[fiesty]

Hi,
I live in Wisconsin and I have been renting 2 back to back billboards of which one is subleased. The party did not renew the 5 year lease and the subleasee gave notice they were not renewing their lease. The problem is that the lease ended June 1st and they have not removed their signs. I own the large post and frame and lighting and lease the space to them. They own the sign which I know that they paid around $10,000 for each metal sign. It would cost me over a thousand dollars to remove their signs, need a sky track and labor team, and further removing the signs would cause some damage to sign and I know they would try to recoup damages. Removing signs is not a good option. Since the lease ended and they did not remove their property is it considered abandoned and now I own the signs? Dould I put a sign over their signs and rent this space? Are the signs now my property? Or did the lease convert to a month to month and they each owe me June, July, August, & September's rent? Previously the lease called for 1 yearly payment, but the leasee split it up over the year. So would I just take the yearly amount and divide into 12? I would charge them the same rate but break it down to a monthly amount and send bill and notify that on month to month lease until removed? Or now that they are on month to month do they have to give 30 days notice when removing signs? All they said is they were not renewing the lease for another 5 year term. Please advise. Thanks!

[ScottGem]

This is not a tenant/landlord situation. This is a commercial contract. I don't really think real estate laws apply here.

What's missing in your note is what the contract/lease says. Does it say anything about what happens when the contract term expires? Does it say anything about removal of the sign?

Did you send them a lease renewal? Did they react to it? Did they say they weren't going renew?

The way I would have handled this was to send them a renewal contract 60 days prior to the expiration. If I had not heard from them within 30 days, I would have followed up with a letter stating if they do not want to renew, then they need to remove their sign prior to the expiration date. If they did not do so, then you would have been within your right to lease the space to another advertiser to put up their own sign.

Now, I'm not sure what your options are since you haven't exercised due diligence. I would need to know more about the situation.

[fiesty]

Thanks Scott!
After reading your comment I searched the Wisconsin laws for rentals and found a nonresidential lease clause that says that if a tenant holds over after expiration of lease the landlord may elect to hold the tenant on a year-to-year basis. 704.25 so by not removing sign they created a periodic tenancy because the original lease was more than a year. Accordingly, they would owe for a year.
Scott do you have any comments on this?? Thanks!

[ScottGem]

What does YOUR lease say? Also I asked you for several pieces of info in my response which you didn't supply. Did you offer them a lease renewal? Again, I'm not sure that this is a tenant/landlord issue. While you are leasing space, its not for occupancy. Its not real estate that you are leasing. Basically you have an advertising contract. I think this is more like a contract that an advertiser would enter into with a newspaper or magazine then a rental agreement.

[fiesty]

Hi Scott,
The lease states that they have a 5 year extension that begins 6/1/2006. The party sent notice that they did not want to rent anymore. They sent a certified letter but they did not remove their property. There is no clause that states that they can give notice to end, it just states that there is a 5 year extension for the sublease.
I do not consider them like a newspaper or magazine. I do not consider this apples for apples as the newspaper or magazine places an ad on the newspapers property and none of the advertisers physical property or structure or land is used. This is a lease of land/structure.
I actually lease the property, i.e. structure. Let me ask you this question if a cell phone company leased my tower and my structure and put up their satellite equipment would you consider them like a newspaper or magazine ad? I am leasing them my pole and my frame and my piece of land. They put up their own structure wouldn't their metal $10,000 sign be equivalent to the satellite equipment that the cell phone company put on my pole? I consider their sign my tenant. Their sign is occupying my property. If they placed this sign in a storage shed and leased the space and gave notice that they did not want to lease anymore but left the sign in the shed so no one else could rent it wouldn't this be a real estate law? What if a farmer rented my post and put up a windmill? If he did not remove his windmill would this be considered a real estate transaction?

[ScottGem]

My feeling is this is not real estate law. This is a commercial contract for services. Even though that contract specifies a physical placement. I would check this with your accountant about claiming this as rental real estate.

Now lets look at the lease. Without seeing the exact wording, if it specifies an extension of the lease for 5 years, that has to be an option or an amendment. If it was in the original lease then its an option. The lease would need to specify who's option. If it doesn't then both parties would have to agree. Since they informed you they would not be exercising the option, the lease was terminated on 6/1.

Now we come to the sign. Does the lease say anything about removal? If it doesn't, then the property could be considered abandoned and you could remove it. You could possibly, sue them for the cost of removal. You could send them a letter giving them a time frame in which they have to remove the sign otherwise you will remove it and bill them. I would highly recommend consulting with your attorney before doing that.

In the future, you need to make your leases/contracts more detailed and cover all aspects of the deal.

[fiesty]

Thanks Scott,
I greatly appreciate your time and your thoughts. The lease was drafted by my attorney so perhaps I need a new attorney.
In regards to taxes I believe that the accountant is doing this correctly. The state requires me to pay for a land use permit. The township and county makes me pay for a building permit when a sign is taken down and a new sign goes up. They consider this land use and have land use restrictions and administrative codes that I must comply to. They consider this a structure. My lease gives a legal description of the land that is rented. Who over owns the sign pays a sign company to make the sign and they pay a sign company to erect the sign.
I am not an advertising agency. I do not sell advertising space. I only lease my land. I lease my land and the leasee puts their property on my land. They contact a sign agency and they design their own sign and they own their physical sign. Most sign companies own the sign and put a vinyl over the sign and change the face monthly, this type of sign is temporary, and disposable. This is not that kind of sign. I do not own the sign.
What do you think of 704.25(2)? This is not a residential lease. I cannot get a new tenant until the old tenant is evacuated. This lease was for more than a year. The premises are leased for other than private residential purposes and the tenant holds over after expiration of the lease. This would allow me to elct to hold the tenant on a year-to-year basis.
What do you think? I thought I would ask your opinion before I search for new attorney.
Thanks

[excon]

Hello fiesty (aptly named):

So, if you had an attorney draw up your contract, it would seem that he would have these answers. Before you seek a new attorney, why don't you ask the one who was supposed to be looking out for your interests?

