Consideration payable when telecoms lease renewals are unprotected

Insight shared by:

Gateley Hamer

Having given evidence in this particular case, it is positive to see the consideration awarded by the Tribunalis close to my assessment (£3,300 p.a. for a water tower, including cost of managing access and incorporating a rolling tenant's break from day 1).

Key takeaways to note are:

  • The Tribunal clearly feel it has given sufficient guidance on the level of consideration it expects to award for imposed Code agreements for rural greenfield sites (£750 -£1,200 pa), residential / commercial rooftops (£3,800 -£5,000 pa depending on whether disturbance of future upgrades are accounted for within the annual consideration), and other structures such as water towers (c. £3,000 pa).
  • The Tribunal seems doubtful as to whether consensual Code agreements can be relied upon as comparable evidence because they "are invariably entered into so that a site can be used in connection with an operator’s network [so using them would offend the no-network assumption]; they are routinely accompanied by capital payments [see Pippingford decision last week]; they do not carry statutory compensation rights and rarely include a comprehensive contractual alternative".
  • Whilst deals on the whole may not provide reliable comparable evidence, where a three-stage assessment has been undertaken and both parties have attributed a specific value to a particular type of burden or benefit, their agreement on that component may nevertheless provide a useful referencepoint.
  • It seems clear that the Tribunal does not consider one-off capital payments that may be paid to incentivise an unwilling site provider to agree a consensual Code agreement should be factored into the assessment of consideration for an imposed Code agreement.
  • I get the impression that the Tribunal is getting fed up of hearing detailed three-stage assessments..... at Para 41 it explains: "the parties, who are both assumed to be willing to enter into the transaction, would simply come to a figure afterfairly broad-brush negotiations which might involve some discussion of the total cost of running the site but would be most unlikely to go beyond headline figures".I have to agree with that analysis, although (in my defence, as one of the experts in the case who is guilty of undertaking the 'exhaustive approach'the decision references!) I'm also not sure how well received I'd have been if I'd simply disregarded the granular detail I was provided with!

Gateley Hamer is regulated by RICS (Royal Institution of Chartered Surveyors)

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