BUSINESS LEGAL DISPUTE RESOLUTION

View All Dispute Resolution News

Telecoms Mast on Your Land Act in Haste – Repent at Leisure?

Owners of land and buildings around the country have found that having a telecoms mast on their property has provided regular rent. The amount is generally not substantial but it provided a good regular income. However, now some of the agreements are coming up for renewal many landlords are finding that what seemed like straightforward and easy money is now becoming a nightmare.

The reason for this nightmare is known as the Electronic Communications Code (“the Code”) set out in Schedule 2 of the Telecommunications Act 1984. The Code provides a further form of security to “operators” (the telecoms companies), defined as licensed providers of electronic communication services. The operators have attained this status by means of a direction under Section 106 of the Communications Act 2003.

What this means to the property owner (“the landlord”) is that the operators have an extra layer of protection when it comes to trying to seek possession of the land at the end of the contractual period.

Licensee or Tenant with Protection under the Landlord & Tenant Act 1954

The first issue the landlord must consider is whether a licence or tenancy has been entered into with the operator. The position is that very often a landlord will have found themselves signing a document which they considered to be a licence. Indeed it may state as such but when it has come to renewal the operators’ lawyers have pointed out that there is in fact a tenancy which has been established. In consequence it is protected under the Landlord & Tenant Act 1954 (“the 54 Act”). There is recent case law of Clear Channel vs Manchester CC (2006)1EGLR27 which indicated that where commercial parties are negotiating at arms length it is considered that they have both been well advised. Then the Court should not be quick to find that a party who has agreed a licence can later claim that in fact they have entered into a lease. So the landlord could decide to fight the assertion of a licence having been created on this basis.

What happens more usually is that rather than entering into proceedings on this point most landlords will accept that a tenancy has in fact been created and therefore the operator has protection under the 54 Act.

This immediately creates far greater protection than the landlord probably envisaged when entering into the agreement in the first place. In order to bring the tenancy to an end the landlord would now have to comply with the 54 Act procedures. A Section 25 Notice will have to be served upon the operator if an agreement cannot be negotiated. If the landlord wants possession then a Section 25 Notice will have to be served in any event.

Very quickly the landlord finds himself involved in proceedings which no doubt was never envisaged in respect of the simple document signed at the beginning of the term.

What makes the situation worse is that the code provides another layer of protection which strictly speaking is not compatible with the 54 Act.

The Code

The Code provides the operators with a raft of powers. In this article I will concentrate only on the issue in respect of possession after an agreement has already been entered into.

Section 20 & Section 21

Section 20 provides that if the landlord wishes to improve the site he must serve a notice on the operator to carry out the “proposed improvement” of the land.

“Improvement” is defined as including development and change of use.

“Alteration” is defined as including references to “moving, removal or replacement of the apparatus”.

Section 20 is therefore used to simply require either relocation of the mast within the existing site or its removal from the site.

The operator is provided with the opportunity to serve a counter notice which must be served within 28 days of the receipt of the landlord’s notice. If such a notice is served the landlord may apply for a Court Order to undertake the alterations which he envisaged. The Court will make the Order if it is satisfied that the alteration is necessary and it will not substantially interfere with any service provided by the operator.

The Court will not make an Order if it is satisfied that if the operator had made an application under Section 5 of the Code for a Court Order that they would be allowed to install equipment on the site without the consent of the landlord even if the landlords application would otherwise have succeeded.

A further point the landlord needs to note is that unless the Court concludes otherwise the landlord will be expected to reimburse the operator in respect of the expenses incurred in connection with the execution of the works.

Section 21 : Restriction on Right to Require Removal of Apparatus

The landlord will have to serve a notice on the operator requiring the removing of the apparatus. The operator has 28 days in which to serve a counter notice. If such a counter notice is served then once again the landlord will have to revert to the Court and obtain an Order to progress the matter.

If successful the landlord will not have to meet the costs of removal of the apparatus as a default position as is the case of Section 20.

The landlord must satisfy the Court that the operator is not serious about securing rights and has been dragging its feet, or that the proposed steps are futile.

Conflict between 54 Act and the Code

The Code states that to be able to serve the notice as the landlord they must be able to show under the Code that they are “for the time being entitled to acquire the removal”.

The problem is when exactly under the 54 Act the landlord can claim that he is entitled to require the removal of the equipment.

For the landlord to serve a Section 25 Notice he has to wait for it to expire. If the operator then makes an application to the Court as a tenant to ask for a continuation then the application will subsequently go to a final hearing to decide the matter. This means that the operator can argue that until the date of final disposal there is still a legally binding right imposed upon the landlord which prevents him from serving a notice under Section 21. However, at the date of the trial under the 54 Act the landlord would not be able to show that he can go into occupation or can redevelop because there is a subsisting Code protected occupier on site. On that basis the Code and the 54 Act neutralise each other so that strictly speaking the landlord would never be able to end the tenancy.

A practical way through this is for the landlord to argue that the Section 25 Notice has the effect of requiring removal is successful and an argument can be put to the Court that it is appropriate to serve a notice under Section 21 on the same basis.

It is only right to bear in mind that it is far from a perfect solution to the problem. The Section 25 Notice is not of itself a right to require removal. It is also an issue defining the action given the actual language provided under the Code. However it does at least provide the landlord with an argument that can be presented to the Court.

Clearly if the 54 Act is not applicable to the situation then the problem does not arise. As such the landlord can assist himself greatly by contracting out of the 54 Act in respect of any agreement entered into so that he does not get caught up in what is arguably an unsolvable position in the Courts.

It will not then be left to the Court to get the landlord out of what is arguably an impossible position. It is really on the basis that it must be envisaged that Parliament would not have intended to neutralise provisions under the 54 Act when passing the Code that provides a sustainable the argument for the landlord.

It must be said that any potential landlord must consider carefully the implications of entering into an agreement with an operator for apparatus to be installed on their land.

Lastly, as is briefly referred to in the article for those potential landlords that have taken the view they will simply not deal with any potential operators and deny all of them the right to install apparatus on their land, there is the ability under the Code for the operator to force a right to install their equipment under Section 5. The Code clearly provides the operators with a very powerful position. All potential landlords need to carefully consider their position before entering into any agreement with an operation as to act hastily without fully considering the implications can lead to real difficulties in the future.