Phone Masts on Private Property: What Landowners Should Know – Part II

The Electronic Communications Code 2017 (“the Code”) governs the installation and maintenance of telecommunications apparatus, such as telephone masts, on privately-owned land. It has significantly changed the relationship dynamic between landowners and telecoms operators. Part One of this series explored the Code’s overarching impacts. In this Part Two, we will delve deeper into the nuances of Code rights, the termination of agreements, and key considerations when negotiating with operators.

Negotiating Code Leases

Code rights – being rights to install and maintain telecoms infrastructure such as phone masts and cables – are usually granted via leases between landowners and operators.  The operator will approach a landowner with heads of terms, which will set out the key terms and conditions of the deal.  Navigating the intricacies of the Code can be a daunting task, so the first and most important step is to seek expert advice.  It is common practice for operators to cover some or all of a landowner’s costs in appointing a land agent/valuer to review the proposed commercial terms and instructing a solicitor to progress the legal drafting.  By signing a set of commercial terms without receiving expert advice, landowners are immediately placed on the backfoot in lease negotiations.  Taking expert advice will ensure that you are making informed decisions and negotiating from a position of relative strength.  

The next step is agreeing the lease.  Although the definition of a lease is met (parties, property, rent, duration and exclusive use) telecoms operators often avoid using the term, as well as the words ‘landlord’ and ‘tenant’ in their style documentation.  The most likely reason for this is to emphasise that their rights are established and protected by statute, as opposed to the more variable terms of traditional leases.  Indeed, many operators will simply inform landowners in the first instance that the code agreement is their standard form of document and cannot be amended.  Nonetheless, the agreement is still a lease, and landowners should take legal advice to know exactly what they are signing up for.

Tribunal Orders

Sometimes negotiations between landowners and operators fail to yield an agreement.  In this instance, the operator will issue a ‘Paragraph 33 notice’ to the landowner.  If the landowner does not respond within 6 months, the operator can ask the First-tier Tribunal to issue an order automatically granting the Code rights.  As new telecoms infrastructure, particularly 5G masts, is viewed by the government as being in the public interest, the Tribunal is likely to side with an operator.  To prevent the Tribunal from imposing an agreement, a landowner must prove that the prejudice to them outweighs the public benefit.  Recent Tribunal judgments have shown this is a very high bar to pass.

Landowners have no control over a lease which is imposed by Tribunal orders, and this will almost certainly be less favourable to their interests than a voluntary agreement.  By engaging with operators at the outset, who want to conclude matters as quickly as possible, landowners will find the operator is more likely to ‘sweeten’ the deal.

Interim Code Rights

Operators can apply for interim code rights if negotiations for a voluntary lease or amendments to an existing lease are prolonged.  They must first demonstrate that access to the land is necessary for the provision of a communications networks or service.  This means the phone mast can be operated whilst lease negotiations are ongoing.

Impact on Neighbours

If the mast interferes with or obstructs a neighbour’s means of access to or from their land, then they can ask for it to be removed (if they are not also bound by the same Code rights). Under the Ofcom Code of Practice, operators are obliged to negotiate access arrangements with a neighbouring landowner, where use of their land is required for constructing and/or maintaining the site.  Any other person with an interest in land adjoining the site may also need to be consulted, depending on the circumstances.  In the first instance, you should speak to your neighbour directly to ascertain if any issues might arise. 

How are Code rights terminated?

Among the key changes introduced by the Code, one critical aspect is the termination of agreements. The procedure is not straightforward and involves several steps:

1. The Landowner must serve at least 18 months’ notice on the operator. This period acts as a buffer, allowing operators time to adapt and reconfigure their networks as needed.  Landowners should be aware of these timescales, as they will likely delay their future for the land.
2. Unlike a standard commercial lease, the notice must provide an adequate reason that the lease should be terminated.  Agreements can only be terminated if (i) the operator has substantially breached its contractual obligations (such as non-payment of rent); or (ii) the landowner/site provider intends to redevelop all or part of the land to which the code agreement relates, or any neighbouring land, and could not reasonably do so unless the agreement comes to an end. There is a a high burden of proof for landowners to justify termination, and operators can challenge any termination notice.
3. If a lease is successfully terminated, there is a separate process for the removal of equipment and apparatus from the landowner’s property.  The operator is responsible for dismantling and removing any infrastructure they installed, and restoring the land to its original state.  Landowners enjoy stronger protection here relative to the rest of the Code.

How can Davidson Chalmers Stewart help?

If you’ve been approached by a telecoms operator and are unsure what to do, please reach out to Henrietta Talbot or James Elliott for an initial conversation.  Davidson Chalmers Stewart have a track record in getting the best deal possible for landowners.  We understand the challenges you face and can guide you through every step of the process.

Disclaimer 
The matter in this publication is based on our current understanding of the law.  The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers Stewart LLP does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication.