With several key decisions made surrounding telecoms case law in recent weeks, we caught up one of our senior surveyors, Henry Mawhood, who works in our telecoms team to learn more about what all these mean for landowners and how, while the industry is moving in the right direction, there is more to be done.
As many will be aware, the Electronic Communications Code (ECC) was brought into force in December 2017 to deal specifically with telecommunications agreements. The impacts of the ECC have been far-reaching and in most cases, to the landlord’s detriment.
The market is currently in a transition phase from the ‘old’ code to the ‘new’, with the main differences being much lower payments being sought by operators due to a new valuation methodology, less restrictions on an operator to deal with the rights they are granted and almost unlimited equipment rights, as well as security of tenure which is so protective that it would seem a landlord can only recover vacant possession if they desired to develop the land.
There has been a plethora of case law since 2017 which have dealt with many of the disputes that the ECC has brought with it, but in recent weeks there has been some more positive news for landlords.
There have been several key decisions surrounding telecoms from the Upper Tribunal (Lands Chamber) ‘UTLC., the First Tier Tribunal ‘FTT’ and the Lands Tribunal for Scotland ‘LBS’.
Perhaps the most welcome part of the decisions was determining that inflation should apply to all previous tribunal decision rents from the date of the decision.
EE & H3G vs AP Wireless (July 29, 2024), known as Vache Farm, was particularly helpful for landlords, where the UTLC awarded a rent of £1,750 per annum, where the subject site was an unexceptional greenfield site with no obvious Alternative Use Value (AUV). This increase of £1,000 per annum has been gladly received in the market.
Vache Farm also awarded a landlord redevelopment break clause whereby the landlord may terminate by giving 18 months’ notice, expiring on the fifth anniversary of the term or any subsequent anniversary of the term commencement date, where the landlord intends to redevelop all or part of the site and could not reasonably do so while the lease continues.
This has been a heavily contested point between parties, and it has been refreshing for clarity on the situation and it allows for landlords to plan what they intend to do with their site and timescales they need to work to.
This was followed by the On Tower vs AP Wireless Ewefields Farm decision, released August 5, 2024, where the FTT determined the rent on 14 sites.
The rent on 10 of the sites was determined as £1,750 per annum, this was using Vache Farm as a benchmark. However, two of the decisions were determined at £2,000 per annum as ‘hope value’ was applied in one case due to options including EV charging and storage and the definition of ‘semi-rural’ in the other.
The final two sites were determined at £2,500 per annum and a definition of ‘grey field’ for one of these cases, creating an interesting new classification of a site, whilst the other site had planning for residential homes nearby and again ‘hope value’ was applied in this case.
This decision provides greater context and further strengthens cases where a landowner may look to apply hope value and a new site classification of ‘grey field’ for agents to use when determining the true value of a telecoms site.
The final decision was surrounding On Tower vs David Stephen McLean and Monica Anne McLean which was released September 4, 2024.
The LBS referred to the Vache Farm decision being the starting point for the rent due to the similar characteristics of the sites. However, the LBS allowed for unrestricted sharing of the telecoms mast with both code and non-code operators due to the business model of On Tower being a neutral operator who depends upon sharers. The LBS awarded a rent of £2,000 per annum.
Overall, the decisions have been pleasing, especially the thoroughness of the Vache Farm decision, and is a useful starting point. The response from the code operators is still being seen, and these decisions have rocked the market.
From a landowner perspective, they have presented much-needed comparable evidence in terms of different site types in similar settings, but with the addition of ‘grey field sites’ and ‘hope value’ also having weight when applied in the right circumstances, landlords have a little bit more leverage.
However, some landlords are still being short-changed. In the case of On Tower vs David Stephen McLean and Monica Anne McLean, it is questionable whether an additional £250 per annum for an infrastructure provider to have as many sharers as possible is the right reflection for the increased potential burden on the landlord and the earning potential for infrastructure providers with multiple sharers.
It has been a clear acknowledgement that the true beneficiaries of the ECC are infrastructure providers, and it feels like progress has been made, but there is plenty more work to be done.
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