News

Know your client “If it walks like a duck…”

Suzanne Gill’s piece offering advice on how to ‘know your client’, published in Law Society Gazette. To read the article please click here.

News

CAN’T SEE THE WOOD FOR THE TREES?

Telecoms masts are like Marmite: either you love them or you hate them. So many people hate having masts on their land that sometimes it seems like a whole industry has sprung up, of surveyors and lawyers professing their expertise in stopping telecoms companies putting up new masts or altering the ones they have already.

The changes to the electronic Communications Code, effective from 27 December 2017, have not diminished the demand for services of this nature. Landowners can now charge operators both consideration and compensation. However the new Code has affected the tactics employed by mobile mast operators and their opponents.

KEY POINTS

Consideration

This has been clearly demonstrated by the first case on values heard by the Upper Tribunal using the new Code.

EE Limited and Hutchison 3G Limited v London Borough of Islington [2019] UKUT 0053 (LC) heard how an offer f £21,000 rent for a rooftop mast was dramatically reduced once the new Code came into effect. The new Code provides for consideration to be valued on compulsory purchase principles, and using the assumption that the land is not to be used for telecoms purposes – referred to as the “no scheme” rule. This means that in many cases the relevant comparables are uses such as storage or parking. In the Islington case, the telecoms companies’ expert claimed roof top gardens or storage panels were the only relevant examples, so the rent should be £1 rather than £21,000.

The first point to make on valuation is that if the characteristics of the premises mean that in reality nobody would pay anything for them, the correct conclusion may be that their market value is nominal. That said, at Wedlake Bell we’ve had a number of queries from our clients who feel that telecoms companies are too quick to attribute a nominal value to land.

The Tribunal was clear that it would be appropriate for the telecoms companies to make a contribution to the expenses of running the building and the Council’s costs in complying with its obligations in the lease – but included within the consideration, rather than as a separate service charge. Anyone with apparatus on the roof should pay a share of the costs of the roof repair. The tribunal valued the nominal consideration at £50 and the other consideration as £1,000 per annum.

Compensation

The Code is very flexible on what can be payable as compensation. However there must be a causal connection between the Code rights and the loss in question; that loss must not be too remote; and the person claiming

compensation must be reasonable. In other words they must take the steps a reasonable person would take to eliminate or reduce the loss and avoid incurring unreasonable expenditure.

In this case the Tribunal agreed reasonable legal and valuation fees could be claimed as compensation, with loss or damage to the building caused by the installation of the agreement, and also for the temporary use of land at ground level for a working compound while the apparatus is installed. In theory it would be possible for a diminution in value of the land caused by the presence of apparatus to qualify as a compensation claim, but despite the Council’s best efforts, their evidence did not establish that in this case.

More imaginative claims for compensation were also rejected by the Tribunal. Specifically, shadowing the telecoms company every time they accessed their apparatus, a claim for the aesthetic detriment to the building as a result of the apparatus, payment now for lift and shift delays when the roof needs repairing and for delays in vacant possession in future. These last two heads of claim can be a new case for compensation if and when they arise.

Tactics

Many landowners dislike having to deal with telecoms companies for a low rent; the operators’ claims that only nominal rent is now due have not improved relationships. In this case however, things seem to have gone too far.

The landowner Council:

• did not comply with the Tribunal’s pre-trial directions, which were designed to reduce the issues argued before the Tribunal;
• claimed a lease could not be granted under the Code.

as a result of which they were barred from making any submissions on the terms of the draft lease. This meant the lease was granted in the operator’s standard form, and the Tribunal only considered the amount payable. The standard lease was a 10 year lease, with an RPI review and a tenant break, both at the end of the fifth year. It’s not clear why the Council (or its advisers) thought a complete disregard of the Tribunal’s directions was a sensible approach.

And finally

In this case the statement of claim from the operators assessed the value at £2,551.77 per annum, being half the rent payable for basement storage. This was more than the £1,000 the Tribunal assessed so that’s the amount payable in this case. Don’t expect the operators to make this mistake again.

Legal Podcast

Episode 1: Coworking – Phenomenon or Flash in the Pan?

Key legal issues for landlords and tenants from the biggest market disrupter for decades discussed by Wedlake Bell commercial property partners Suzanne Gill and Claire Nelson.