For many landowners, leasing land to a telecoms operator seems like an easy way to achieve an income from otherwise under-utilised property. Whether it is a mobile phone mast on the roof of a building or in the corner of a field, telecoms leases seem like a lucrative arrangement. But are they always a good idea?
The telecoms sector benefits from very strong statutory protection. The Electronic Communications Code was introduced by the Digital Economy Act 2017 and was inserted into Schedule 3A of the Communications Act 2003. It replaced an earlier code that had been in force, with some minor alterations, for 30 years.
The Code governs the relationship between telecoms providers and landowners and what follows is a very basic summary of its main provisions.
When will the Code apply?
Suppose you own some land, and you are proposing to grant a lease or agreement to a telecoms company in relation to that land. Broadly speaking, the Code will apply if:
- The telecoms company is an OFCOM-registered provider (described in this article as 'Code operators') of communications services. You can find the full list of Code operators here: https://www.ofcom.org.uk/phones-telecoms-and-internet/information-for-industry/policy/electronic-comm-code/register-of-persons-with-powers-under-the-electronic-communications-code;
- The agreement you are going to enter into is in writing;
- The agreement has the primary purpose of granting one or more of the rights listed in the Code. These include installing and keeping communications apparatus on land; repairing, altering, upgrading and operating the apparatus; connecting to a power supply; obstructing rights of access and so on.
It is not possible to agree to exclude the operation of the Code.
What are the effects of the Code?
Where the Code applies to an agreement, the Code operator will have some powerful rights.
Firstly, and perhaps most importantly, they will have the right not to be evicted unless certain conditions apply and only after the operation by the landowner of a lengthy and potentially expensive statutory procedure. Code agreements will continue to run after the expiry of any contractual term until terminated by the court.
Secondly, Code operators may assign Code agreements to other Code operators without requiring the landowner's consent. Although the landowner can insist that the assignor provides a guarantee, it is not possible for a landowner to object to or impose conditions on an assignment between Code operators.
A Code operator may share or upgrade the apparatus with other Code operators without consent or conditions if, broadly stated, they have no more than a minimal adverse impact on the equipment's appearance, and no additional burden is imposed on the landowner.
Thirdly, the payment that the Code operator must make to the landowner for their use of the land is restricted by the Code, which requires the rent to be valued on certain assumptions. For example, any value attributable to the use of the land as a telecoms site is to be ignored.
Acquisition of Code rights
If you are thinking that these powers seem harsh on landowners, that is because they are. Whilst landowners would be forgiven for having second thoughts about allowing Code operators on to their land, it may be that they have no choice.
Recent case law confirmed that access to land for the purposes of assessing the land's suitability for telecoms equipment is implicitly included in the list of rights that Code operators enjoy. If a Code operator concludes that your land is suitable for their mast or other equipment, but you don't want to let it to them, the Code operator can apply to the court to compel you to grant a Code agreement.
Such compulsory agreements can be acquired very quickly on an interim basis before a more long-term agreement is put into place.
The court can order the Code agreement to be imposed if:
- The prejudice caused to the landowner can be adequately compensated by money.
- The public benefit likely to result from the order outweighs the prejudice to the landowner. In considering this, the court must have regard to the public interest in having a choice of high quality electronic communications services.
- The landowner has not shown that it intends to redevelop the land or neighbouring land.
The Code has made telecoms leases a less attractive proposition for landowners in a number of ways, and if the Code operator has identified land as suitable for a telecoms site, it may be difficult to keep them at bay.
But if you are thinking of granting a telecoms lease, or resisting a Code operator's attempt to get onto or stay on your land, there are strategies that can be adopted. Engaging specialist legal and surveying advisors will be essential.