Update on Telecoms Lease Reform

The Digital Economy Act came into force on 28 December 2017.

What’s the effect?

The main point of interest for landowners and land agents is the Act’s effect on new telecom mast leases, including a lease being currently negotiated, but excluding existing telecommunication agreements.

The Act gives a site operator the right to unrestricted sharing with other telecom operators, and they can also upgrade their equipment without seeking the landowner’s permission, provided it has no adverse impact or no more than a minimal adverse impact, on the mast’s appearance.

It must also:

  • Not have an additional adverse effect on the landowner’s enjoyment of the land; or
  • Cause additional loss, damage or expense to that party.

The positive for landowners is that site operators will be limited in the number of sharers they can allow on the mast.

However, even with this positive, the new Act will give the operator security of tenure with no option for the landowner to contract out, but there are options to end the tenancy as follows: -

  • As a result of substantial breaches by the operator of its obligations under the agreement (i.e. new lease);
  • Persistent delays by the operator in making payments to the landowner;
  • The landowner intends to redevelop all of part of the site to which the code agreement relates, or any neighbouring land, and could not reasonably do so unless the code agreement comes to an end;
  • The operator is not entitled to continue the lease because the test under paragraph 21 for the imposition of the agreement on the landowner has not been met.

Paragraph 21 -  conditions:

  1. The prejudice caused to the landowner by the order is capable of being adequately compensated by money.
  2. The public benefit likely to result from the making of the order outweighs the prejudice to the landowner. In relation to this latter point, the court must have regard to the public interest in access to a choice of high quality electronic communications services.

Drafting telecoms leases

Rent reviews should be drafted on a yearly basis, not a specific date basis, as the tenancy could continue beyond the existing lease term. Therefore, if the rent review is undertaken on a specific date basis in the lease, this could prevent the rent being reviewed once the initial term has expired.

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