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Telecoms Operators Fail to Renew Mast Agreement Using The Code

On 8th November 2019, a decision was made in case of CTIL v Ashloch Limited and AP Wireless II (UK) Limited [2019] UKUT 0338 (LC) which looked at the extent of an operator’s powers to impose agreements under the New Code where they already occupy a mast on site.

CTIL sought to use their powers under the Electronic Communications Code to secure a new agreement, but the decision concluded that CTIL had been misinterpreting the complex legislation and could not enforce a lease renewal in the way they wanted.

Commercial leases are protected by the Landlord and Tenant Act 1954 (54 Act) which gives tenants a right to apply to renew leases when they expire. Unless a lease has been “contracted out” of these rules, the 54’ Act may apply to any telecoms leases before December 2017. In this case, CTIL applied to renew the lease under Code rules, but the Tribunal decided they must renew under the 54’ Act instead.

The 54’ Act offers some advantages to landlords over the Code. For example, rent under a 54’ Act renewal is closely linked to open market rent rather than “consideration” which the Code uses. The terms of the new tenancy will also be based off the existing lease rather than starting afresh with the operator’s template.

Even where the 54’ Act does not apply, this ruling also clarified that operators can’t simply apply for a new lease when the old one ends, instead they must make an application to vary the terms of the existing agreement rather than applying for a new agreement altogether.

Although this decision may not help landowners who want to get rid of a mast, it does allow negotiations to start from a much stronger starting position and should see a much more favourable approach taken to rent negotiations.

[team-member name=”Chris Thyer”]

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