Lease Renewal

With many leases granted 15 or 20 years ago, a large number of them are about to or have expired. If not contacted already, the operators will be approaching their landlords keen to renew their agreements using the provisions of the new Code to achieve greater rights and lower rents.

Within the telecoms industry there are generally three types of telecoms lease renewals, depending of the type of agreement being used.

Unprotected leases and licences over ‘Land’ encompass many typical Greenfield and Rooftop sites. Being ‘Land’ for the purposes of the new Code, the lease is renewed via an application to the Upper Tribunal and valued in accordance with the new Code, which adopts a ‘No Scheme’ or ‘No Network’ scenario.  As such, the use of the site for telecoms must be ignored and only the most valuable alternative use for the site can be assessed.

Where renewing an existing agreement that is protected by the Landlord and Tenant Act 1954 (LTA1954), the renewal will typically be conducted in accordance with the LTA1954 via the County Court. The valuation may still be hit by the new lower valuation regime of the new Code even though the market value approach of the LTA1954 does adopt the No Network assumption. However, where it can be shown that there is competition for the site (including from a Code Operator) it might be possible to agree a higher rent – as was the case in a matter (the Hanover Case) where Tom Bodley Scott was appointed as the Landlord’s Expert Valuer.

Site Share agreements (covering landlord owned masts/towers) are generally not subject to the new Code, as the equipment is located on Electronic Communications Apparatus (ECA), something the new Code does not define as Land. Consequently, the terms of Site Share agreements attract a greater degree of freedom of contract and higher rents.

Batcheller Monkhouse can help navigate the various procedures and work with your solicitor to renew the agreement, or use one of the grounds to deny the operator the right to renew.

Please contact a member of our telecommunications team on the right-hand side for further advice.

Offices in Battle, Haywards Heath, Pulborough and Tunbridge Wells.