‘Allowing mobile phone equipment onto your building used to be an easy source of income’ says Douglas Godwin, Partner Commercial Services at QualitySolicitors Parkinson Wright. ‘However, rents have been cut dramatically and it takes much longer to get the kit removed if you want to redevelop.’
The new code was expected to be simpler than the rules it replaced but, in practice, lots of questions remain which are being answered by the court, and so commercial property owners need clear advice about their rights and obligations if they are approached by an operator.
The policy behind the Electronic Communications Code is to promote an effective communications network as part of our national infrastructure. The network cannot function unless operators are able to place equipment on private land, so operators can request a range of access rights, known as ‘code rights’. These will be set out in a wayleave agreement between the property owner and the operator. The operator may want to use their own standard form agreement, but the property owner must get their solicitor to review the agreement and negotiate any changes necessary to protect their own interests.
Key questions to discuss with your commercial property solicitor include:
- Do I have to allow communications equipment onto my land at all?
- How much can I ask the operator to pay in return?
- Can the equipment be removed for repairing or redeveloping my property?
Recent court decisions give some answers to these questions.
The rules make it difficult for landowners to refuse to grant rights under the code and, if necessary, the court will impose an agreement. A landowner may be approached to allow an operator access to a building to carry out a preliminary survey to assess whether it is a suitable site for equipment. The court has ruled that even this is a right, so property owners must consent.
Rent and compensation
The new code changed the way equipment sites are valued. As a result, rents payable by operators are significantly lower than under the previous rules. For example, in one recent case, the court found that the correct yearly rent would be £1,000, compared with around £21,000 under the old valuation rules. Property owners may, however, charge a reasonable contribution towards maintenance and insurance of the site.
Redevelopment and repair
One of the most difficult issues for commercial property owners is getting operators to remove their equipment once it has been installed. Under the code, an owner may serve 18 months’ notice to bring rights to an end but only in limited circumstances; broadly, if the operator is in breach of its obligations or the owner wants to redevelop and cannot reasonably do so unless the equipment is removed.
The code does not allow for temporary removal or relocation of the equipment to allow the building to be repaired, so your solicitor should try to negotiate suitable provisions in any wayleave agreement. When you reach the point at which you need to get the equipment shifted, your solicitor will also be able advise you on the right procedure.
Taking a constructive approach
One clear practical message from the court decisions during the first year or so of the new rules is that landowners must be prepared to negotiate with operators and may have to bear a significant part of the cost of any relocation of equipment. The court will not allow landowners or operators to take aggressive positions or create disputes for the sake of it and both sides must engage in a constructive way.
Getting good legal advice as soon as an operator asks for rights under the Electronic Communications Code will give you the best chance of protecting your long term interests.
For further information, please contact Douglas Godwin, Partner on 01905 721600