Selling your cell tower lease when you have a mortgage on your property is possible, but it involves some additional considerations and steps. Here are the key factors to keep in mind:
- Mortgage Agreement: Review your mortgage agreement carefully. Some mortgage agreements include clauses that require the lender’s consent before you can sell or assign certain property rights, including lease agreements. These clauses are often referred to as “due-on-sale” or “alienation” clauses. Seek legal advice to understand your specific mortgage agreement.
- Lender Consent: If your mortgage agreement contains a due-on-sale clause or similar provision, you will need to obtain your lender’s consent to sell your cell tower lease. Contact your lender to discuss the potential sale and request their consent in writing. Lenders may have their own criteria and processes for granting consent.
- Sale Process: Once you have obtained your lender’s consent (if required), you can proceed with the sale of your cell tower lease. This typically involves finding a buyer interested in purchasing your lease income stream.
- Negotiation and Valuation: Work with professionals experienced in cell tower lease buyouts or transactions to negotiate the terms of the sale and determine the fair market value of your lease income. The value of your lease can depend on factors such as lease duration, rent amount, location, and the creditworthiness of the wireless carrier.
- Due Diligence: The buyer may conduct due diligence to assess the lease’s terms and financial performance. Be prepared to provide relevant lease documents and financial records.
- Closing: Once the terms are agreed upon, the sale can proceed to closing. Legal and financial professionals can assist with the documentation and transfer of rights to the buyer.
- Notify the Cell Tower Company: Notify the cell tower company or wireless carrier about the change in lease ownership and provide any required documentation, such as the buyer’s contact information.
- Mortgage Payments: Continue making your mortgage payments as required by your mortgage agreement. The sale of the cell tower lease income stream does not alter your mortgage obligations.
- Tax Considerations: Consult with tax advisors to understand the tax implications of selling your cell tower lease income, including potential capital gains tax.
It’s important to approach the sale of your cell tower lease with careful consideration of both your mortgage obligations and the terms of the lease agreement. Engaging legal and financial professionals who specialize in these transactions can help ensure a smooth process and protect your interests.
Keep in mind that the specifics of your situation can vary, so it’s advisable to seek legal and financial advice tailored to your unique circumstances. Additionally, maintaining open communication with your lender and the cell tower company throughout the process is essential to ensure compliance with all contractual obligations.
