Rules are becoming clearer as work progresses on upgrading mobile network, reports PAI's Telecoms Service Lead Mike Reid of Galbraith.
The UK Government introduced the new Electronic Communications Code in December 2017 to make it quicker and cheaper to roll out new telecommunication sites and upgrade old ones. These objectives have not been achieved as the mobile operators took the opportunity to, in some cases, try to reduce rents by over 95% which was met with resistance from landowners, so a period of stalemate set in.
Cases were taken forward to the Lands Tribunal for Scotland and the Upper Tribunal (Lands Chamber) for English and Welsh cases. We have seen more tribunal cases in the three years since the new code came in than under the previous 30 years but we are starting to see clarity on some aspects of the new code.
Three-stage approach to assessing rental values
On Tower UK Limited V J H & F W Green Limited 2020 (the Dale Park Case) was the first to consider the renewal of a rural mast agreement in England. The tribunal adopted a three-stage approach to assessing the rental value taking into account the individual characteristics of the site:
Stage 1 – Assess the alternative use value of the site
This site was in woodland on a rural estate with an estimated alternative rental value of £100/annum. However, where a site has genuine prospects for an alternative use, such as a yard or car parking, a higher figure may be appropriate.
Stage 2 – Consider the additional benefits to the tenant
There were specific benefits to the tenant granted in the lease, such as entering onto the landowner’s other land for temporary works, rights to install an emergency generator and to carry out trimming to the landowner’s trees. The tenant also benefited from a rolling break clause after five years. The Upper Tribunal awarded £600/annum for these rights.
Stage 2 highlights the importance of agreeing the specific lease terms in conjunction with the site payment and not separately. Different lease terms or other circumstances would result in a different stage 2 figure.
Stage 3 – Consider the adverse effects on the landowner
In this case, these effects included the impact of third party access into the heart of a rural estate in close proximity to let residential properties, the occasional use of a temporary generator, increased access during upgrading activities and loss of amenity from the mast itself. The tribunal awarded £500/annum for these impacts but other sites may vary depending on their individual circumstances.
The three stage assessment produced a rent of £1,200/annum, and while applying the same approach to other sites would result in a different figure, this does start to set a benchmark for other sites to follow.
In reaching its conclusions, the Tribunal recognised that the level of a consensual rent might feasibly be double that of a strictly no-network assessment allowing for an element of incentive given to the landowner and to avoid the cost of formal proceedings.
The Dale Park case may help some parties move closer to a consensual agreement but with Tribunal cases ongoing and the Government consulting on whether further changes are needed to the code, full clarity on code agreements is still some time away.