Many property owners seek our counsel on whether to pursue an easement or an assignment. First, not all lease buyout companies will agree to an assignment. So if you have accepted an offer from a company that only offers an easement product, then an assignment of lease(s) will not be an option. Second, you should factor your taxable rate into the consideration of whether to pursue an easement or an assignment (see previous tax discussion). Third, if you are a real property investor and you want to pursue a 1031 exchange with the proceeds from the sale of a real property interest, then you will likely elect to pursue selling an easement underlying the cell site(s) on your property. The assignment and easement documents are structured similarly and both are recorded on the title record to the property; however, an easement creates an interest in the underlying real property, whereas an assignment of rents is only secured by the rents from the lease. Most lease buyout companies pursue an easement because it is an actual interest in the real property, whereas an assignment of rents is only an interest in the lease. While both documents are legally binding, an easement interest is perceived as being easier to enforce with both the property owner and the wireless carrier – as there is statutory and well settled case law surrounding the grantee’s rights and the enforcement of an easement interest.
Which form of document used for the sale depends largely on individual factors and the projected use of your property. We work with our clients to carefully consider their near term needs, tax considerations, and the best solution for their circumstances. Each and every lease buyout transaction has its own nuances, which can be driven by the specific use of the property, the land owner’s desires, or both. It is important to carefully weigh and balance the information we provide as it will help you decide how best to proceed. In any event, be sure to speak to your attorney before you sign anything from any of the lease buyout companies, even if you are told that it is not legally binding