Electronic Communications Code (the Code) and the Landlord and Tenant Act 1954 (the Act)
Since the current version of the Code came into force in December 2017, there have been an increasing number of decisions from the Property Tribunal which has jurisdiction to determine disputes relating to the Code and the Code rights operators are seeking to impose on landowners and occupiers as site providers where electronic telecoms apparatus has been or will be installed.
The Code was amended to facilitate the Government’s minimum target that by 2025, 85% of the UK will have access to superfast broadband and 95% will have 4G coverage and assist with the rollout of 5G. So far, this has not proved to be the case.
Under the previous Code, an agreement allowing for the installation of telecoms apparatus could be a lease with renewal rights under the Landlord & Tenant Act 1954 (the Act) and also a Code agreement. This caused complications when it came to renewal as the provisions of the Act do not coincide with the renewal rights under the Code. To remove this complication, since December 2017 the Act no longer applies to new agreements relating to telecoms apparatus, including rooftop masts, but in some situations, the Act may still apply to agreements granted before December 2017 where the fixed term has expired and the operator has remained in occupation. In addition to telecoms providers, such as EE, O2 or Vodafone, operators now include infrastructure providers, such as Cornerstone Telecommunications Infrastructure Limited (CTIL) which has made a number of applications to the Tribunal in its efforts to retain and install telecoms apparatus in, on or under buildings, particularly in London and other urban areas.
CTIL was seeking more favourable terms than granted under the previous agreement which included additional Code rights and paying much lower consideration for the term of the new agreement.
On appeal, the Court of Appeal recently confirmed that an operator under the Code, which was already in occupation of property and holding over under a tenancy agreement granted before December 2017 and protected by the Act, could only seek renewal under the Act, by making an application in the county court. The Tribunal decided it had no jurisdiction to consider the application to impose a new agreement on the site provider and could not grant new Code rights to CTIL.
The Court of Appeal confirmed that where an operator was already holding over under the Act, where the contractual term had expired, the operator could only apply for a new tenancy agreement under the Act rather than a Code agreement.
This was significant to the landlord as site provider, as it meant that the valuation principles under the Act applied, meaning that the consideration payable under the new agreement would be assessed by reference to open market value of the site, rather than the much lower consideration payable under the Code. The no-network assumption applies to Code agreements which strips out the value attributable to the intended use of the site as part of a telecommunications network. It meant CTIL had to pay more for a new agreement and also that the terms would be the same as those of the expired agreement.
The Court of Appeal also confirmed that an operator who wants to vary Code rights during the contractual term of an agreement with a site provider can only do so by reaching agreement with the site provider either to vary the existing agreement or by entering into a new agreement. If the site provider is unwilling to agree to give modified rights, the operator is bound by the existing agreement while it remains in force.
The Code will apply to any agreements granted since December 2017 in relation to the installation of new apparatus, even if a lease is granted, as the Act no longer applies to new arrangements. The Code will apply and the level of consideration an operator has to pay for a new agreement will be nominal, determined on a similar basis to land which is being compulsorily purchased.
The Department of Culture Media and Sport has consulted on changes to the Code as the Government and wants to address the reluctance of site providers to negotiate with operators for the installation of telecoms apparatus. Thee indications are that it wants to simplify the process to make it easier for operators to do so. This means that potentially, it is going to become more difficult for site providers, being occupiers and tenants and owners of commercial and residential property to resist the installation of telecoms apparatus in, on or under their properties or land.
Should you like further information or advice on the Code, please contact Lesley Robinson at email@example.com.