Billboard Insider’s article discussing the Glorycrest v. Adams Outdoor lawsuit struck home from a transactional perspective. To recap, the Michigan lawsuit led to the invalidation of Adams’s lease of property due to a prohibition on billboards found in a restrictive covenant in a nearly 100 year old right of way agreement  I’ve represented numerous clients that have bought and sold out of home advertising assets across the country. I’m currently helping several buyers, and concerns over title happen to be a common thread in each of these pending transactions.

In any acquisition in which a buyer is paying a considerable purchase price, it is always a good idea to do some level of review of the title history for the property or properties on which the signs that are the subject of the deal are located. The most assured and common method of title review is purchasing title insurance. Prior to issuing a title policy, a title company will provide a title commitment, which will list recorded items in a property’s title history that may warrant investigation.

For example, a property may be encumbered by a mortgage or deed of trust. If one of those debts goes into default, and the default is not properly cured, the underlying property could go into foreclosure, which could lead to the invalidation and loss of the lease. In order to avoid this risk, a would-be-buyer may want to insist on obtaining a subordination and non-disturbance agreement signed by the landowner’s lender prior to closing on a deal.

Relevant to the Glorycrest v. Adams lawsuit, a title review would also reveal previously recorded easements, setbacks, deed restrictions, and right of way acquisitions. More often than not, these types of encumbrances won’t cause concern. It is not unusual for a property to be encumbered by a utility easement or setback requirement, which rarely impede on the ability to construct and operate a billboard. However, and as demonstrated in the Adams case, a thorough review of these title documents is important to ensuring that the sign you are purchasing is not in violation of any restrictions or prohibitions on outdoor advertising.

Billboard Insider asked at the end of its article on Friday, “How might Adams have avoided this problem?” Doing a review of title prior to signing a lease, acquiring an easement, or purchasing a billboard—whether through a formal title commitment, purchasing a simple deed history, or even doing your own research through online real property records—will reveal matters that warrant further investigation and perhaps walking from a deal, or at least insisting on some protection from a seller or landowner.

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