The Role of Attorneys in California Billboard Transactions

Billboard transactions in California often involve multiple participants and parallel processes, including buyers, sellers, operators, lenders, escrow services, and regulatory agencies. These matters may proceed smoothly when roles and documentation are clearly aligned, but timing and coordination can become complex when responsibilities overlap. Attorney oversight, including reviewing documents, preparing and approving escrow instructions, and ensuring the transaction closes according to plan are an integral part of the process.

Multiple Processes Moving at the Same Time

Billboard acquisitions and transfers in California frequently involve layered agreements and approvals. Instruments like asset purchase agreements, site agreements, assignments, regulatory filings, and escrow instructions may be prepared or circulated at different stages by different parties. With so many moving parts, it is important to coordinate and monitor all participants’ activities to keep the closing process moving smoothly.

Attorneys review the operative documents alongside escrow instructions, recorded instruments, and related agreements to confirm that the paperwork reflects the intended structure of the deal.

Document Consistency Across Stages

California billboard closings typically rely on a set of interrelated documents. These may include a purchase agreement, bill of sale, easements, leases & subleases, consents, amendments, assignments, and other documents, each of which serves a different function. When documents are generated or revised at different points in the process, it is easy to lose track of the operative items. Consistency and accuracy are important.

Attorneys focus on alignment from one document to another, and pay attention to the details that may, for instance, change the meaning of a defined term, alter transfer provisions, or create unintended consequences when changes to one document are not consistently reflected on other relevant documents. Attorneys help identify and correct differences that may affect timing and execution, among other critical matters important to the structure of the transaction and its successful closing.

Escrow and Administrative Steps

Escrow services play an administrative role in many California billboard closings, including holding funds, recording documents, and processing closing instructions. Escrow procedures are typically based on the instructions provided by the parties and the documents submitted to escrow for its handling.

Because escrow functions within the scope of the instructions provided to it, those instructions must be prepared and delivered with clarity and consistent with the parties’ agreements. Attorneys review each document separately, focus on both the details and the big picture, ensure each final document accurately reflects the whole transaction, and coordinate how and when escrow may carry out closing steps at the joint instruction of all the parties.

Regulatory and Contractual Dependencies

Billboard matters in California may also involve regulatory matters or contractual conditions that affect closing. Assignments of billboards, development agreements, consent requirements, permitting considerations, or regulatory filings may need to be addressed before or alongside escrow closing steps.

We are aware of one case in which a developer (not our client) signed a Development Agreement with a city.  The agreement promised the developer exclusive billboard rights through a large part of the city.  The agreement also required the developer to spend several hundred-million dollars on infrastructure improvements.

The developer completed the improvements.  The city promptly entered into an agreement with a competing billboard operator, allowing the operator to build about sixty signs in the city in exchange for a percentage of the revenue.  The developer sued the city and lost at the trial level. 

The court said the development agreement was unenforceable because it did not meet state requirements!  

The developer is now suing the city to recover the cost of the improvements.

Attorneys identify these matters and address them, often as contingencies to the successful transaction, and assure action is taken at closing in sequence and compliance with existing regulatory requirements and contractual obligations–old and new.

Managing Timing and Process Flow

California billboard closings can be time sensitive and susceptible to delays, especially where multiple parties or approvals are involved. Delays may occur when due diligence is not performed or is incomplete, and when documents require changes and updated authorizations. The intersection of legal review and oversight need not interfere with process flow when it is properly managed.

Attorneys experienced with handling billboard transactions know how such transactions are best structured, what items have to be addressed before or after closing, and how to keep the overall closing process moving forward. Though third-party approvals are often outside of your control, setting realistic schedules, reasonable expectations, and time management will typically keep the process flowing. 

Successful Billboard Transactions Focus on Client Goals, Good Documentation, and Process Flow

Hamlin | Cody assists clients who are parties to billboard transactions in California and elsewhere, including drafting, reviewing, and coordinating documents for successful closings. With a focus on aligning the parties’ goals, preparing clear and consistent documents that reflect those goals, and overseeing the closing process, Hamlin | Cody ensures the process flows properly and results in success.

Billboard agreements in California operate within a legal framework defined by state statutes, local regulations, and established principles of real property and contract law. These legal considerations influence how billboard arrangements are structured, documented, and interpreted over time. Understanding the role of these laws provides context for how billboard agreements function within the broader regulatory environment.

Because billboard agreements often remain in place for extended periods, they must address issues and concerns that apply at the time of execution as well as those that may evolve over the life of the agreement. California law plays a central role in shaping both the form and operation of these arrangements.

The Outdoor Advertising Act

California’s Outdoor Advertising Act and Code of Regulations establish statewide statutes and standards that govern billboard placement and operation. The Act and Regulations address issues such as licensing, permitting, placement, spacing, maintenance, and penalties; and it provides the foundation for regulatory oversight of outdoor advertising along state highways and freeways. Enforcement authority is generally exercised at the state level, often in coordination with local agencies.

Billboard agreements are typically drafted with reference to these laws. The Act and Regulations influence how agreements address compliance, continuation of permitted uses, and the conditions under which signage may be altered or removed. Provisions of law can often form the baseline for the respective duties and obligations of the parties in a billboard agreement.

Local Zoning and Municipal Authority

In addition to state law, local governments exercise authority over land use and zoning. Municipal and zoning ordinances may impose requirements and restrictions that affect a billboard’s placement, height, illumination, and location in ways even more restrictive than state law. Billboard agreements should reflect compliance with both local and state laws and ensure contractual terms and the parties’ responsibilities are consistent with all applicable municipal and zoning ordinance as well as state law.

Property Law and Billboard Interests

Billboard agreements are the product of the intersection of California real property law and outdoor advertising law that can culminate in various legal interests through leases, easements, licenses, or other site-use arrangements. The form and substance of the agreement defines what kind of interests are created and how they may be allocated between the parties by providing such interests as limited occupancy, restricted use, full ownership, construction, management and other ways the parties’ may agree to address underlying property and billboard improvements.

Property law principles, coupled with parties’ goals, shape many facets of an agreement, such as the lifespan and assignability of billboard interests and their relationship to future transfers of the underlying property or billboard improvements. These considerations influence how billboard agreements are drafted, recorded, assigned, and enforced over time.

Contract Law and Agreement Structure

California contract law shapes how billboard agreements are interpreted and enforced. Provisions addressing term length, renewal, assignment, and termination are drafted within this legal framework. Contract law also governs how agreements are read as a whole, emphasizing consistency and clarity across all provisions.

Real Life Changes and Long-Term Agreements

Many billboard agreements are designed to operate for decades. During that time, changes in property development, infrastructure, roadway projects, and zoning can alter the conditions under which a proposed or existing billboard will operate.

Agreements should be drafted with care and consideration for conditions that can evolve and may change the parties’ position, their goals, and the respective benefits of an intended long-term agreement.

Interaction Between Multiple Legal Frameworks

Billboard agreements are shaped not by a single area of law, but by the interaction of multiple legal frameworks. State statutes, local ordinances, property law principles, and contract law all apply simultaneously. Understanding how these areas intersect helps explain why billboard agreements often include detailed definitions, cross-references, and compliance provisions.

This layered legal environment sets billboard agreements apart from other real estate contracts and makes careful attention to their unique details essential.

Legal Context for Billboard Agreements

Hamlin | Cody assists clients with interpreting and documenting billboard agreements in California, with attention to the statutory, regulatory, and property law considerations that shape these arrangements.