Lease Provisions


The following are some provisions I have in a particluar lease. Do you see any major problems with any of the provisions:

A. Base Land rent will increase 10% at the end of each 5 year period
B. Lessee will reimburse Lessor with respect to any annual increase in the county, school or city taxes for the premises that can be directly attributed to the construction of the outdoor advertising structure. Lessee will make such payment to the Lessor within fifteen (15) days after receiving written proof of such tax from the Lessor.
C. If the Lessee fails to erect the outdoor advertising structure within twelve (12) months from the date of this lease, then the Lessor will have option of cancelling this lease by providing Lessee thirty (30) day written notice of such intention to cancel the lease.
D. Lessee will not advertise anything of pornographic nature
E. Lessee will not advertise any competitive business with Lessor or tenant occupying the leased property
F. Lessee agrees not to alter any currently existing parking spaces
G. Lessee and lessor will mutually agree on the location of the sign

The clauses seem okay but I am concerned with clause F & G because after the sign is up couldn’t the owner or future owner argue this is taking up parking or show me proof we mutually agreed on the location and force the sign to move or come down.

Please give me your thoughts. Thank you

Until you have the exhibit tying down “G” to a exact location, signed by both parties, you really don’t have a lease. The land owner could always refuse any location you throw out, and the lease is effectively killed. Item F should be a non-issue once you have an accurate exhibit for G – how can the landowner agree to a location without assuring you it fits his criteria for the parking space? I would have a sentence on the exhibit acknowledging that in that location, item F has been satisfied.

It always worries me when the landowner wants to tie down the location with such precision. Be sure and put the word “approximately” in front of all measurements showing where the sign will be. Remember that building the sign is an imperfect science, and it is not uncommon for the sign to be many inches off the target when the reality of drilling the hole, positioning the column and pouring the cement are taking into account. You don’t want the landowner trying to terminate your lease because you are two inches too close to the side property line.

The other provisions look pretty standard.

Thanks Frank:

Is there any general websites were traffic counts can be obtained or must you contact the local municipals to obtain this information? Thanks again

There are two large groups who measure traffic. They are the state department of transportation, and the municipal government of the city or county. Sometimes there are private traffic counts performed as part of traffic strudies for developers and re-zoning cases. Additionally, sometimes the U.S. government can do a traffic count study as part of one of their projects.

I normally start by entering the intersection you are talking about [e.g.: Wilshire at La Brea traffic count] in Google and seeing what pops up. In large cities that put a lot of information on the internet, often the count will immediately be referenced. If there is no success there, I contact both the state department of transportation and the municipal government.