A leading law firm is warning land owners to protect their interests when it comes to renting sites for telephone masts and also to be cautious of ‘independent’ advisors offering advice on the subject.
There are more than 50,000 phone masts in place across the UK. For many landowners or landlords with small pieces of unused land or roof space, installing a phone mast proved a welcome and easy source of additional income over recent years.
But the telecoms industry is currently in a period of significant transition, with all of the main operators looking to drive down costs through network consolidation. As a result, many masts could be taken down and operators are looking to extract the best possible terms for those which remain. New terms, often at a reduced rent, are being offered to mast landlords on the basis that, if they are not accepted, then the mast will be removed.
Faced with the option of reduced or no income then the choice seems simple for many. But is everything what it seems? Luke Maidens, a solicitor in Shulmans LLP’s Property Litigation Department and a specialist in telecoms law, offers some advice to those who have or are considering a phone mast on their land.
-
Independent advice? - Check that any professional advice you receive is genuinely independent. Someone who, on the face of it may appear to be an ‘independent’ advisor or surveyor, may in fact be operating with a conflict of interest. For example, they may be associated with the operator, or have some other financial interest in the revised deal going through.
-
Sub-letting - Be wary if an agent offers to lease roof space then sub-let it. They must feel they could make a profit by paying you less than you could get direct.
-
Capital payments - There are organisations which offer to secure a substantial one-off capital payment for a mast site. But make sure it is offered to the wider market, and not just one purchaser, to get the best price.
-
Standard forms - Anyone presented with a “standard form network operator agreement” which has been prepared by or on behalf of the network operators should take independent legal advice before signing.
-
Break Notices - One tactic operators use is to seek to exercise break rights contained within leases. Often, these break rights contain specific conditions which must be strictly complied with, otherwise they cannot legally be enforced. If you receive such correspondence from the operators, it is crucial that you seek independent expert advice to check your position. In many cases, £100,000+ can be stake.
-
Site consolidation – In some instances, the operators are writing to landlords to inform them they are bringing other operators onto the site and that the landlord’s consent or further payment is not required. This, often, is not the case and in fact there is an absolute prohibition on site sharing contained in many leases. Don’t just assume they’re right.
-
Driving down rents - Operators are looking to reduce rents and the tactic they often deploy is to contact landlords to state that, unless the rent is reduced, the operator will vacate and the entire income stream will end. Often, this is simply a bluff or bullying tactics. Is there actually any right to break the lease within your contract, and are there realistically any alternative sites for the operator to relocate to nearby?
-
Lease renewals - With the market maturing, many telecoms leases completed in the boom years have either now expired or are due to expire. In some cases, operators are benefitting from very low and out of date rents. Check your lease renewal date and seek expert valuation advice to check whether you should be implementing the renewal of the lease, to gain an updated market rent.
-
General site management - Are you keeping on top of site management generally? For example, is the rent actually being paid, have the rent reviews been implemented, are you receiving any site share fees which are due? Luke Maidens from Shulmans offers this cautionary tale: “We came across one instance where the operator had not paid rent for 10 years and owed over £90,000 in back rent for one mast. A third of this was irrevocably lost, as rent over six years old cannot be recovered”. The lesson is that it pays to be vigilant.
By being aware of these types of issues and seeking independent expert advice when necessary, property managers can protect theirs and/or their clients’ interests in this time of upheaval in the market.
Luke Maidens is a solicitor in Shulmans LLP’s Property Litigation Department and a specialist in telecoms law.
