Billboard Business

Two nevers when negotiating a lease or an easement.

Landlords and easement companies are being more aggressive about adding onerous clauses t0 leases and easements.  Here are two nevers when negotiating a lease or an easement.

Never agree to give your billboard to the landlord or easement holder when the lease expires or terminates.  A steel monopole billboard has a 40 year life.  Most leases run 20 years.  Why would you spend money to put up a billboard and give it away when only half of its useful life is over.  Also, this provision reduces your leverage when it’s time to renegotiate the lease.  You need the option to threaten to take down your board if renewal discussions don’t going well.

Never agree to right of first refusal language unless someone pays for it.  I saw a clause in an easement recently which required a billboard company to notify the easement holder if the board was going to be sold and gave the easement holder 45 days first right of refusal to close on those terms.  This introduces unnecessary delay into any sale process and gives away something – an option to buy – for free.  If you give someone a first right of refusal they should pay for it.

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