Billboard on Tax Foreclosed Property

7 Replies

I am looking for some insight as to what the possible scenarios are in this case. 

I am purchasing a commercial property directly from the county who is in the process of foreclosing on the property for extremely delinquent taxes. There is a billboard situated on the parcel. From doing some research, I found the land under the billboard is leased by the advertising company Lamar and the billboard itself was erected by Lamar. The county states I will receive the parcel "free of any liens or encumbrances". I can only assume this means the lease between Lamar and the current property owner will be cancelled through the tax foreclosure process. What I am curious about is the actual billboard structure itself. If the lease is cancelled through the tax foreclosure, meaning Lamar no longer has the right to the land under the billboard, will I own the billboard outright or is it still Lamar's asset and they have the right to take it down?

Seems like a tricky subject and would appreciate any advice.

Thanks,
Bryce

So many factors.... this is going to require the assistance of an attorney to answer. I would mean toward Lamar still owning the structure, and possible still subject to the lease. That said, is there a reason you want to get out of the lease? I personally would much prefer to collect my land lease payment and not mess with running a billboard myself. You plan on climbing up there and hanging those giant vinyls? Lol

Originally posted by @Shane H.:

So many factors.... this is going to require the assistance of an attorney to answer. I would mean toward Lamar still owning the structure, and possible still subject to the lease. That said, is there a reason you want to get out of the lease? I personally would much prefer to collect my land lease payment and not mess with running a billboard myself. You plan on climbing up there and hanging those giant vinyls? Lol

It would be more work, but it sounds better than getting the standard percentage for billboard leases. (15-20%)



Originally posted by @Justin Vermuth :

The billboard would remain the property of Lamar unless you terminated and they failed to take it.


So the lease is not automatically terminated even though the contract with the county states it's "free and clear of any and all encumbrances"?

to each their own, but real estate for me is intended to be passive income. When Lamar owns the sign it's 100 percent passive, and they assume the liability. Good luck either way. Everyone doesn't have to be as lazy as me. Haha

I can only speak for the state of FL but generally the lease would be terminated. You are left with a tenancy at will where if you continue to accept payments the billboard stays. There should be some notice provisions in your state if wanted it removed where they would have the opportunity to recover their property. Also there are sometimes state or local operating permits that would be in the name of Lamar further complicating things if you were trying to take ownership of the board. Best course is probably working out a new lease w them.

@Bryce Kuhar

I’m not so sure the lease gets cancelled in a tax sale.  You also haven’t said what state this is in....no one knows the answer unless they are versed in that state’s laws concerning tax sales.  I would assume a company like Lamar would have their lease recorded also.

The real question is what do you want to do with the property after you own the property?   

     Seems to me you have a tenant in place that probably would be happy to switch where the check is mailed monthly so they can continue to make money and you can start collecting money from day one. 

      Unless you are somehow also in the billboard business and are trying to gain ownership of this particular billboard, I see this is almost like a foreclosure on a rental property where you want to just keep collecting rent checks from the person.  The tenant typically doesn’t care who the owner is l, they just don’t want to be evicted. I’m assuming a large business would be willing to do business with whoever the new land owner is.