Farmers with a telephone mast on their land have a short window in which to review the terms of rental agreements before new regulations come in which could disadvantage them. Robert Paul, telecoms specialist at Strutt & Parker, offers his advice.
The new Telecoms Code, currently being debated in Parliament as part of the Digital Economy Bill and likely to come into force in spring 2017, looks set to result in radical changes for mast agreements.
Strutt & Parker
- Site providers and operators are currently free to negotiate a market rent for a mast. The new Telecoms Code is likely to end this – landowners will instead be paid on the basis of compensation. This is likely to lead to much lower rents.
- The average annual rent deal is £6,029, according to Strutt & Parker’s 2016 Telecommunications Survey. It is unclear how far rents will fall once the new rules are in place, but the government has suggested 40%. Operators are already known to be approaching landowners seeking site leases on very operator-friendly terms and in some cases offering rents well below market value.
- Most current leases restrict the right to share sites with other operators, assign leases and upgrade equipment because of the potential impact on the land. The proposed Bill will give operators rights to do any of this without either further payment or the need for landlord’s permission.
- Negotiating a new lease or agreement now will avoid some of the more contentious issues in the new legislation. There is no guarantee that every lease will be protected, but it will put site providers in a much stronger position. Landowners who leave it until next year will be in a much weaker position.
- The process normally takes six months, so this is the final window of opportunity to start negotiations. Take professional advice before agreeing to any changes.