Is a billboard lease valid if if contains an altered legal description and is improperly acknowledged?  Yes.  That’s the lesson of Engler v Franklin Outdoor.  Here are the facts.

• Franklin Outdoor asked Michael Flynn if it could erect a billboard on Flynn’s property.  James Franklin and Michael Flynn. walked the property and placed a stake to mark the location of the billboard.
• Franklin Outdoor and Michael Flynn entered into a ten billboard lease agreement in 1987.  The lease did not designate the location of the billboard on the property and had an incorrect legal description.
• Franklin’s son scratched out the incorrect lease description, added the correct one, had a company secretary acknowledge the signatures on the lease and recorded the lease.
• In April 1997 Gary Engler purchased the property from Flynn.  The purchase agreement disclosed the billboard lease.
• After an unsuccessful attempt to negotiate higher rent, Engler filed suit to eject Franklin, claiming that the altered recorded lease was invalid.
• A Minnesota district court and appeals court rejected Engler’s attempt to void the lease.  The Court said: “It is undisputed that Flynn and the Franklin company intended a ten-year lease, with two ten-year renewal terms, for the erection and maintenance of a billboard on a specific portion of Flynn’s land located at 2809 Clearwater Road in Stearns County. It is also undisputed that the lease was to run with the land, that the recorded lease alterations did not change any of the lease terms, and that Engler had actual notice of the existence and location of the billboard and the lease terms before he purchased the land from Flynn….Although an improper acknowledgment and a corrected legal description may have been relevant to the recordability of the lease, neither affected the essential elements of the lease to which the parties agreed and which had been performed for nearly ten years.”

Billboard Insider’s take:  Getting documents right can avoid future disputes with new landlords who seek an excuse to raise the rent.  Franklin prevailed, but might have avoided the lawsuit  if the lease had identified where on the property the billboard was placed and if the original legal description was correct.

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