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February 22, 2018

The New Electronic Communications Code: Key points for landowners

A new Electronic Communications Code came into force on 28 December 2017, the rationale behind which is the improvement of telecoms operators’ networks, infrastructure and connectivity.

The new Electronic Communications Code grants certain rights to operators (“Code Rights”), including installing, maintaining, upgrading and operating apparatus and connecting to a power supply. These rights can be acquired either by entering into an agreement with a landowner/occupier or by an agreement imposed by a Court order.

Written agreement

An agreement needn’t be in the form of a lease, and whilst Ofcom is obliged to produce standard terms, it is optional whether to adopt these. It is also worth noting the following:

  • other than requiring an assignor to guarantee an assignee’s obligations, restrictions on assignment are void. Landowners therefore have no control over the assignment of such agreements, which is a concern;
  • leases containing Code Rights now fall outside of the ambit of the Landlord and Tenant Act 1954;
  • terms which seek to exclude or are contrary to the Code are not enforceable; and
  • an agreement entered into by an occupier will not necessarily bind the freeholder.

Agreement by Court order

In such an agreement, the consideration is based on a “no scheme” market value which ignores the site’s value to the operator and, arguably, could result in a lower rent. It is also worth noting that a Court cannot make an order if there is an intention to redevelop, which could not reasonably be carried out if the order were made.

Other matters of note

Code Rights include sharing apparatus with other operators provided they comply with certain criteria. Terms which seek to restrict this (including requiring consent) are void. Landowners, therefore, may be unable to gain extra income from entering into additional agreements with further operators.

Any existing agreements granted subject to the previous 1984 Code are subject to transitional provisions, so the new Code will apply to them but with modifications.

Also, note that Code Rights needn’t be registered at the Land Registry to be binding.

Termination

To remove Code Rights, a site provider must serve a minimum of 18 months’ notice from the expiry date of a Code agreement specifying a relevant ground, which includes an intention to redevelop all or part of the land or neighbouring land and which could not reasonably be done unless the Code agreement ends. If the operator objects, it can serve a counter notice within three months and apply for a Court order. The Court will then determine the matter. There is a separate procedure to remove apparatus, and different rules will apply depending on the circumstances.

The extra income to be gained by landowners from allowing telecom operators to utilise roofspace is obviously welcome. However, if there is any scope for future development, careful consideration is required as to whether the additional income is worth the potential difficulties further down the line in securing vacant possession.

Call property partner John Gillette today for more information on Code Rights and the electronic communications code.

Note: This is not legal advice; it provides information of general interest about current legal issues.

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