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Legal Updates

Telecommunications Code

12 June 2018 #Real Estate #Information Technology


The new telecommunications code came into force in December 2017. The act is an innovative step which is designed to give licensed telecoms operators statutory rights to place, and keep equipment, on private land. The aim is to improve connectivity; however, the code raises several issues which Landowners need to be alive to.

Major Changes – Disadvantages to Landowners

Site Sharing: Telecoms operators will have the right to share sites without the landowner’s consent. (Assume that this means in practice that if Vodaphone have a site. and EE would like to place equipment on that site, they can arrange this themselves without the Landlord being involved).

Assignment: Operators will have the right to assign their leases without landowner consent. It is important to note in relation to site sharing and assignment that these can happen regardless of any written agreement to prevent it.

Upgrades: Operators will have the right to upgrade equipment without landowner consent. Further clarity needed on the nature & extent of the upgrade permitted. (Assume this will become apparent as more sites become operational under the Code and caselaw develops).

Valuations: The valuation basis for telecoms sites will change from an open market basis to a 'no scheme' basis i.e. limit the payment so that it reflects the underlying value of the land. I assume the thinking behind this is that landowners can’t charge disproportionate rents.

Key issues: Disadvantages to Landowners

  1. Rentals: Due to the new valuation basis, rentals for leases under the new Code may well be depressed.

  2. 'Payaways': Arrangements by which the landowner takes a cut of the income generated from operator-to-operator site sharing arrangements will no longer be permitted under the new Code.

Advantages for Landowners

  1. The Code will bring an end to the security of tenure protection, to the operator, by the Landlord and Tenant Act 1954. New telecoms leases will only be afforded protection by the Code and the landowner who will no longer need to exclude the security of tenure provisions provided for by that Act.

  2. What this means in practice is that after the Lease term has expired, the landowner can terminate the agreement. However, they must serve 18 months-notice on the operator citing one of four grounds (including redevelopment and substantial breach of obligations) and must follow a set procedure. If an agreement can’t be reached then an application can be made to the Court.

  3. Landowners can now require removal of apparatus where one of five conditions are met (including where the Code rights have ended or where the apparatus is no longer used in connection with the operator’s network). Again, the landowner is required to serve a notice on the operator to remove the apparatus and make good the land within a reasonable period. Again, if an agreement can’t be reached then an application can be made to the Court.

Conclusion     

The main aim of the Code was to help facilitate the expansion of mobile and broadband networks as intended. However, there is a school of thought that the new Code may in fact have the opposite effect if landowners regard the new agreements to be more of a burden on their land than a benefit.

Clarkslegal, specialist Real Estate lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Real Estate matter please contact Clarkslegal's real estate team by email at realestate@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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Fionnuala Woods

Fionnuala Woods
Solicitor

E: fwoods@clarkslegal.com
T: 0118 960 4662
M: 0778 667 6830

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