Outdoor Legal: Make Your Relocation Clause Comprehensive

YESCO Outdoor Media General counsel Michael Wardle stated in a November 2019 Billboard Insider post that relocation clauses can make or break a billboard lease.  Jarman v Reagan Outdoor Advertising demonstrates this.  Here are the facts.

  • In 1982 Reagan Outdoor renewed a lease agreement for two billboard structures on land owned by John and Helene Jarman.
  • The lessors (e.g. Jarmans) were allowed to terminate the lease “if lessor builds or develops the property where the sign is situated.”
  • The lease contained this relocation language: “if any portion of the property is not utilized for such buildings, lessee has the option to use the remaining portion on the same terms.
  • In 1987 the State of Utah acquired a right of way from the Jarmans and asked Reagan to move the signs off the right of way.
  • Reagan moved part of the structures several feet to the east without permission from the Jarmans.
  • In December 1987, shortly after the signs were moved, the Jarmans initiated an action to remove the signs and Reagan contested the action.  Jarman testified that when he executed the lease he intended the two signs to be located exactly where they were and that he had the right under the lease to terminate the lease within 30 days of the sale of the property.  A Reagan general manager testified that he understood that the signs could remain on the property until the Jarmans had totally developed the property and the signs could be moved as necessary to maintain that use.
  • A trial court and appeals courts ruled in favor of the Jarmans finding that the lease was ambiguous and that the additional evidence suggested “that the parties intended the lease to continue Reagan’s right to maintain the signs only in their existing locations.”

Insider’s take:  Your relocation clause should be a specific as possible in stating your rights.  Courts may not uphold ambiguous language.  Look at this comprehensive and specific relocation language from Michael Wardle’s  November 2019 Billboad Insider post.  It addresses condemnation but could be modified to handle a property sale or development.

Condemnation: In the event that a regulatory authority condemns or takes any portion of the premises affecting Lessee’s access or placement of the Billboard, Lessor agrees to allow Lessee to relocate the Billboard on the premises that remains after the condemnation or taking. Lessor agrees that Lessee has the right to reinstall the Billboard at a location that maximizes the Billboard’s visibility to the roadway to which Lessee desires to orient the face(s) of the Billboard, and Lessor agrees to provide unobstructed access to the relocation site for Lessee’s vehicles and equipment that are used to re-install and maintain the Billboard. Lessor agrees that any damages relating to the Billboard paid for by the regulatory authority, including the costs of relocation, will be awarded to Lessee.

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