Friday, August 14, 2009

Cell Tower Lease Buyouts- Beware of Hidden Closing Costs

At Cell Tower Attorney, we have assisted many landowners throughout the country in connection with cell tower lease buyouts. In light of the economic downturn over the past year, there are currently only a handful of companies actively buying cell tower leases. Those companies that are purchasing leases are fully aware of the lack of competition in the industry and therefore, are offering lower purchase prices than a year or so ago and are much more restrictive on terms and conditions of their standard purchase agreements. For unknowing landowners who have little or no experience with such a transaction, they may mistakenly believe that such tactics are “industry standard”.

For example, we have seen multiple instances in which landowners have been charged with various closing costs such as recording or conveyance taxes, title search, and escrow fees associated with the sale of their cell tower lease. Instead of receiving the actual purchase price for the lease, the landowner receives as much as $10,000 less than this amount. In every case, the term sheet that signed by the landowner did not disclose such fees and the landowner was only made aware of the closing costs months later and just prior to closing. Because landowners are obviously anxious to close on the transaction and do not want to start the process over with a new buyer, they simply agree to the closing costs.

As a matter of good faith, we have demanded that the lease buyout companies disclose any closing costs that are the landowner’s responsibility at the beginning of the lease buyout process. Despite our demands, we still frequently review executed term sheets which are silent regarding this issue.

If you are a landowner in the process of selling your cell tower lease, you should make sure that the term sheet you sign discloses all business terms and conditions as well as clearly describes any and all closing costs and the party that is responsible for such costs. If you are considering selling your cell tower lease, please feel free to contact us. At Cell Tower Attorney, we can review the cell tower lease buyout term sheet and make sure that there are no hidden costs or other terms and conditions. In addition, we can assist you in negotiating and drafting a cell tower lease buyout agreement that protects you and your property while maximizing the sale price for the cell tower lease.

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