Can Telecoms Companies Take From You A Lease On Their Terms?

The Government has long been keen to improve internet access quality and mobile phone connectivity across the whole country. The first Electronic Communications Code was brought into being in 1984, creating a new set of rights for telecoms companies that are designed to facilitate the installation and maintenance of electronic communications networks. A new Code then came into force on 28th December 2017 (flesh was put on its bones by the 2019 Code and the 2020 Code introduced greater protection for broadband, mobile, Pay TV and landline users).

Digital Economy Act 2017

The Code gives telecoms companies (‘operators’) rights to install and maintain apparatus in, over and under land. Its provisions strongly advantage the operators as opposed to the landowners. Operators rights arise by agreement with the landowner but if a landowner is unwilling to enter into an agreement, the operator can apply to Court for one to be imposed. The terms will provide payment as consideration, but at a valuation on a ‘no scheme basis’, which does not take into account the proposed use or scarcity of sites.

So does this mean operators have it all their own way? Not quite.

Case law

The landowner can resist the operator’s call for an agreement to site its equipment on the landowners property, if the landowner intends to redevelop its property and that could not reasonably be done if the agreement is imposed. But in a 2019 case (EE Limited & Hutchison 3G UK Limited v Sir James HE Chichester & Others [2019]), a landowner failed to block a Code Agreement because the landowner could not show a “real” intention to carry out the works. The test is the same as for a landlord refusing to grant a renewal of a lease under Ground F of Section 30(1) of the Landlord & Tenant Act 1954, i.e. the landowner must have a settled and implementable intention of carrying out the redevelopment.

However, in the recent case of Cornerstone Telecommunications Infrastructure Ltd v Ashloch Ltd & AP Wireless II (UK) Ltd [2021] EWCA Civ 90, the Court of Appeal ruled that where a telecoms operator has the right to renew a pre-28th December 2017 lease under the Landlord & Tenant Act 1954, the provision of that Act will apply to determine the terms of the new lease, not the Code Rights terms. So scarcity of sites will be taken into account in valuing the rent payable.

So if you are approached by a telecoms operator calling for acceptance of its requirements for a lease of or agreement to site its equipment on your property, take legal advice before agreeing anything.

How can Nelsons help?

If you have any questions in relation to the topics discussed in this article, please contact either Martin Jinks (Partner, Solicitor & Notary Public) or Sarah Burns (Associate & Solicitor) in our expert Commercial Property team on 0800 024 1976 or via our online form.

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