The modern regime Electronic Communications Code (Code) has been in force since December 2017. With additional legislative changes to the Code since then and a growing body of case law, industry expectations and key terms have changed. These are our top 5 tips for parties involved in renewing an agreement under the Code in the UK.
1. Check the status of your counterpart Operator or Landowner/Site Provider
It may sound odd, but checking the status of an operator is of utmost importance. An operator for the purposes of the Code (and therefore able to contract with a site provider or landowner under the Code), is one that is listed on the Ofcom Register of persons with powers under the Electronic Communications Code
For operators, checking the ownership rights of your landlord is of equal importance. In England & Wales, typically, title ownership both leasehold and freehold where registered can be done by a simple check of the proprietorship register at Land Registry. In Scotland, ownership can usually be checked in the Land Register. In both cases, unregistered land and leasehold interests may require a more in-depth investigation.
2. Rent
Rents have dramatically reduced since implementation of the Code. For more details on industry standard rents for different scenarios, please refer to our blogs on the topic. Each site should be taken at its own merit and specific to any sensitivities or commercial reality, which may impact valuation. Location and inconvenience of any relocation may also factor into negotiating the rent or premium payment. Specialist valuation opinion should be sought in advance of agreement.
3. Landlord and Tenant Act 1954 (LTA 1954)
The Code sought to eliminate security of tenure under the LTA 1954 (in England & Wales) from the Code agreements and renewals, because the Code introduced its own security of tenure regime. But, legacy issues remained specifically in renewals proceeding under the LTA 1954 in the county courts (rather than under the Code in the Lands Tribunal) and increased rent valuations.
Recent legislative changes with implementation of the Product Security and Telecommunications Infrastructure Act 2022 have sought to address these issues and confirm the "no network" assumption in rent valuation in a the Code agreement, thereby doing away with any LTA 1954 valuation methodology.
4. Key Terms
Lands Tribunal decisions have gone some way to determining standard terms for parties to work with for the Code agreements. In particular, the decision in Cornerstone v University of Arts London detailed key terms to an the Code agreement. As in all things, there is a push and pull; and each site and operator requirement must be dealt with on a case-by-case basis. One size certainly does not fit all! That said, we have key terms and a body of comparables in respect of rent. Specialist professional opinion from surveyors and lawyers on the rights and obligations of each should be sought.
5. Ancillary rights over land
Under the Code, there is an automatic right to operators to come and go over land to, for example, maintain and upgrade their telecoms apparatus and equipment. Assessing the impact of this might involve a bit of crystal ball gazing, given the often unlimited rights to share a site with numerous operators. Negotiating these rights should therefore not be left to chance. They can be formalised in the Code agreement itself or further agreements.
If you are an operator, site provider or landowner with concerns or queries about renewing a telecoms agreement or, how the recent changes in the law may impact you or your business, please do not hesitate to get in touch with our Real Estate Disputes team or your usual Brodies contact.