Look, I love your arguments. I don't think real estate law is where you'll find relief. But, I would love to hear what your lawyer says.

You should know, that if you sue (and it sounds like that is where this is going), it doesn't matter how YOU interpret the contract, or how the other guy interprets the contract, or how Scott or I interpret the contract. Once the facts are known, the JUDGE will determine what kind of contract it is.

However, one question should clear that up (at least in my mind). You said that you own the pole. Who owns the land that the pole is stuck into? If it's you, then this might be a real estate deal. If it's not you, then this is probably a commercial contract.

That's my take. But, what do I know? I'm a felon, for crying out loud.

excon

[ScottGem]

I'm not an attorney (though I love lawyer shows) ;) Seriously, I have done some study of the law, but I'm not really on firm ground here. I have asked some other volunteers who's opinions I trust to take a gander at this thread.

But, I'm really at a loss here because I don't see the lease you have. I don't know exactly what it says, so its hard to judge. I do feel, though, that an extension clause should have some additional language specifying how the extension is put into effect. I don't understand why one would include an extension clause if it was mandatory. But excon has a very good point, why aren't you asking your attorney these questions? He drew up the document, he should be explaining it. It may be that he put in the correct language and you just aren't giving us the full story.

As for 704.25, I'm just not sure here. This is clearly not a tenant/landlord situation, In my opinion. I do know that most billboards are managed by advertising companies. If this was drawn up as a rental, maybe it was done that way for tax purposes. I really think you need some specific explanations from your attorney and accountant, and then get a second opinion to back them up. Because, if you have to go to court, then you better be absolutely sure what you have been doing is on the up and up.

[fiesty]

Thanks so much,
I haven't called my attorney as I like to think things over before contacting her so that I minimize what I say as she is super busy and the more concise I am the more quick she is to answer and if it is not urgent it may take a while so that is why I started looking on internet for an answer first and if I say it is urgent and she drops everything to cater to me she is super expensive

[fiesty]

Hi again, I'm back, I had to leave quickly to let my 165# dog out.
To answer some questions, yes I do own the land on which the pole is located and the people who lease the land signed they are responsible for any injuries on the land or damages. In my opinion I have damages as if they don't pay for this time and I can't rent it because they haven't removed there property I have suffered damages, i.e. loss of income. In regards to excon it is also my opinion that many excons are smarter than the average person and are more knowledgeable than most attorneys.
I don't see this going to court if I write a smart convincing letter I believe the party will pay. They just won't be happy with me, but if I cite a statute and they verify it they will pay. However, I haven't convinced you yet. So I need to work harder.
Thanks again!

[excon]

Hello again, fiesty:

Yup, lawyers charge you to ask them how they're feeling?

However, time is awasting... Right now, your sign is NOT an asset. It's a liability that is costing you money every minute it's not rented. IF you're going to spend X dollars on your attorney, then you're going to spend it anyway, and every day you wait costs you money.

Seems to me, you could relate your problem to her in a couple of minutes. I hope she's worth what you think she is. Let us know.

excon

[ScottGem]

I don't see this going to court if I write a smart convincing letter I believe the party will pay. They just won't be happy with me, but if I cite a statute and they verify it they will pay. However, I haven't convinced you yet. So I need to work harder.
Thanks again!

Citing statues is all well and good, IF they clearly apply. Writing letters should be your attorney's job.

Clearly, you have suffered a loss, my question is whether the loss is of your own making or theirs. They informed you, in writing, they they were not going to exercise the extension. Generally, any improvements made to rental property becomes the property of the owner. Unless the lease stipulated that they were responsible for restoring the property to original condition, they may be off the hook.

What I think you should have done is, as soon as you received the letter of non-renewal, you should have immediately written back that you expect them to remove the sign on or before the expiration date of the lease. That, if they don't remove it, then you will have it removed and bill them for the costs as well as any loss of rental while you have it removed.

But you didn't do that. And In my opinion, your failure to do that may have caused you to forfeit your claim to damages. I really think you have a very weak case at best. So you need your attorney or an attorney to advise you.

But you also need to take action immediately to get the sign remopved and the billboard ready for a new advertiser.

[fiesty]

Hi excon,
I am confident that everything is on the up and up. My accountant is the most ethical person I know. He teaches accounting at a prestigious private college. He is a great role model and does everything by the book. Black and white no gray. He would never do anything that would jeopardize me or him.
My attorney is another story she is in it for the money. She likes to let the parking meter run. I found out that I do better when I solve things for myself.
My plan is to find the right law, write a letter and ask her to review and OK before I send out. She will do this by email quickly for free when she eats her lunch as I've paid her many, many thousands already. If she has to transcript or have secretary type or she has to research then I have to pay big bucks. She will write a comment if I am wrong. So I am going to try my best to figure this out. Otherwise she will charge way more than what I make in a year on the sign. It is not financially feasible to contact her at this time. I just have to keep plugging away until I get it correct.
You are helping tremendously.
Thanks again!