Telecom masts can be a welcome source of income but can also pose problems when you want to redevelop a property. The Law Commission has just announced that it is going to review the Electronic Communications Code which may be good news for property owners. The review process will take until Spring 2013, so it will continue to be important for owners to exercise caution when telecoms operators want to place equipment on their land. Given this week’s news about increasing broadband speeds for parts of the country that are badly served at present, more electronic communications sites will be needed by the operators.

During the last two decades, landowners took advantage of the race run by telecoms companies to improve network coverage across the country by allowing mobile phone masts and other telecoms equipment to be put on their land for a rent or a licence fee. However, the decision to enter into these agreements - often without taking legal advice - can cause a costly and troublesome barrier to the removal of equipment when the original agreements have ended or a redevelopment is planned. 

The big problem is that a landowner can only force the removal or alteration of telecoms apparatus installed on their land by following a statutory procedure. Whether they realised it or not, they are bound by the Electronic Communications Code and, unlike the Landlord & Tenant Act 1954 provisions, it is not possible to contract out of it.

Statutory Procedure

When the landowner wants an alteration to the equipment or wants his land back (or does not want the equipment there in the first place) they have to serve a notice on the operator requiring the removal of the telecoms equipment. If the operator objects he can go to Court to get an order to stay without any agreement. The trouble is that there is no case law establishing principles that could be relied on to interpret the Code.

Our Market Experience

To date, operators have managed to reach settlements with landowners without needing to have their day in Court. Currently we are seeing a pattern of industry consolidation where operators ‘buddy up’ and share telecoms space under existing arrangements with landowners. We are also seeing operators now threatening litigation although so far their actions have remained at the threat stage. Obviously it is not in the operator’s commercial interests to alienate the property industry and they should generally still be motivated to negotiate.

Conclusion

The potential difficulty and costs involved in obtaining vacant possession at the end of an agreement may well outweigh the short-term financial gains! Therefore, landowners should carefully consider the long-term implications of agreements with operators, no matter how innocuous the proposed arrangements may appear. Restrictions on the operators on their use of the equipment on the land may be tough to negotiate but will prove invaluable. Our experience allows us to suggest a number of ways in which landowners can protect themselves against the threat of enforcement of the Code – please contact one of the authors of this blog or your usual Reed Smith contact.

Submissions

Submissions to the Law Commission are not currently required until September 2012. This post will be updated then to discuss potential submissions on the proposals set out in the consultation paper.