Electronic Communications Code – issues for landowners

The Electronic Communications Code came into force on 28 December 2017 and was introduced by the Government as part of a range of measures intended to improve the UK’s technology infrastructure.

The new Code replaces the previous Telecommunications Code and grants statutory rights to telecoms operators to install, maintain and keep the equipment they use in the provision of their networks. This is a brief outline of the changes introduced by the Code and why these are of significance for landowners.

Rights

Operators’ rights under the new Code have improved significantly compared with their rights under the old Code. Operators now have the automatic right to assign their Code rights to third parties without the consent of the landowner. Any contractual provisions to the contrary will be deemed void and unenforceable. This means that it will be more difficult for landowners to identify the current operator occupying their property at any one time.

The new Code grants operators the automatic right to share their sites with other licensed operators and to upgrade their apparatus without the consent of the landowner – again, any contractual provision to the contrary will be void. Also, the statutory ‘lift and shift’ rights reserved for landowners under the previous Code have been removed.

Security of Tenure 

The new Code provides clarification in relation to security of tenure by confirming that telecoms operators can no longer benefit from protection under the Code and the Landlord and Tenant Act 1954 Act simultaneously. If the contractual document is one whose primary purpose is to grant code rights, it will not be protected by the security of tenure provisions in the 1954 Act. However, such agreements will instead be protected by the termination procedure set out in the new Code.

If a landowner wants to terminate a Code protected agreement (even if the contractual term has already expired) it must now give at least 18 months’ notice to the operator and specify one of the available statutory grounds for removal of the operator’s apparatus (such grounds include the landowner’s intention to redevelop all or part of the site provided that such redevelopment could not reasonably be done unless the code agreement ends).

The operator then has three months to serve a counter notice on the landowner and apply to the court for an order to allow the agreement to continue. In such situations, it will fall on the landowner to convince the court that the relevant statutory ground for termination has been made out. If the court finds in the operator’s favour, the protection of the Code continues and the apparatus can remain in situ. The termination process set out by the Code is therefore likely to take more than two years.

Rents

The new Code will limit landowners’ abilities to charge premium rents for operators’ use of their property. This is because under the new valuation scheme introduced by the Code, courts will assess the market value of the land without considering the value of the site to the operator. Given that sites which are usually subject to telecoms agreements are small in area (eg. parts of roof space) and of little value to the landowner as vacant space, it is likely that operators will push for lower rents when renewing and negotiating new agreements with landowners.

Comment

The new Code substantially strengthens the position of operators. Although this is may be beneficial to our phone coverage and internet speed, it will cause increased concern for landowners with telecoms apparatus on their land. It is therefore important that landowners obtain advice before agreeing any terms with operators, either on the renewal of existing agreements or for new sites.

This blog was written by Real Estate solicitor Joshua Saxton.