Richard Rothfelder on coronavirus legal implications and 5 mistakes in out of home leases.

Today's podcast guest Richard Rothfelder of Rothfelder Falick reviews the impact of the coronavirus on out of home contracts and 5 mistakes out of home companies make when they write out of home leases. On the impact of coronavirus on out of home contracts Richard Rothfelder, Rothfelder and Falick Coronavirus has generated a lot of issues in the billboard industry as well as…commerce in general.  You are going to find a lot of issues arising with performance of contractual obligations, delivery of services or goods, especially from overseas and implementation of force majeure contracts.  Provisions in leases or contracts for excusing performance under force majeure or acts of God in this case the coronavirus….you can certainly situations where the coronavirus can be offered as a reason not to perform…readers would be well advised to check their force majeure provisions, their insurance coverage issues, and finally they should be very conscious of situations where employees will want to work remotely and avoid contamination…the employer is going to have to be making reasonable determinations as how he can best protect employees and operate his business. What are 5 mistakes out of home companies make when they write locations leases to put up a billboard? (1) The biggest mistake is not recording the lease or at least not recording a memorandum of the lease with the real property records which in turn provides the world with notice that the billboard company has effectively encumbered that ground with his leasehold interest... (2) The second mistake that out of home companies make...is to not have a renewal provision…Typically the billboard company might have a primary term of 5-10-20 years, the longer the better… But they also like to have a provision that gives them the right to renew, hopefully on similar terms after the primary term (3) A third mistake...is a situation I’ve seen in many billboard leases where the companies attempt to probably overreach including in their leases a unilateral and perpetual right to renew…I’ve seen a lot of leases which give the billboard company the sole right to renew the lease time after time on the original provisions by simply giving notice some 30-60-90 days before the primary term that they are going to renew.  It doesn’t give the landlord by contrast any opportunity to reject that renewal and instead the billboard companies have the extreme bargaining advantage…to effectively renew forever…Now that has been subject to a lot of litigation.  I’ve handled a lot of it myself and there’s cases going both ways. (4) The next mistake I see is usually…the operator reserving his right to remove the sign upon the expiration or termination of the lease.  But for some reason the old forms included a provision which went on to say that the parties agree that the billboard is the personal property of the lessee and can be removed on the expiration or termination of the lease.  The characterization of the billboard as personalty or realty is unnecessary to reserve the right to remove the sign and it certainly creates a lot of confusion for other purposes like condemnation and taxation. (5) The last provision that I criticize is the commencement versus effective date of the lease.  More specifically I would include in the ground lease that it is effect upon execution of the authorized parties…You want to have the landlord bound, but you don’t want to be obligated to start paying your ground rent until the governmental permits have been issued and the sign has been constructed.  So have two separate provisions which recognize those two different times.  Have a nominal exchange of consideration upon the execution of the agreement…say $100-500.  But once again, don’t obligate yourself to make those rental payments until you’ve received the governmental permits and commenced operations. If you develop out of home advertising sites you need Billboard Insider’s Guide to Lea...