OOH Today Legal Q&A
By: Andy McDonald of McDonald Law, PLLC
andy@mcdonaldlawpllc.com
https://www.mcdonaldlawpllc.com/
Navigating the Complex Landscape of OOH (Commercial) Lease Holdover Tenant’s Rights Across States
Out-of-home (OOH) / billboard lease agreements are the backbone of countless OOH operations, providing a framework for the relationship between landlords and tenants. However, when a lease term expires and an OOH company continues to occupy the premises without a renewed agreement, a unique set of legal considerations comes into play. This topic is also one of the areas where I’ve done the most research as it’s often encountered where a landlord will argue a lease beyond the stated term is no longer valid and attempt to use that argument to strongarm an OOH company into an unreasonable rent demand. State laws regarding commercial lease holdover tenant’s rights vary, creating a complex landscape that both landlords and OOH companies must navigate. In this article, I’ll explore the diverse approaches taken by different states in addressing the rights and responsibilities of commercial lease holdover tenants.
A billboard lease holdover occurs when a tenant remains in possession of the leased premises after the expiration of the lease term without the landlord’s explicit approval. In such cases, state laws dictate the rights and obligations of both parties until a new lease agreement is established or the tenant vacates the premises. With that said, state laws will oftentimes look to the terms of the original lease agreement to determine if the parties contemplated successive terms, holdover rent (which is oftentimes a multiple of the original lease’s rent), and the timing of any notices to terminate the lease.
States differ in their requirements for landlords to provide notice to holdover tenants. Some states mandate a specific period of notice before initiating eviction proceedings, while others may allow immediate eviction without notice. It’s important to not only check the notice provisions within your lease but also research your state’s termination notice requirements. Many states will defer to the provisions of the lease, even where expired, even where such provisions differ from a state’s laws.
The calculation of rent during the holdover period is another area of divergence. Some states may allow landlords to charge a significantly higher rent for holdover tenants, while others may limit the increase to a predetermined percentage. As above, it’s important to research your particular state’s laws, but if holdover rent is discussed in the lease, then the majority of states that I’ve researched will allow the agreement of the parties to control.
States have varying procedures for evicting holdover tenants. Some may require landlords to file a formal eviction lawsuit, while others allow for a swifter process through summary eviction proceedings. If eviction proceedings are threatened by a landlord, then it’s quite obviously important to have a thorough understanding of the controlling state’s laws regarding holdover by a tenant under a commercial lease. Oftentimes, having such understanding will allow you to kindly educate a landlord and / or its attorney which may lead to more reasonable lease extension negotiations.
While the treatment of holdover tenancies varies from state to state, for a holdover tenant where the original lease was for a term of years the majority of jurisdictions in which I’ve conducted research will treat the holdover tenancy as a year-to-year lease. The main caveat to such treatment is that the landlord has not provided notice to terminate. Additional proof of such a year-to-year lease is provided when a landlord has accepted and cashed rental payment made pursuant to the terms of the expired lease. Most states will view such actions as performance by the parties under the terms of the original lease, implying their agreement to extend the term.
Navigating the diverse state laws regarding commercial lease holdover tenant’s rights requires a nuanced understanding of each jurisdiction’s laws. Both landlords and tenants must be aware of their respective rights and obligations which should help avoid legal complications and unnecessary fees and expenses. As the OOH real estate landscape continues to evolve, staying informed about these legal intricacies becomes crucial for fostering fair and equitable relationships between landlords and tenants. Seeking professional legal advice tailored to the specific jurisdiction is essential to ensure compliance and mitigate potential disputes in the complex realm of OOH leasing.
As an aside, I wanted to thank those old friends and, now, new friends who reached out following my first article. I look forward to hearing from more readers, making new friends, as well as helping OOH companies better navigate the legal issues they face.
About the Author: Andy McDonald works for his law firm, McDonald Law, PLLC. He is an AV Preeminent Martindale-Hubbell Peer-Review rated attorney and has practiced law and dealt with billboard issues since he first became licensed in 1999. Andy is licensed in Mississippi, New Mexico, Oklahoma, and Texas.
Disclaimer: This article is provided for informational purposes only and does not constitute legal advice or create an attorney-client relationship. While every effort has been made to ensure the accuracy of the information presented, it should not be construed as legal advice or opinion. Readers should not act upon this information without seeking professional counsel. The content of this article may be subject to change, and the accuracy of the information is not guaranteed. Laws and regulations vary by jurisdiction, and the application and impact of laws can differ based on individual circumstances. Readers are advised to consult with a qualified legal professional regarding their particular situation and any specific legal questions they may have. The author and publisher of this article expressly disclaim any and all liability to any person or entity concerning the consequences of anything done or omitted to be done directly or indirectly in reliance upon the information provided. No reader should act or refrain from acting on the basis of any content included in this article without seeking appropriate legal advice on the particular facts and circumstances at issue. The information contained in this article is not a substitute for obtaining legal advice from a qualified attorney licensed in the appropriate jurisdiction. By reading this article, the reader acknowledges that they are not forming an attorney-client relationship with the author or the publisher. No reader should consider this article as a substitute for legal representation, and they should not rely on the information provided herein without seeking professional counsel.
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