lease is silent with respect to assignability?”, one definitely needs to get legal counsel in the particular state to determine if consent is required.
California out of home attorneys Marnie Christine Cody Ware and Richard Hamlin of Hamlin Cody
Contracts may be assigned unless the contract itself prohibits assignment. Assigning a lease does not get you off the hook. Even if your lessor consents to an assignment, you are still liable for rent if your assignee does not perform (unless excused by the other party to the contract).
Most lessors will not agree in advance to release you from liability on assignment. If you have a strong assignee, a lessor might release you…but don’t count on it.”
Largely, best practices for drafting a lease most favorable to the lessee should include an express provision addressing rights of assignment. A documented assignment should include a specific affirmation of the assignee’s express assumption and agreement to be bound by the lease. And the lessee/assignor should anticipate negotiations with the lessor to be relieved from all future obligations.
Ohio out of home attorney Michael Galasso of Robbins Kelly Patterson & Tucker
I think your statement is generally accurate and is certainly accurate in Ohio. One comment I would make is that, in Ohio, the assignment of a lease does not release the lessee from future liability under the lease, absent a contrary provision in the lease instrument. So, while silence allows for assignment, it will not relieve the assigning party of liability. I concur with your hierarchy of preferences.
The best option is an express provision permitting assignment without consent, the next best option is with consent not to unreasonably withheld, and the last option being silence.
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