Landowners will often receive speculative letters from telecoms providers asking them to enter into an agreement to allow a telecoms provider to install and retain telecoms equipment on the landowner's land. If you receive a letter of this nature, here are some of the considerations you should factor into your decision:
- Rights to install equipment - If you do not reply to the telecoms provider or refuse their request to install equipment, the telecoms provider can apply to court for an order that an agreement is imposed against you.
The court can impose an agreement if: (a) the prejudice caused to you by the agreement can be adequately compensated by money and (b) the public benefit which would result from the agreement, would outweigh your prejudice. The court must have regard to the public interest in having access to a choice of high-quality electronic communication services.
The telecoms provider is most likely to apply to court for such an order, where it has not had success in finding suitable land in the near vicinity or has been unable to reach an agreement with a neighbouring landowner to install its telecoms equipment on neighbouring land.
In agreeing to the installation of telecoms equipment on your land, you can avoid the cost of litigation and will have more control over the terms on which the telecoms provider occupies your land.
- Rental Income - The telecoms provider will offer a rent in return for the retention of equipment on your land. The Electronic Communications Code, introduced in 2017, reduced the levels of rent that landowners can expect in return for leasing land to telecoms providers.
Whilst you may be satisfied with the covenant strength of the initial telecoms provider, it is worth being aware that any attempt to restrict assignment of the telecoms agreement is void. As such, you will have no control as to the identity of the telecoms provider for the duration of the telecoms agreement and therefore limited comfort that the income stream will always be secure.
- Improved Connectivity - The telecoms equipment could improve mobile connectivity for you and your local community.
- Redevelopment - Whilst you might be minded to agree to a telecoms agreement, you may change your mind, when you consider the regime for having the telecoms equipment removed should you wish to redevelop your land.
There are three steps for having telecoms equipment removed: (a) the landowner must terminate the contractual rights of the telecoms provider (i.e. a break clause in the telecoms agreement or the term of the telecoms agreement has expired); (b) the landowner must terminate the statutory rights of the telecoms provider; and (c) the landowner must serve notice requiring the removal of the equipment.
The Code provides that the Code rights (i.e. the right for the retention of equipment) in a telecoms agreement will continue even after the telecoms agreement has contractually come to an end. Before a landowner can require telecoms equipment be removed, the Code rights must be terminated. The landowner can do so on 18 months' notice provided it can make out one of four grounds. One such ground is an intention to redevelop all or part of the land to which the telecoms agreement relates, or any neighbouring land, and would not reasonably be able to do so unless the telecoms agreement comes to an end. If the telecoms provider disputes the notice, then the matter is sent to the Lands Tribunal to determine if there is a genuine intention to redevelop.
If a telecoms provider does not remove the equipment at the end of the 18 month period, then the landowner will also need to serve further notice on the telecoms provider to require the removal of the equipment. If within 28 days of this notice, no agreement is reached with the telecoms provider as to the timescale for removal of the apparatus, the landowner can refer the matter to the Lands Tribunal to determine.
Some of these concerns can be mitigated by agreeing with the telecoms provider a lift and shift provision in the telecoms agreement; which would require the telecoms operator move the telecoms equipment to an agreed location if requested by the landowner. This is only useful if there is an alternative location available. Whilst there is some concern that such a provision might be unenforceable (without first terminating the statutory rights and giving 18 months' notice), a County Court has upheld such a provision. Whilst this decision will not bind higher courts, it is of note as it shows the judicial intent.
It is worth noting that if you have received a speculative letter and are minded to object but are concerned about a court imposed telecoms agreement; the statutory regime enables the court to refuse to make an order for a telecoms agreement, if the landowner shows an intention to redevelop all or part of its land or any neighbouring land and could not reasonably do so if the order were made.
- Aesthetics - You may consider a telecoms aerial unsightly.
- Interference with Other Equipment - You should consider whether any telecoms equipment might interfere with any of your other equipment. If you enter into a consensual telecoms agreement you could agree with the telecoms provider that if interference does arise, they will temporarily switch off their equipment until the problems are remedied. Inclusion of such a provision however, is not a watertight solution to the issue of interference, as there is some concern amongst commentators that such a provision could be unenforceable.
- Non-Compete - If you have entered into agreements with other telecoms providers, you should check that under the terms of those agreements, you are not prevented from entering into further telecoms agreements.
- Health Risks - Some might be concerned about the potential health risks associated with exposure to electromagnetic radiation emitted by telecoms equipment.
- Rights of Access / Laying of Cables - You might like to think about how the telecoms provider is going to access the telecoms equipment and the route of the electricity and other cabling ancillary to the telecoms equipment. Will this be disruptive to operations on your retained land? Is the telecoms provider going to require round-the-clock access to the cabling to carry out repairs and maintenance? How will this affect you?
- Line of Sight - The telecoms provider is likely to insist that should the landowner wish to develop its retained land, it will ensure that the line of sight to the telecoms equipment is not obstructed. You should consider the impact of such a provision on any potential plans to develop your retained land in the future.
- Lenders - If your land is subject to a legal charge to secure a loan then you will need to consider whether you will require lender's consent to enter into a telecoms agreement.
If you have received a speculative letter, it is worth discussing with a lawyer how best to respond to the letter to achieve your desired aims. If you are minded to agree to a telecoms agreement, then it will be key to negotiate terms to protect you to the greatest degree permissible under the Code and a lawyer will be able to provide guidance in this regard.