For more than 20 years telecoms facilities have generated additional income for landowners as mobile phone companies vied to build extensive competing networks of mast and microcell sites throughout the country. For many, the installation of a mast on a small piece of vacant land or roof top, or the siting of small items of apparatus on the exterior of a building, and tucking a microcell operating station in the basement was an additional source of income too tempting to ignore.
Unique security of tenure under the Code
However many site owners do not appreciate the special protection and powers telecoms operators enjoy under the Communications Code, as laid down originally in the Telecommunications Act 1984 and now amended by the Communications Act 2003 (the "Code"), in addition to any security of tenure they may have under the Landlord and Tenant Act 1954. While security of tenure under the 1954 Act can be excluded, the powers under the Code cannot. Consequently a landowner needs to know that it may not be able immediately to obtain vacant possession and require the telecoms operator to remove its equipment at the expiry of the telecoms agreement, and that further procedures may be necessary.
There is also the issue of "multiplying" telecoms security of tenure, where landlords allow operators to share sites. Site sharing has increased in recent years as public opposition to the erection of new masts, on the grounds of health and environment, has grown and operators have been encouraged to explore the possibility of sharing an existing mast or structure with another operator before seeking planning approval for a new site. Financial considerations and consolidation in the market now add further impetus to site sharing.
Although landowners can profit from allowing site sharing, typically receiving an agreed percentage (30-50%) of the site sharing income, it will become more complicated to require removal of the apparatus at the end of the term, as the landowner has then to deal with potential claims to retain apparatus from a multiplicity of operators. If development of the land is intended, then considering restrictions on site sharing would help to protect the landowner against future complications.
Key points under the Code
The key points for landowners to note under the Code are:
- Paragraph 21 permits operators to remain in occupation after contractual expiry of a lease or break notice, or termination of the lease by forfeiture and restricts landowners' rights to obtain vacant possession;
- Paragraph 20 allows landowners to request but not to force modifications to the operators' equipment to permit re-development ("lift and shift");
- Paragraph 5 allows operators to apply to court to force the landowner to agree to the installation of equipment on its site
Obtaining vacant possession
If a landowner wishes to obtain vacant possession of its site at the expiry of a telecoms agreement, then in addition to serving any notices required by other statute (for example the 1954 Act) or by the terms of the agreement, the landowner must serve written notice under paragraph 21 of the Code in a form approved by OFCOM, requiring the operator to remove its apparatus. The notice need not specify a date for removal but if it does, it must be at least 28 days from service of the notice.
The operator has 28 days within which to serve a counter notice to protect its position under the Code and if a counter notice is served then:
- The landowner cannot remove the operator's equipment without obtaining a court order; and
- The operator can apply to court for a new agreement at any time.
If the operator fails to serve a counter notice within the 28 day period, it loses its protection under the Code, although the landowner still cannot remove the equipment without obtaining a court order unless the equipment is deemed to have been abandoned by the operator.
In some cases, operators serve protective counter notices but fail to follow up with an application to court for a new agreement, which can be frustrating for a landowner looking for certainty of vacant possession. If it proves impossible to negotiate an agreement for removal of apparatus, it will be necessary for the landowner to make an application to court requiring its removal.
Lift and shift
If landowner simply requires the alteration or relocation of telecoms apparatus, to carry out its development (as opposed to vacant possession), then the landowner needs to serve written notice under paragraph 20 of the Code. As with a notice under paragraph 21, the operator has 28 days within which to serve a counter notice and if a counter notice is served, the landowner cannot require any alteration or relocation of the apparatus without a court order. The court will only make an order if it is satisfied that the alterations/relocation are (a) necessary to permit development and (b) will not interfere with the operator's network services. The landowner also bears the operator's costs of the alterations.
The losses incurred as a consequence of being unable to redevelop a site, or to deliver vacant possession of leasehold premises as a condition of validly exercising a break clause, can vastly exceed the income generated during the term of the agreement, and any landowner must consider carefully whether the short term gains outweigh the long term plans.
Evidence to date suggests that operators prefer a negotiated solution rather than relying on Code powers and going to court (there has only been one reported case of a court imposing a new agreement on a landowner) and where a landowner requires vacant possession for redevelopment, operators will arrange an orderly relocation, at the landowner's cost, provided network coverage is not disrupted.
Ironically, with the current consolidation in the telecoms market following wide expansion of the mobile network in recent years, some operators are now looking to terminate agreements and are proposing an early surrender. Even if the agreement proceeds until its natural termination date, landowners can take comfort in such circumstances that the operators are unlikely to rely upon Code powers to remain on site when the agreement does end.