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Incentive Payments now contribute to market rents in a new telecoms case ruling

It has been over 4 years since the Electronic Communications Code was introduced, changing the negotiating game for those landowners who have mast sites. Over these years the new telecoms market has begun to emerge as new Code agreements are completed.

 

Similarly, we are seeing an increased number of negotiations ending up with the Courts who impose binding agreements on the parties. The most recent case relates to a rural mast site in Tunbridge Wells, Kent.

The Court case saw a dispute between EE Ltd and Hutchison 3G UK Ltd v R Morriss, D H Tayler and Pippingford Estate Co. referred to more generally as “Pippingford”. The Pippingford Estate is a small mixed rural estate situated about 10 miles south west of Tunbridge Wells. The mast is located within a woodland area of the Estate.

The old lease was protected by the Landlord and Tenant Act 1954 which supersedes the Code in some instances, but the case was decided ‘in the shadow of the Code’, so this does have some relevance for Code negotiations.

The Operators presented examples of new agreements at very low rents, but after a court order, it was revealed that a lot of these agreements included sizeable premium payments which hadn’t been disclosed. The Court factored in these premiums in awarding an annual rent of £3,500 for the new lease, significantly more than we have seen in previous rulings for rural masts.

It is largely accepted that telecoms companies need to improve the roll out of their communication networks to rural areas, especially in light of the Covid 19 outbreak. Court rulings such as the Pippingford case are helping to establish the new market for telecoms masts which may start to improve the public’s access to high speed phone and internet services. The award of the rent at £3,500 per year for a 10 year lease renewal is still a drop from a lot of historic rents, but is far better than many of the offers being made by operators which have been as low as tens of pounds a year.

If you have a site with a telecoms mast or are facing negotiations with a telecoms operator, please don’t hesitate to get in touch with Alice Bonas at GSC Grays who can provide you with expert advice.

Alice Bonas - GSC Grays

Article by

Alice Bonas
MRICS
Senior Surveyor

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