There has been reported cases of operators using the code to offer as little as £1 per year, whereas under the previous legislation the rent for a rural site was typically between £5,000 and £10,000 per year. However, we believe the determinations from the Upper Tribunal have strengthened the land owner’s position.
Expectations for proposed terms and rents for Telecommunication Masts have been widely different for several years as interpretations of the legislation was unclear. The introduction of the Electronic Communications Code in 2017, was seen initially as a large shift in power towards the mast operators. As an industry they saw this as an opportunity to secure sites on long term leases with favourable lease terms and at low rental levels.
Landowners and their agents have defended their position in an attempt to retain leases on terms similar to the previous legislation. Many of the original leases being under commercial lease legislation (Landlord and Tenant Act 1954).
There are still areas that have not been defined and the mast operators use these legislative unknowns to form their current argument in an attempt to improve the terms in their favour. However, with more and more areas becoming clearer and a general feeling as to how Tribunals are forming their opinions, we are now better placed to challenge low rents and unfavourable terms sought by the operators.
What do you do if you are contacted by your Mast Tenant?
Take advice, the strength of your position changes depending on your current lease and where it is in relation to the fixed term. Some tenancies will fall under the protection of the older legislation, some may automatically be subject to the new Code, even though no agreements have been signed.
What do you do if they want a new tenancy?
A new tenancy may be appropriate but talk to your advisor as you do not want to lose the landlord’s protection of the 1954 Act. A lease under this legislation could be at a higher rent.
What do you do if they offer a large “signing up” fee?
These payments can be large, in some case more than the offered rent but we would usually suggest taking stock of the legal position before being tempted into accepting such a payment.
What do you do if you are due a rent review and you are still within the fixed term of the lease?
In many cases rent reviews are still applicable. It is the right action to take to enable you to benefit from an increased income. There may be situations where highlighting a lease to the operator or their agent carries a risk of the operator legally being able to transfer your lease to a lease under the new Code. Again, taking advice is key to maintaining long term rental income from these sites.
We have a specialist team working across the network of Brown&Co offices that is able to guide you through this process. Find your local expert here.