The Government has changed the law to expedite the roll out of broadband and mobile telecoms across the UK. What does this mean for owners, funders and managers of property?
The Digital Economy Act 2017 creates a new Electronic Communications Code (‘Code’) which will govern the relationship between telecoms operators and landowners and occupiers. The consequence is that key provisions in new wayleave and other agreements granting rights under the Code will be different to those used before the new Code came into force on 28 December 2017.
Key changes: mast rents will probably be lower; it will take longer to end a telecoms agreement, but you should be more confident you will get vacant possession at the end of the process.
In more detail:
Compensation and consideration
- The method for calculation of the consideration payable under an agreement has changed. Consideration is assessed by reference to market value from the perspective of the land owner only. The fact a site has a telecoms use and its value to the operator are not taken into account.
- Assignment, sharing and upgrading.
- Operators have an automatic right to assign the benefit of any agreement to another operator without landowner consent, subject only to provision of a guarantee agreement.
- Operators also have an automatic right to share and upgrade apparatus without landowner consent unless there is more than a minimal adverse impact on the appearance of the apparatus or the landowner faces an additional burden as a result.
- Provisions which seek to prevent or limit these rights or make them subject to conditions will be void.
Termination and removal
- Where the primary purpose of an agreement is to grant rights under the Code the landowner will only be required to follow the termination procedure set out in the Code. The termination provisions of the Landlord and Tenant Act 1954 will not apply to the agreement.
- Landowners are required to give 18 months’ notice to terminate a Code agreement. Operators then have 3 months to serve a counter notice opposing termination of the agreement and they can apply for a court order that the agreement is to continue.
- Where tenants leave premises giving less than 18 months’ notice, the contractual agreement can be terminated, but the operator’s Code rights continue. For a wayleave agreement, this may be of minimal concern to landowners if no one is using the apparatus. In contrast, where a mast remains operational, landowners would be wise to take advice on their options.
- Termination is separate to removal. Once an agreement has been brought to an end an owner must serve a further notice giving the operator a reasonable period of time to remove the apparatus. The landowner can apply to court for an order enforcing or granting removal rights.
Powers of the court to impose an agreement
- Likely to be of most relevance to the erection of masts, the court can impose an agreement on a landowner if they can be adequately compensated by money and the public benefit likely to result outweighs the prejudice to the landowner. Consideration of the landowner’s position is a key change,
- If a landowner can show that they wish to redevelop a site and the order would restrict development, the court will not impose an agreement on the landowner.
Transitional provisions
- Complex transitional provisions relate to existing agreements, applying some new Code provisions but not others.
For further details or advice on the new Code and how it will impact upon your portfolio of properties, please get in touch with your usual Wedlake Bell contact.
We’ll be running a seminar on the Code later in the year – if you’d like to come along please register here and we’ll be in touch as soon as the date is settled.