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Describing Your Billboard Structure in a Lease

How should you describe your billboard structure in a lease?

The Lease should describe all improvements being made by the Lessee on the property related to the billboard structure. To be specific in our description it should start with all electrical upgrades, the location of the underground conduit, and the location of the pedestal. The description of the actual billboard should start with an attached site plan, the location of the foundation, the height of the billboard, and then a description of the superstructure. Is the top a back to back or a “V” structure. Is the billboard static or electronic. If the billboard is digital it should describe the digital faces, communications devices, the computer and cabinet, and the 5’ arm on each side of the billboard that holds the camera. Also, include possible additional electronics that may include cell antennas. At the expiration or termination of the Lease, the Lessee will have the right to remove all improvements, including the removal of the structure.

Why is an accurate description important?

An accurate description of the improvements protects both the billboard company and the property owner. At expiration or termination of the Lease, the Lessee has the right to remove all its improvement. There is no question that the Lessee owns those improvements and the Lessor has no claim to them. The Lessee is also protected at the time of ownership change since the Lease is assignable to the new Lessor. The Lessor is protected by a full description of the improvements so that placement and construction of the sign has been agreed to in advance.

Can your billboard description allow for a digital upgrade?

When writing a static billboard lease it is advisable that the billboard allows for many upgrades to the billboard including digital faces. Along with the upgrade to digital it should be included that the foundation, column and superstructure may need reinforcements or totally rebuilt. Lessor should be fully informed of the possible ramifications to the sign if digital becomes a possibility. The Lessee wants to make the negotiations to digital as simple as possible so including the possible rebuilding of the sign takes away that uncertainty. Lastly, when writing the Lease it is difficult at this time to guarantee a Minimum Annual Rent. Some Lessee’s may want to agree ahead of time to a Rent associated with the digital. Its difficult years in advance to determine what the Rent should be for a digital sign.

You can also check out this article on Billboard Insider.

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