In the current economic climate when every penny counts, getting the best value from the little mast site in the corner of the field has never been more important.
Since the introduction of the Electronic Communications Code in 2017, methodology as to the approach for determining what the rent should be for the telecoms mast sites has been a point of contention between Operators and Landowners.
Operators pushed for the existing land use value approach which led to very low rents for sites in rural areas, whilst landowners argued for the comparable evidence approach, citing lettings of non-telecoms equipment as evidence of appropriate rental levels.
It has been reported that landowners across the country are understood to be down over £200 million a year as a result of the Code.
However, the case of EE Limited and Hutchinson 3G UK Limited v AP Wireless II UK Ltd provided some useful guidance as to the ‘correct’ methodology, albeit this is not particularly favorable to landowners.
The Tribunal confirmed that the use of comparable evidence relating to other telecoms mast sites should not be used to arrive at a valuation figure under the Code. Rather, the rent should be calculated by working out an appropriate ‘consideration’ amount for the site, based on the surrounding land use value, plus the value of any ancillary rights granted to the Operator (such as rights to access surrounding land), and finally adding a ‘compensation amount’ for any adverse effects on the landowner arising out of the mast.
This approach can be complex and requires careful consideration of the effects of the mast site on the landowner. Each mast site must be assessed on a case-by-case basis, as no two sites will ever be the same , so i t is crucial that landowners take professional advice when approached to renew a mast site lease.
Constructive negotiations with the Operator’s representatives typically results in a much better outcome for the Landowner, securing incentive payments and other benefits seldom conceded in a Tribunal. And professional fees are also usually paid by the Operator in an effort to reach a consensual agreement.