Hidden Challenges in Property Acquisition: Billboards and Foreclosures


At Hamlin | Cody, we understand the complexities of property acquisition. Tax sales and foreclosures can offer attractive opportunities, but factors like existing billboard structures require special attention. This article explores the intricacies of acquiring property with a billboard and emphasizes the importance of due diligence for a smooth transaction.

Billboard Easements 

CA Revenue and Taxation Code §3712(d) states the tax sale deed conveys title to the purchaser free of all encumbrances of any kind existing before the sale, except easements of any kind, including prescriptive, constituting servitudes upon or burdens to the property; water rights, the record title to which is held separately from the title to the property; and restrictions of record.

Imagine acquiring a property at a tax sale, only to discover a prominent billboard structure. While this might initially seem like a value-add, legal ownership of the billboard itself can be a separate issue. If the billboard operator has an easement over the land, that easement will survive the tax sale. This possibility underscores the importance of conducting thorough due diligence before finalizing any property acquisition.

The Power of Due Diligence

Investing in a comprehensive title report before bidding can mean the difference between a strategic acquisition and unforeseen legal entanglements. A title report acts as a legal roadmap, outlining any existing claims or encumbrances on the property, including easements for billboard structures. 

A title report will disclose only items that have been recorded. A buyer is deemed to know what would be learned by inspecting the property and by asking occupants about the basis for their occupancy. Billboard companies generally have their name somewhere on the billboard. Buyers are treated as if they contacted the billboard company and asked about their lease, license, or easement.

Navigating Foreclosure: What Survives the Storm?

Foreclosure auctions, while offering potential bargains, can introduce complexities regarding ownership of assets on the property. While the bank seizes the land, it doesn’t necessarily acquire everything on the land. If the loan is recorded before a lease, the sale terminates the lease. If the loan is recorded after the lease, the lease survives. Often, billboard leases are not recorded. At the same time, in California, if the billboard has the name of the operator on it, the lender is charged with the information it would have learned if it had asked the billboard operator about its lease.

The Takeaway: Knowledge is Power

Before bidding on a property with a billboard, conducting thorough due diligence is crucial. Consult with a qualified real estate attorney who can help you understand the legalities of existing leases and easements. At Hamlin | Cody, we help navigate the complexities of property acquisition. We guide you through the process, ensuring you make informed decisions and secure the property you desire, even if it comes with an unexpected billboard.

Contact us today, at 310-216-2165.