Judgement sets out guidelines for mast rentals

05/12/2019

The first judgement in a case relating to new leases and the renewal of agreements for rentals for telecoms masts has finally given landowners some long awaited clarification.

FBC Manby Bowdler’s Agricultural Consultant Steven Corfield examines what it means to anyone hoping to strike a deal on telecoms masts on their land:

Since the introduction of the Electronic Communications Code 2017, landowners and operators have been waiting for clarification on various aspects relating to new leases and the renewal of existing agreements. 

A recent decision by the Upper Tier Tribunal of the Lands Chamber on the subject of consideration, rental levels and compensation was a first judgment on this aspect.

The case involved EE Limited and Hutchinson 3G UK Limited v The Mayor Burgesses of the London Borough of Islington and related to a rooftop lease for 10 years. Whilst this case applied to a city site, the court set its criteria for the decision process so this will apply to all sites whether they are in the town or countryside.

The parties could not reach an agreement so the tribunal imposed an agreement on them for a 10-year lease with the conditions that had been originally proposed by the operator but to be subsequently varied by agreement between the parties.

For rental levels, the court applied a new valuation approach, ruling that the rental level was determined by not taking into account the existing telecoms network. Working on the basis that no network existed it meant the rental level would have been reduced to £1,000 per annum, although the operators had offered £2,552 per annum, which the court did actually order to be the case.

On this occasion the “no network” basis resulted in a nominal value for this small rooftop site with relatively little equipment but this approach to a tower site in the countryside may introduce other parameters.

The court also looked at the compensation payable to either party for loss or damage arising from the exercise of the Electronic Communications Code. Compensation may be payable by a lump sum, payable conditional upon events, payable periodically and in such form as a court ultimately determines.

Amongst other things, compensation may include expenses such as surveyor’s fees and legal costs, diminution in land value, and the costs of site reinstatement. The compensation can be payable for equipment installation.

Each case will need to take into account its particular circumstances. There will be more cases coming out on this subject, but it is clear that this court decision has significantly changed the land owners’ negotiating position.

To contact the Agricultural & Rural Services team at FBC Manby Bowdler, call 01743 241551 or email steven.corfield@fbcmb.co.uk. 

FBC Manby Bowdler’s Agricultural & Rural Services Team was recognised as a Top Tier team in the West Midlands in the Legal 500 2019.


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