Frank, I ran into this question today from a land owner I am trying to lease out space from. " What happens if you don’t pay me? If one day you stop paying me and you disappear on me. Then what? I have this big metal thing on my land."
I rebuttled with reasurances etc etc. So he said:
“If you’re so sure that you won’t have a problem paying me even if God forbid the sign sits unrented then put a clause in the contract saying that if you don’t pay me for 3 months, the structure becomes mine.”
At that point all I could say was that I’m sure we could figure something out.
What response have you given? I’m sure you’ve run into this before.
First of all, you would never build a sign that would sit empty – that makes no logical sense. Second of all, you have a huge investment in the sign, and you are not about to run off and abandon it. Third, you are offering the guy a guaranteed minimum payment. You can’t insert that type of language into your contract or you can’t get financing.
The problem is that you’ve come off as not “big company” enough. Nobody questions the paperwork of a big company (do you debate the Avis rental contract?). Now you’ve got to get the situation back under control.
There are no guarantees in life. When I pull my car out of the driveway, it could catch fire. Or a bus could hit me. Or a plane could crash on top of me. Life’s got risks. But you have to go with the logical expected result that the car backs up and none of those things happen.
The odds of you walking off and abandoning the sign is zero. If you go bust, the bank will take it back and operate or remove it. Explain that the bank is his protection – if you owned it free and clear he’s right. But you are going to have a loan on it, and that’s the back-up plan.