Since the introduction in 2017, the Electronic Communications Code (via the Digital Economy Act 2017) has caused significant conflict between site providers and operators of telecommunications mast. Although the intention was for the legislation to help with the roll out of new sites and 5G, it has been used in practice to review existing agreements, even if this wasn’t the main purpose of the legislation. One of the key changes was that rents were artificially reduced, to only allow you look at the basic land rent effectively ignoring the potential presence of a telecoms mast. This was to help keep the costs down for all new telecoms masts as we look to improve the nation’s connectivity.
However the changes in the Code created an opportunity of significant gains for big telecommunications companies, via potential rent reductions of existing sites, due to the changes to the law in 2017, among other wider changes such as site sharing. This has meant that there has been an ongoing raft of changes as a wider variety of agreements are being scrutinised, as large telecoms companies looking to utilise recent legislative changes to aggressively push rents down. This has resulted in the sector becoming an ever changing environment with a disproportionate number of cases going to the Upper Tribunal, and in a few cases ending up in the Supreme Court.
In part, to respond to the uncertainty in this area there is a new Bill in Parliament, which demonstrates that the Government’s intention is to extend existing laws in this area. The Product Security and Telecoms Infrastructure Bill, which is likely to get Royal Assent in October. The CLA has been continually lobbying at all levels of Government against the changes that have come in, so that both parties can be happy with the terms of the arrangement and are currently looking at the current Bill. This new legislation will look to align all the various forms of agreement which exist so it is worth being aware of these potential changes but they may not impact you.
In the area of telecoms masts, we strongly recommend members always take specialist advice. As there are so many permutations of each specific case depending on the current tenancy, the specifications of the case and how the renewed/proposed mast will be treated within the framework of the law.
In addition to protecting rents from the unacceptable aggressive rent reductions in excess of 90%, the CLA has tried to get the balance right between universal coverage. As a result, we have created the National Connectivity Alliance to make sure that CLA members are better represented. This is a working group to bring about a more balanced and fairer treatment of land owners who are having these changes imposed on them. This allows us to have more direct contact with phone companies and to better influence their actions.
While there is a push to reduce rents, evidence can always be produced to counter their offers will not keep rents high but will trump their offers. Such evidence can be based along the below lines. The below is a non-descript example, based on the South Downs case On Tower UK Ltd v JH and FW Green Limited  UKUT 0348, to give you an indication of the calculation methodology.
|Land base rent||£1,500||This is the rough rent that can be justified for letting out something of similar size and can be located there, so planning shouldn’t be an insurmountable hurdle. Essentially what is the realistic alternative use value? I tend to look to shipping containers as the next best thing, as the telecoms law creates a hypothetical world for the assessment of rent, where you can’t compare other masts. I have assumed that your sites are roughly equal to two 20ft containers with a usual rent of about £750 each, at the time of writing. Or this could be higher if you could find any alternative use that could bring you in a better rent. The important part is being able to evidence your figures, as the other side will have their own figures, but may not reveal the context of these figures.|
|Right of access/tenant’s rights||£600||This is to cover the inconvenience of having to continually provide access and ensure that access can always be provided for each of your sites. But this also reflects the terms of the tenancy, such as the ability for the tenant to end the agreement. This £600 figure is taken straight from a rural case in the South Downs which the Court provided commentary on. Which in this case included access for the pruning of the site provider’s trees.|
|Increased landlord’s costs||£500||This reflects increased costs to the business by having a mast situated in a particular location, with an eye to the disturbance that will be caused, such as in the South Downs case where a generator could be brought into the heart of the estate. This led to the Upper Tribunal making a £500 assessment in the case. Your increased costs may be justified as having an impact on farming or sporting operations, additional Health and Safety compliance and insurance costs etc.|
|£2,600||Total of this hypothetical calculation (but for you to edit where necessary).|
Again, we always recommend that you instruct your own professional representation. Please feel free to contact your local CLA office for more information or to get referrals.