The recent judgment in EE Limited (1) and Hutchison 3G UK Limited (2) vs. AP Wireless II (UK) Limited, concerns a telecoms site at Vache Farm, Chalfont St Giles, Buckinghamshire and promises a stronger negotiating position for landowners in telecoms lease renewals. Justine Ball provides a summary of the judgment and what this means going forward for landowners and site providers who host telecoms apparatus upon their land.

Case Overview

This case is a welcome legal decision in 2024, marking a shift in the balance of power between telecoms operators and landowners and site providers.

In summary, the ruling provides landowners with the benefit of obtaining higher rents and a greater opportunity for the insertion of a redevelopment break into a renewed telecoms lease.

Improved Rental Income

The Tribunal in this case granted the site provider a higher than expected rent under the renewed telecoms lease. The Tribunal placed much weight on inflationary rises over the last few years and the need to take this into consideration when setting rental values moving forward.

Here, the decision to raise the widely adopted rental rate from £750 to £1,750 per year for a greenfield site is a welcome development for landowners. Rural site owners, who have previously been at a disadvantage in rental negotiations, now have a legal precedent that supports a higher rental value.

What is more exciting is that this ruling could be the gateway for higher rents across the piste – i.e. not just for rural sites, but for other types of sites also such as rooftops, industrial and those in urban areas.

Redevelopment and Regeneration

For those landowners who are developers, or who are considering development in the medium term, this case also assists with maintaining flexibility for the future.

In summary, the Tribunal ruled in favour of the site provider granting a right to terminate a telecoms lease early in the event it wishes to redevelop during the term of the lease. In this case, the site provider would be permitted to bring to an end the telecoms lease after the first five years of the term if it could show an intention to redevelop.

The novel point decided in this case is – provided that the intention to redevelop is genuine, redevelopment could include telecommunications use (i.e. the landowner could build a new mast). This would be of particular benefit to infrastructure providers (like AP Wireless in this case which is often granted long leases by landowners of a mast site) who could look to terminate a telecoms agreement, build their own mast at the site and negotiate new leases with the operators for higher rentals.

Overall, this assists those landowners or site providers with their own ambitions for redevelopment and regeneration and wish to retain control and future proof their sites.

Enhanced Negotiating Position

Overall, the judgment puts landowners and site providers in a far stronger negotiating position. The increase in potential rent, coupled with the ability to secure better terms that accommodate future redevelopment, tilts the balance of power towards the landowner. This allows landowners and site providers to ask for higher rents and better terms, thereby protecting their long-term interests.

The ruling sends a clear message to not settle too early in rental negotiations. Landowners should seek professional advice before entering into any agreements, especially with this new benchmark in place.

This is crucial to ensure landowners make informed decisions not just about rent, but to protect their medium to long-term interests. Consulting with experts can help landowners navigate potential risks and understand the implications of the new benchmark. The potential for increased rents and better lease terms makes it imperative to have expert guidance to navigate these.

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Published: 31st July 2024
Area: Real Estate & Planning

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Justine enjoys engaging and working with her clients to successfully realise their aims in relation to their property issues.

Justine is an efficient and proactive lawyer who always goes the extra mile for her clients. She handles the full range of disputes that can arise in respect of property interests. She has a broad client base ranging from retail tenant clients, developers and corporate landlords/landowners.

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