Telecommunications is a fascinating area of work for property professionals, where the demands of a modern, connected society need to be balanced with property rights between Landlords and Tenants of phone mast sites. As we move towards 5G and the Internet of Everything, the needs for ever-increasing telecoms infrastructure increases.
It has been confirmed by Government that Schedule 1 of the Digital Economy Act 2017, containing the new Electronic Communications Code will come into force on 28th December 2017.
Telecoms operators have previously enjoyed certain powers, particularly in respect of security of tenure, however the new Code develops some of the content and makes amendments to areas such as the sharing of equipment with other operators.
Fundamentally, the new Code resists calls from the telecoms industry to change the basis of valuation for mobile phone base stations from consideration to compensation.
In practice, this means that if an operator approaches their Landlord to suggest that because of the new Code, rents must fall significantly, they are not correct. The rental value of the site is still to be assessed on the principle of an agreed consideration for the Rights, and not compensation for the reduction in the value of the property with the equipment there (compared to the same property without a mast).
It will be important to take care when agreeing new terms under the new Code, as these few early deals will form the foundation of rental evidence used in negotiations for new sites. It is recommended that Landlords take early professional advice as soon as possible when discussing lease renewals for existing sites or new sites.
Please contact Ed Blundy (01553 778056) or Jonathan Rush (01603 598235) for further information.