I received a call from a client who has billboards on a state highway in California. His concern and questions are in regard to a Cal Trans construction project that will close the entire section of freeway in front of his billboards for 6 months or longer. He wanted to know about making a claim against Cal Trans for lost revenue.

My first question to him, do you have the language in your lease that gives you the right to abate your rent to the Lessor if the traffic is diverted? His response was, NO! Once again this is a good example for all Lessees to include this language and not let the property owner remove it. It is not negotiable. Secondly, the Lessee should have hired at minimum a consultant to review his lease to make sure it had all the necessary language, including this abatement clause. Or, consulted with a billboard attorney that would have advised that this language be included.

After finding out he has no rights to abate the rent, I told him that we should talk to a sign valuation expert like Donna Desmond Associates or SignValue for their take on the situation making a claim against Cal Trans. I also contacted a billboard attorney, Marnie Cody of Hamlin|Cody, and asked her the same question. Donna and Marnie responded the same, you must have an abatement clause in the lease, and in the state of California you have no abutters rights to visibility in this situation. Therefore, the Lessee has no claim against Cal Trans. I hope that I am relating this information correctly and will take constructive criticism from those who know.

The bottom line, your Lease must contain an abatement clause.

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