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The new legislation governing telecoms equipment known as the Code came into effect on 28th December 2017. Since then most landowners will have been bombarded with a plethora of articles each with a different take on its impact. Without a doubt one of the most talked about changes has been the amount of rent one receives for a mast so, we take a look at how it is unfolding in practice.
Consideration under the Code
The Code is designed to encourage both parties to negotiate fairly and reach a mutual agreement. If negotiations fail, either party can apply for the courts to impose an agreement for them.
If courts are instructed, the Code contains directions as to how they determine the agreements, which includes how much payment or ‘consideration’ is due to a landowner. The methodology is complicated but boils down to the market value of the agreement.
Consideration in practice
Since the rollout of the new Code GSC Grays have encountered some operators who are offering a mere £50 per year claiming that they only need pay for the agricultural value of a 5m x 5m plot. This is not what the Code says but they can be very persuasive and some landowners may feel pressured to accept drastic rent reductions if not properly advised.
What is important to realise is that the methodology in the Code only applies when a court writes an agreement: until that point, parties can agree whatever they like.
An interesting case in point is that we have only received offers in the region of £50 where an existing lease needs renewing and both parties are already tied in to one-another. When an operator wants a new mast and needs to get a landowner on side, they are offering thousands of pounds at the outset.
The new legislation has made telecoms masts a much more specialist field than it once was so Landowners or inexperienced advisors could unwittingly agree very poor terms. What is particularly concerning is that a bad agreement not only hurts the landowner, but it is likely to be used by operators as market evidence to reduce payments for everyone.
We are in a crucial period where every new agreement has the potential to dictate the future of the telecoms market nationwide. If you are approached by an operator seeking to reduce the payments for your mast please contact Chris Thyer at GSC Grays to ensure you are represented.
Chris Thyer is a Chartered Surveyor and undertakes telecommunication mast reviews at GSC Grays; he is currently supporting the Central Association of Agricultural Valuers in understanding the impacts of the new Code on landowners.
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