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Advertising boards: a warning

15 March 2006

If you own property in a prominent location, renting out space for advertising boards or hoardings can be a good way to generate extra income.

But check the small print first to make sure you aren’t trapped with a poor bargain and no way out warns one of our commercial property solicitors.

Possession and maintenance

So what should you look for? The agreement should only grant the operator a licence to maintain the advertising board/hoarding on the property. The aim is to ensure that he is not granted exclusive possession of any particular part of the site. He might otherwise be able to claim that he has a business tenancy, which could cause problems down the line if you wanted to terminate the agreement.

Some of the terms will depend on your longer-term plans. For example, if you want to have the option of redeveloping or selling the property, then you need to be able to end the agreement at reasonably short notice.

Responsibility for maintaining the board or hoarding in good condition should lie with the operator. He should also be liable for all health and safety and public liability issues. You should make sure that he carries proper public liability insurance to back up any indemnity he gives in the agreement.

Value-wise, it is worth checking with a specialist to ensure that the site is not being rented too cheaply. We are happy to recommend a surveyor or valuer with experience in this particular market place who can advise.

Location, location, location

Location can sometimes be an issue. For example, if the property is near a school, ads for certain products or services may be inappropriate. It’s worth considering whether you need to have any control over the content.

If the board or hoarding is to be attached to a building, the operator should be liable for making good any damage caused by the installation or presence of the hoarding. The agreement should also be very clear about exactly what kind of hoarding can be erected. The size, type, permitted locations and method of construction of the hoarding should all be specified as well as any arrangements that need to be put in place for payment of utilities if, say, the hoarding requires an electricity supply because it is lit or contains moving parts.

These are just some of the issues that ensure the arrangement remains a profitable venture rather than turning into an expensive nightmare.

For more information about advertising on your property, please contact our commercial property team.

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Alasdair Garbutt LLB (Hons)
Partner
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Alasdair Garbutt
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