The Lands Tribunal for Scotland recently delivered its decision in the case of On Tower UK Limited v David Stephen McLean and Monica Anne McLean ("the McLean case"), confirming the application of the Vache Farm decision to negotiations for rural telecoms mast sites in Scotland. We wrote about the implications of the Vache Farm decision in a previous blog and, whilst it was noted that the decision was significant for landowners, a Scottish decision confirming its applicability was awaited. The McLean case has now confirmed this.
Background
The case considered an application by On Tower to impose a new agreement under the Electronic Communications Code ("the Code") on the landowners to replace an expired agreement.
The parties were unable to agree on a number of the terms of the new agreement including, amongst other matters, the rent for what the Tribunal described as an "unexceptional rural site". Evidence was led on behalf of On Tower proposing an annual rent of £850 per annum based on the three stage approach of a nominal rent for the area, the value of the benefit to the operator and the adverse effect of the site on the landowner. The Tribunal noted at the time the evidence was led this was the familiar approach for sites of this nature.
Vache Farm
The Vache Farm decision was published following the evidential hearing, but the Tribunal noted that the decision was relevant to the core valuation issue in the McLean case and therefore decided to give significant weight to the decision in their consideration of the rent provisions.
The Tribunal also noted that the level of analysis given to the calculation of the figure of £1,750 per annum which was ultimately imposed in Vache Farm meant that site specific points could then be considered to decide whether or not to depart from the Vache Farm figure. Effectively, the Tribunal has now agreed that the rent of £1,750 per annum imposed in the Vache Farm decision should act as a "floor" rent for rural mast sites. This marks another significant shift in favour of site providers as the Tribunal has now effectively confirmed a minimum rent that will be applied in the case of agreements imposed under the Code by the Tribunal.
Decision
By applying the "floor" figure of £1,750 per annum imposed in the Vache Farm decision, the Tribunal were able to consider the likely impact of the remainder of the agreement on the landowners in the McLean case and due to the specific aspects of the proposed agreement imposed a rent of £2,000 per annum in the circumstances. This again highlights that whilst the Vache Farm decision imposed a rent for that specific site, the Tribunal will consider the specific provisions of an agreement in light of the "floor" figure and uplift the rent as necessary.
Implications
The McLean decision is another positive decision by the Tribunal in Scotland, confirming the applicability of the Vache Farm decision and clarifying that the rent imposed in Vache Farm is a "floor" on which uplifts can still be applied.
If you are an operator, infrastructure provider or landowner dealing with telecoms agreements, or you have any concerns or questions about the impact these issues may have on you or your business, please do not hesitate to get in touch with our Telecommunications lawyers or your usual Brodies' contact.
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