Don't become victim of bad deal on telecoms rents

The aim of this was to make it easier for network operators to invest in network infrastructure such as masts and exchanges located on both public and private land.

The code applies to all Ofcom licensed telecommunications operators and to all agreements between licensed operators and the site providers. Existing agreements are excluded.

The code gives rights to operators to install electronic communications equipment and to access the site to maintain, repair and inspect the equipment. The code also allows operators to:

• Assign an agreement without the consent of the site provider,

• Upgrade the apparatus

• Share the apparatus with other operators

The code also defines the payment for the agreement as the market value of the site, servicing and access with both parties willing to enter the agreement and with the intended use of the site to be disregarded.

It should further be taken into account that more than one site be available to the operator and that the newly conferred rights to upgrade, share and assign be disregarded.

The result is that operators approaching land owners to renew existing leases coming to an end are offering rents at a fraction of those in the original lease.

It therefore makes sense to resist the renewal. However, should the parties fail to reach an agreement the court may impose an agreement specifying terms covering payment, length of term, termination and repositioning or ‘lift and shift’ arrangements.

A voluntary code of practice accompanies the ECC which states that both parties should make every effort to reach a voluntary agreement before approaching the court.

We must wait and see what approach the courts will take, but in the meantime existing rents are continuing to hold firm, and site owners should think very carefully before accepting the significantly reduced terms that providers may offer on lease renewal.

Richard Corbet is an associate land agent with Balfours