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Getting the best rent out of your telecoms agreements

Getting the best rent out of your telecoms agreements

This judgment is good news if you have agreements with telecoms operators that are also protected by provisions of the Landlord and Tenant Act 1954 (“the 1954 Act”) as it has held the 1954 Act will prevail.  One of the consequences is that as a building owner you can now rely on the more favourable rent valuation provisions contained in the 1954 Act. This may well mean that, as landlords, you could secure higher rents.

In summary, the case of CTIL vs (1) Ashloch Limited and (2) AP Wireless II (UK) Limited involved the current operator in situ at the premises, CTIL, making an application to the Tribunal to try to impose a new Code agreement upon its landlord, by-passing the 1954 Act altogether.

This was firmly rejected by the Tribunal. CTIL could not go straight to the new Code.  They must first submit to a new tenancy under the 1954 Act.  They now have to wait for the contractual term of that new tenancy to expire before they can rely on the new Code which could be several years forward.  In the meantime they must submit to rents calculated according to the 1954 Act and not the new Code.

The Tribunal held CTIL should have commenced the renewal procedures under the 1954 Act and it was not entitled to invoke the provisions of the new Code.

A key feature of this case was the fact there was already a 1954 Act tenancy running.  Whilst there had been an (old) code agreement in place (between a predecessor of the current landlord/building owner and Vodafone Limited) it expired in 2012 a continuation tenancy under the 1954 Act had then immediately arisen at that point because Vodafone had continued in occupation. (Vodafone was then able to assign that tenancy over to CTIL).

Before going into negotiations with telecoms operators landlords/building owners should usefully spend some time checking the history of occupation of any of their sites as to whether or not they can rely upon this decision – particularly before rents are agreed.

We are seeing lots of activity in the Tribunal with new judgments coming through every month which have significant commercial consequences for landlords/building owners

Contact Martin Edwards on 0121 214 0340 martin.edwards@shma.co.uk or Justine Ball on 0121 214 0306 justine.ball@shma.co.uk get in touch with us to see if we can help you get the best out of your telecoms agreements.

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