Commercial Tenants Have Rights Too

Did you ever wonder if there’s an avenue for recourse when the government seizes property and doesn’t pay you the fair market value for it?  This type of action is called inverse condemnation and unfortunately happens more often than you might think it does. If you find yourself in this situation, even if you are a tenant,  give us a call and if we believe that there is a case, we will help you fight every step of the way.

Here’s an example of a case that we were involved with which has resulted not only in a better immediate outcome for our client but a long-term billboard option with significant upside.

In this case, our client was not the property owner but a long-term tenant who leased the property in part to secure the billboard signage affixed to the property. As such, it was the government’s position that because they were a tenant they were not due any compensation and were required to take down their billboards and vacate the premises.   

Commercial tenants own their own businesses but not the property that their business operates from. Like many businesses in California, and across the US, they have limited property rights. However, in this case, we felt that:

  • Not only were their rights being inappropriately impaired,
  • The move and removal of their billboards would significantly impact their business, and
  • We felt compelled to argue their case directly with the government

Initially, the government offered our client extended use of the property for six months rent free.  However, this did not seem equitable considering the potential future revenue loss so we removed the billboards and went to court.  In the second round, the government offered $500k compensation, a good start, but would not pay our clients the value of their signs. We persisted and eventually our client was offered $3 million, which was less than half the value of the lost high profile billboards.

Further negotiation led to a much better resolution that was actually a win-win for both parties, which we believe is the best resolution.  Our client received a 50-year lease for 4 high profile billboards next to the I-10 freeway, highly prized signage including two digital signs.  In return, our client donated the shortfall that the government needed to purchase land for a park in East Los Angeles.

Persistence pays off. This case lasted seven years from start to finish.  We are always very upfront with our clients. If we feel strongly that you have a good case and have been treated unfairly, we will do everything in our power to get the results you deserve. If you have a legal issue and aren’t sure where to turn, come in and talk to us. We will give you a fair assessment of your case and advise you if legal action is in your best interest. If you would like to talk to us, just hit reply to schedule a Get Acquainted Call.