Warning for landowners over new telecoms code

The Government’s aim to streamline and improve telecommunications and connectivity across the UK could have a negative impact for landowners with telecoms equipment on their land.

The Electronic Communications Code came into force on December 28, 2017 as part of The Digital Economy Act 2017 giving licensed telecoms operators the right to apply for an agreement to be imposed on landowners to place and keep equipment on private land, where one cannot be reached voluntarily.

The new code, which replaces that in the Telecommunications Act 1984, contains wide-ranging reforms in favour of operators and so landowners with telecoms tenants will need to understand the key changes.

Under the previous regime, rents were enticing, making it a potentially attractive option for many landowners to provide land for telecommunications apparatus but under the new code, while the basis of the consideration assessment continues to be market value, there are certain disregards that need to be taken into account.

This means the land will be assessed on the basis of its value to the landowner, rather than the operator, which may well lead to telecom operators, particularly during the early stages of the new code, seeking to drive down former rent levels enjoyed by landowners and subsequently use as comparables for further new agreements. The payment sums agreed now under the new regime will no doubt set the scene for the future.

Landowners also need to be wary of telecoms operators seeking to terminate existing contracts with the aim of setting up a new contract with more favourable terms under the new code.

Operators entering into new agreements under the new code, which must be in writing, will also have the opportunity (without being required to make any additional payment) to assign, and conditional rights to share with other licensed operators as well as upgrade their equipment, providing this does not create an additional burden to the landowner and results in only a minimal adverse visual impact on site appearance.

On the plus side for landowners, the double security of tenure protection which operators sought to enjoy under the old code and the business lease renewal regime under the Landlord and Tenant Act 1954 has been removed. Essentially, the 1954 Act is disapplied where the main purpose of the agreement is to grant code rights.

Agreements can now only have one or the other, the default being the code protection so that is one less hurdle for landowners seeking to obtain possession.

The code also sets out a structured process for landowners to follow if they want to “repossess” their land, perhaps for redevelopment. This is now a two stage process, the first being to terminate the code rights and the second to secure the removal of the equipment.

The whole process could take two years at least with the tribunal possibly involved at both stages if agreement can’t be reached.

It is vital that landowners fully understand the terms and implications of the new code and seek advice before signing any new agreements.

Eifion Bibby, Davis Meade Property Consultants