In today’s technology driven age, the demand for comprehensive mobile phone coverage and more powerful signals is insatiable. The government has been open about its plans to relax planning laws to enable the construction of new 5G masts up to 50m in height across the countryside. To facilitate this demand, telecoms operators are already seeking to install, upgrade and maintain telecommunications equipment and masts in more and more locations across the UK. Invariably, this equipment is sited on land owned by third parties, whether that be open land or rooftops.
The New Electronic Communications Code, which came into force in December 2018, covers the installation and maintenance of mobile phone infrastructure on private and public land, including masts, exchanges and cabinets, and has brought in sweeping changes to the relationship between landowners and telecoms operators. These changes are very much biased towards operators. For example, it is now very difficult for landowners to refuse to grant rights to operators who want to use their land. If terms cannot be agreed, the operator can apply to a tribunal to decide whether an agreement should be granted and on what terms. The land owner can oppose this, but the grounds the that landowner can rely upon are very limited. The New Code is complex and specialist advise is essential to minimise the impact on you and your business.
What is the Electronic Communications Code?
The code came into force on 28 December 2017 and promised to change the dynamic between landowners and telecoms operators, in favour of operators. The aim of the code was to provide operators with greater flexibility and enhanced rights to install apparatus in, over, and under land (the code rights) and was introduced to accommodate growth in the mobile phone industry and demand for network expansion. It was not introduced to help landowners.
New provisions under the code include:
- Any restrictions on an operator’s ability to upgrade or share apparatus, or to assign (e.g. requiring landowner consent or additional rent/payments) will be void. However, any additional apparatus cannot have “an adverse impact” or create an additional burden on the landowner. The subjectivity of this test is expected to give rise to disputes.
- When the old code was established the government did not take into account the parallel and often contradictory rights under the Landlord and Tenant Act 1954. However, now, an agreement under the new code cannot also be a business tenancy under the 1954 Act.
- If the new Code applies, the termination process will be now be much longer, with particular grounds for termination to be given by a landowner alongside an initial 18 months’ notice. Further notice then needs to be given to enable the removal of the apparatus which may involve court applications.
- Previously, operators paid rent freely negotiated on an open market basis. Under the new code, rent assessments will disregard any enhanced value of the site to the operator based on telecoms use. In other words, the operator will pay less.
What does this mean for landowners?
The changes introduced by the new code include the ability for operators to share the site with another operator, assign their lease, or upgrade the equipment, all without the landowner’s consent. The code also changed the valuation basis of telecoms sites – moving from a valuation assessed on an open market basis to a ‘no scheme’ basis. The ‘no scheme basis’ review disregards the existence of the telecoms leases and the associated code rights within its calculation. Instead, the site is valued on its worth to the landowner only, rather than the value to the operator, which in practice can present a substantial financial difference in the rent recoverable by landowners and prove highly beneficial to operators. Landowners need to carefully consider future plans for their property before agreeing terms with an operator.
What options are available to landowners?
The Code introduced new provisions for terminating a code agreement and the removal of the apparatus.
- A landowner must give 18 months’ notice to the operator that the agreement is to come to an end and cite the grounds on which the termination is founded. The code provides four grounds upon which a landowner seeking to terminate the agreement can rely and include, most commonly, having an intention to redevelop the property, substantial breaches of the agreement by the operator, and a delay by the operator in paying rent. The landowner’s notice will terminate the agreement unless the operator responds with a counter-notice to the landowner and an application to the court to object to the notice they have received. Landowners seeking vacant possession of their property will therefore need to accommodate the additional periods of notice introduced by the code before they are able to obtain exclusive possession of their property.
- Secondly, having secured the right to terminate the agreement a landowner must then serve notice requiring the removal of the apparatus from the land. Should the operator fail to remove the apparatus, the landowner may apply to court for an order forcing its removal.
Does a telecoms agreement benefit from security of tenure?
Under the Code, the security of tenure provisions under the 1954 Act will not apply to any agreement between a landowner and an operator where the primary purpose is to grant Code Rights. In practice, this means that operators will only benefit from one form of security of tenure (that provided under the ECC) and not under the 1954 Act also. For agreements in place prior to 28 December 2017, landowners will need to ensure that they also satisfy the requirements of the 1954 Act, in addition to the termination provisions under the ECC, before they are able to obtain vacant possession of their property.
How is the court enforcing the Code?
Whilst in CTIL v Compton Beauchamp Estates Ltd the Upper Tribunal found in favour of the landowner, that was very much a case on its own facts, and lessons learnt by operators from that case mean that there is unlikely to be a repeat performance. Otherwise, the tribunal is consistently finding in favour of telecoms operators. Operators are running cases all the way just to create legal precedent. This is a developing area, but what we know so far is:
- Refusing Code Rights based on redevelopment where the ‘redevelopment’ is the replacement of an operators’ mast with your own won’t work
- Code rights can be obtained over ‘land’. Arguing that that space occupied by existing telecoms equipment is not ‘land’ will not work
- It is a Code right available to Code operators to carry out preliminary surveys and inspections to assess the suitability of a site for the installation of electronic communications apparatus
How we can help
We advise landowners on how to navigate the code, offer guidance on appropriate terms and, if necessary, we will fight your corner in the tribunal and the courts. If you are approached by a telecoms operator, wish to remove telecoms equipment from your land, you are not happy with the terms of your current deal, or a telecoms provider’s use of your land is interfering with your business or personal life, get in touch.
Examples of things we can help with include:
- The interpretation of the New Electronic Communications Code
- Agreeing terms for telecoms operators to install and use telecommunications equipment
- Proceedings for the removal of telecommunications equipment
- Renewal of existing agreements
- Consent for alterations
- Damage caused to your land, building or livestock by telecoms provider or their contractors
- Rent arrears
- Site sharing
- Access disputes