Telecoms Lease Renewals: why landowners should proceed with caution

If your land or building hosts a telecommunications mast on its property, it is important to understand how legal changes that came in in 2017 may affect you and the Code agreement or lease of the telecommunications mast site today. Code agreements and leases are often for periods of ten years meaning that pre-2017 agreements and leases will be due for renewal imminently.

In 2017, the Electronic Communications Code (the “Code”) introduced a fundamental shift in how payments for telecommunications sites are assessed. Prior to this, valuations were based on the market value of the site in its specific use as a telecommunications site, meaning that the strategic importance of the location for Code operators such as EE Limited and Vodafone often resulted in relatively high payments. For example, greenfield sites (standalone masts in a field or industrial estate) could typically command payments of around £7,000 per annum, while rooftop sites in prime urban locations could achieve in excess of £20,000 per annum.

Following the 2017 reforms, valuation is now assessed on a “no network” basis, which disregards the site’s value to the operator. This has led to a significant reduction in site payments. By way of illustration, greenfield sites may now achieve in the region of £2,000 – £2,200 per annum, while rooftop sites often attract payments closer to £4,000 – £6,000 per annum.

It is also important to note that the expiry of a Code agreement does not bring it to an end in the conventional sense. In most cases, such agreements benefit from statutory protection under the Code, allowing the operator to remain in occupation unless and until the agreement is formally terminated in accordance with the prescribed procedures under the Code. This gives operators a level of security of tenure broadly comparable to that conferred by the Landlord and Tenant Act 1954 (the 1954 Act).

In some cases, agreements may instead be construed as leases falling within the 1954 Act. While these arrangements can occasionally result in higher rents than those determined strictly under the Code, they still tend to fall below pre-2017 levels.

Against this background, careful management and consideration of your existing agreement is essential. Where a Code agreement or lease currently provides for a higher, pre-2017 level of site payments, in most circumstances it would be advantageous to maintain the status quo and receive the higher site payment rather than prompt a renegotiation with the Code operator. 

For these reasons, it is strongly recommended that you seek advice from a solicitor experienced in telecommunications law who can comment on your agreement before you take any actions with it and before you contact the operator. A specialist solicitor can review your agreement, confirm its status, and advise on the best strategy to protect your position. Charities and education providers will have additional steps to take so it is important your instructed solicitor is familiar with such clients in addition to telecommunications law.