At Hamlin | Cody, we prioritize clarity in legal documents. Recently, we reviewed two billboard leases that highlight the importance of precise lease terms, particularly regarding the ownership of billboards at the end of the lease. Our experienced California billboard attorneys help clients navigate these complexities to protect their rights.
Typical Billboard Lease Arrangements
In most cases, the billboard company owns the structure and the lease expressly says so. The billboard company handles the construction, maintenance, and removal of the billboard at the lease’s termination. This standard arrangement allows the company to control its investment and avoid disputes with the landowner. However, deviations from this standard can and do occur, as seen in the two leases we recently reviewed.
Unusual Ownership Provisions
Lease 1: Ownership Transfer to Lessor
One lease included a provision that stated the property owner (lessor) would own the billboard at the lease’s end. This clause is unusual and deviates from the standard expectation that the billboard company retains ownership.
Lease 2: Contested Ownership with Third-Party
The second lease was more complex. It included a provision where the lessor appointed the billboard operator as its agent to challenge another company’s ownership claim. If the challenge succeeded, the lessor would own the billboard. We found, as drafted, this arrangement created the potential for legal disputes between several parties..
The Importance of Clarity in Lease Agreements
Both the leases also contained the standard clause stating that the billboard operator owns the billboards. The conflicting provisions created a contradiction in terms, confusion, ambiguity and legal issues to be resolved.
Avoiding Ambiguities
Ambiguous or contradictory terms in lease agreements often lead to disputes, litigation, and significant costs for both parties. All of that can be minimized by:
- Clearly Defining Ownership Terms: Ensure all clauses regarding ownership are consistent and unambiguous.
- Reviewing and Reconciling Provisions: Review leases thoroughly and repeatedly to identify and resolve conflicting provisions.
- Seeking Legal Guidance: Engage experienced attorneys to draft and review lease agreements for clarity and enforceability.
Why Clear Lease Terms Matter
These examples underscore the necessity for clear and unambiguous lease terms. Both lessors and lessees must be able to read the lease and understand what it says. It takes several readings, patience and a keen eye to catch even inadvertent errors. Who owns the billboard and the permits to build and use the billboard is just an example of the many terms that need to be clearly spelled out in a lease. Conflicting language and absent terms create ambiguities that lead to uncertainty and confusion that can result in unanticipated outcomes. In the best case, the parties can work though the issues and have a meeting of the minds. But in others, legal challenges may be the only way forward.
How Hamlin | Cody Can Help
We’ve read, written, revised and interpreted alot of leases! Our skill and keen eye translate to better leases with clear and comprehensive terms and conditions that everyone will understand. At Hamlin | Cody, our extensive experience drafting and reviewing lease agreements sets us apart. Whether you are a lessor or lessee, a billboard operator or a landowner, our experienced attorneys can help you navigate lease issues, negotiations and written agreements that protect your interests and minimize future uncertainties, challenges, and unanticipated occurrences.
Contact us today for assistance with your billboard lease and let’s get it right the first time!.