Most people have at least one mobile telephone these days and understand the frustration caused by a bad or intermittent signal. To provide a signal, however, operators need enough sites for masts and equipment. With the bad publicity over possible health risks and unsightly structures, coupled with the concern that operators’ statutory rights make masts almost impossible to remove, landowners have historically been cautious about letting land for telecoms purposes without ensuring a suitable income.
On 28 December 2017 the new Electronic Communications Code came into force bringing even more favourable terms for telecoms operators. This Code will apply to all new agreements and any terms that are contrary to the Code are unenforceable. In addition, transitional provisions which have altered some of the provisions of the previous Code will apply to existing agreements.
As with the previous Code, rights can be acquired by telecoms operators by entering into an agreement with a landowner or by applying for a court order. Even if a landowner does not want to enter into an agreement (unless a landowner intends to redevelop and would not be able to do so if an order was granted) a court can make an order where it considers that:
- Financial compensation can adequately compensate the prejudice caused to the landowner; and
- The prejudice caused to the landowner is outweighed by the benefit to the public in having access to electronic communications services.
If a court does impose an agreement, any compensation granted to the landowner will be based upon the market value of the land ignoring the value of the telecoms equipment and the Code rights on the land. If the land is a small area without many other potential uses, rents and compensation may be limited.
The aim of the new legislation is to make it easier for telecoms operators to rapidly roll out communications infrastructure (such as 4G networks, superfast broadband and other technology) by providing statutory rights of installation, maintenance and use. Such Code rights can now be conferred on a person who provides infrastructure services for operators as well as on operators themselves. In addition, operators may just upgrade their equipment without the consent of the landowner, they may also share their sites (as long as the changes to the equipment have only minimal adverse impact on its appearance and no additional burden is imposed on the landlord). Landowners may therefore be prevented from being able to receive additional rent for extra equipment and/or additional users.
Landlords should not take too much comfort from the fact that agreements entered into by a tenant will not bind the freeholder as it is likely that any freeholders would just find themselves the subject of a court order if the operator wished to remain on the property at the end of the tenant’s lease. In addition, Code rights are binding whether or not they are registered.
Although landowners and operators may include early termination provisions in agreements, landowners will need to follow the termination procedure set out in the legislation which includes giving at least 18 months’ notice to remove the operator, followed by a separate process to remove the apparatus itself. In addition, notice can only be served if one of a specified number of termination grounds applies.
Even though the security of tenure provisions of the Landlord and Tenant Act 1954 will not apply to telecoms tenancies, operators will continue to have separate statutory continuation rights under the Code.
Landowners may not be able to benefit from an operator’s change of business plans as, although a landowner may require the outgoing operator to guarantee the new operator’s obligations, operators can assign their rights without the consent of the landowner.
Landowners should therefore think carefully about their land management strategy and any development plans as, ultimately, the increased installation of transmitting equipment is inevitable to keep us all connected.