Through our years of handling billboard transactions, we’ve seen our fair share of sale challenges, struggles and delays due to lease errors.
Considering selling your billboards? These are the five mistakes we see most often that bottleneck the due-diligence process or can even end a sale. Addressing these items will help ensure a smooth experience and can save you time, money and energy.
When signing the lease for the property you’re planning on putting your billboard on, be sure the correct property owner is listed. For example, Betty Sue might own the property, but if it’s legally owned under Betty Sue LLC, you must ensure the LLC is listed. Having the incorrect owner listed when they go to pull the title records and other underlying documents can cause serious delays while you have to go through resigning or amending your lease agreement.
From a legal standpoint, recording your memorandum of the lease helps keep your billboard lease agreement safe in the event there is a new property owner as they still have to honor it!
“Personal” property, such as your car or furniture, is always protected during foreclosures, whereas “real” property such as your house or any building, can be claimed by a bank. Clearly outlining your billboard as personal property of your business helps protect your asset in the event the property owner ever defaults.
When defining your leased billboard area and how your company will access the site, you want to be as precise as possible. If you are not specific, a new property owner could force you to move your billboard to a less ideal location or change the route you must take to get to it. Clearly defining your location and access protects your billboard’s ideal placement and overall value!
At this point, you’re probably seeing a trend: The more defined a lease agreement is written, the less problems you’ll run into in the future. The same holds true when defining lease terms and renewal options. A typical lease could be specified as having an initial 20-year term, with renewal options of two 10-year terms with defined rate increases. The more you outline, the more protected your billboard and rental rate agreement will be in the long run!
When entering into a new lease agreement, remember these three tips to further strengthen your contract, and cause less headaches at the time of a sale:
These three steps make your billboards more appealing to potential buyers, help prevent delays in due-diligence and provide a much easier and more efficient sale process!
Whether you’re looking to make the most of your sale or are hoping to expand your billboard business with a loan, Stark Capital Solutions has the expertise and resources you need. Find your solution by contacting us today.