Navigating Telecom agreements: landlords beware

What is a Telecommunications agreement?

A telecommunications agreement, sometimes known as a wayleave agreement, is a contract between a service provider and a landowner which allows the service operator access to install its apparatus and infrastructure over or under the privately owned land, in return for wayleave fees, or rent.

These types of agreements are subject to Communications Act 2003 (the Electronic Communications Code), which under Schedule 3A grants the operators extensive statutory rights – such as rights to:

• install the apparatus on, under or over the land;
• keep installed the apparatus on, under or over the land;
• inspect, maintain, adjust, alter, repair, upgrade or operate the apparatus;
• share with another operator the use of ECA which the first operator keeps installed on, under or over the land; (.
• carry out works on the land for or in connection with the installation of the apparatus on the land or elsewhere;
• carry out works on the land for or in connection with the maintenance, adjustment, alteration, repair, upgrading or operation of the apparatus on the land or elsewhere;
• carry out any works on the land for the purposes of, or in connection with, sharing with another operator the use of apparatus which the first operator keeps installed on, under or over the land or elsewhere;
• enter the land to inspect, maintain, adjust, alter, repair, upgrade or operate any apparatus which is on the land or elsewhere;
• connect to a power supply;
• enter the land for the purposes of, or in connection with, sharing with another operator the use of apparatus which the first operator keeps installed on, under or over the land or elsewhere;
• interfere with or obstruct an access; or
• lop or cut back vegetation that may or will interfere with the apparatus.

Terminating the agreement

The Code gives operators security of tenure rights similar to those set out in the Landlord and Tenant Act 1954. This means that the process of terminating an agreement is complicated and could jeopardise a landowner’s redevelopment plans, for example.

The landowner must give at least 18 months’ notice to the operator to terminate the agreement, relying on at least one of the following four grounds:

1. intention to redevelop the property;
2. substantial breaches of the agreement by the operator;
3. persistent delay by the operator in paying rent; or
4. the operator is not entitled to the code agreement because the test under paragraph 21 is not met.

Why are telecommunications agreements risky?

Operators are granted code rights even if an agreement does not actually state this to be the case. Landlords could therefore inadvertently be agreeing to severely limit their ability to deal with their own property if the wayleave agreement is not negotiated properly, with some of the operator’s rights limited where possible, and a fairer balance for both parties is reached.

If you have been contacted by a telecommunications company seeking a wayleave agreement, take some time to consider this and speak to professionals who can guide you through the process. For advice on telecommunications and wayleave agreements, you can contact our commercial real estate team here.