• Rothfelder On Billboard Leases And Disputes With Landlords

    The IBOUSA Spring Conference is scheduled in Savannah, GA on May 8-10, 2019, and once again, Chris Cowlbeck and his staff have planned a fun and educational event. As usual, we can expect to see an outstanding mix of vendor tables, interesting seminars, networking opportunities, and fun dinners and other outings. Check out the IBOUSA website for more details: ibousa.org.

    I’ll be making a presentation on “Billboard Leases and Disputes with Landlords: What are the Tenant’s Rights, and Common Issues to Watch Out For” during the Thursday morning session. You can see my power point presentation here. I hope to see you in Savannah for my presentation and the rest of the good times, but in the meantime, the following is a general outline of what I’ll be saying about billboard leases and disputes with landlords:

    Recording in Real Property Records

    o   Always a good idea to at least record memorandum of lease

    • Include provision in lease requiring property owner to execute memorandum for recording in real property records

    o   Actual and constructive notice

    • Constructive notice of lease binds subsequent purchasers, but…
    • Typically have actual notice because of sign

    Foreclosures and Subordination

    o   If mortgage, deed of trust, lien, etc. executed prior to lease and foreclosed upon, lease is junior interest that will be terminated

    o   Fix: obtain subordination agreement from bank or other lienholder

    Disputes with Subsequent Purchasers

    o   Sign ownership – lease should always contain provision stating that lessee owns sign and permits

    o   Lease validity and enforceability

    • New landowners often claim that lease is unenforceable and/or demand removal of sign
    • Include provision in lease stating it is binding on subsequent purchasers (though not legally necessary)

    o   Entitlement to Rent

    • New property owner is entitled to rent when it acquires sign, but…
    • May need to review deed to determine whether previous owner reserved right to rent

    o   Notice of Ownership Change

    • Lease should include requirement that lessee receive written notice anytime property changes hands

    Rights of First Refusal

    o   Gives lessee the right to match any offer acceptable to the lessor to purchase the property

    o   Strictly construed – mirror image rule

    o   If property is sold without honoring right of first refusal and you discover after the fact, then law allows you to demand the property to be sold to you for price paid by current owner

    o   Valuable because allows you to purchase property, reserve easement, and sell to another buyer

    Automatic Renewal Clauses

    o   Require termination within specific window – e.g., no less than 90 days and no more than 180 days before end of lease term – otherwise lease renews on like terms

    o   Unilateral termination rights?

    o   Avoid “agreements to agree”

    Eminent Domain

    o   Lessee is entitled to compensation for sign and its leasehold interest

    o   Right to participate in condemnation award

    o   Allow relocation to remainder when legally and physically possible

    o   Lessor cannot terminate because of condemnation

    Access, visibility, removal of obstructions, utilities, etc.

    o   Standard clauses but make sure clearly spelled out

    o   Best if rights cover entire Leased Premises

    “Special Provisions”

    o   Be careful – avoid creating conflict or ambiguity

    Merger/Integration clauses

    o   Make sure parties disclaim any reliance on representations not included in lease

    Property Description

    o   Must satisfy the Statute of Frauds

    o   Identify property with “reasonable certainty”

    o   Provide information to locate general area of property – tract, survey and county

    o   Size, shape and boundaries of property

    o   Include survey and metes and bounds when possible

    o   Make sure Lessor is actually the property owner

    Venue and Attorneys’ Fees

    o   Helpful but not crucial

    o   Law generally discourages fixing venue by contract, with limited exceptions

    o   Attorneys’ fees are already recoverable under certain statutes, but…

    o   Most lawsuits do not get to a point where you are asking a judge for attorneys’ fees and many judges are reluctant to award attorneys’ fees

     


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    2 Comments

    1. Jim Schultheis says:

      Excellent advice. Thanks!

    2. Thanks for the advice. Hopefully disputed would better be solved without involving the law. But if a case appears this advice will work.