New rules on the installation of electronic communications are bad news for commercial occupiers

A new statutory code for electronic communications came into force in December 2017 which strengthens the rights of network operators to install and maintain electronic communications apparatus on private land and which restricts the ability of owners and occupiers to object. Jonathan Watts, commercial property expert with Forrester Sylvester Mackett explains the key provisions.

‘The government is committed to ensuring that everyone in society has access to the latest technological advances, including super-fast broadband. To deliver on this commitment it has introduced a new statutory code which will, among other things, support the installation of electronic communications apparatus, reduce the amount of rent operators will have to pay to do this, extend the period of notice that will have to be given requiring apparatus to be removed, and exclude the right of occupiers to seek additional payments where apparatus is updated, shared or sold on.  This is something that all private occupiers and landowners should be concerned about’, says Jonathan Watts.

Why the change?

 The new rules governing electronic communications, contained in the Electronic Communications Code set out in Schedule 3A of the Communications Act 2003, replace an earlier set of statutory provisions which were universally accepted as no longer fit for purpose because of their failure to recognise and deal with the way technology has evolved over the past 30 years and the confusing way in which they were drafted.

Are existing agreements affected?

 The provisions of the new code only apply to agreements entered on or after the date on which the new code comes into effect, and transitional provisions mean that in many cases a modified version of the old code will apply to existing agreements.

If you have an existing agreement, you should not agree to enter a new agreement now that the code has come into effect without taking legal advice.

Voluntary or mandatory?

 There will still need to be an agreement between the network provider and occupier to permit the installation of electronic communications apparatus.  However, where a network operator believes that it is in the public interest that an installation should take place, but the occupier refuses, it will be possible for the court to impose an agreement provided the following conditions are met:

  • the prejudice caused to the occupier or other relevant person making the objection is capable of being adequately compensated by money;
  • the public benefit likely to result from the network operator being allowed to do what it wants – including the benefit derived from providing the public with a choice of high quality electronic communications services – outweighs any prejudice; and
  • there is no credible evidence to suggest that any intended redevelopment of all or part of the affected land, or any neighbouring property, would be prevented if an agreement was made.

Key provisions

 Other than the right to ask for a court-imposed agreement, further key provisions of note include:

  • exclusion of the right to contract out of the code, which means that although operators and occupiers remain free to negotiate agreements on whatever terms they consider appropriate, underpinning those negotiations must be the provisions of the code;
  • a change in the way payments made to occupiers for the installation of apparatus are calculated, the upshot of which is that rent levels will reduce;
  • a prohibition on attempts by an occupier to prevent a network operator from assigning their rights to installed apparatus or insisting that, where assignment takes place, an additional payment (over and above the agreed rent) must be made;
  • a prohibition on attempts by an occupier to prevent or limit the ability of a network operator to upgrade or share access to apparatus – provided there is only minimal adverse visual impact and no additional burdens for the occupier – or to insist that the upgrading or sharing of apparatus can only take place if certain conditions are met, including the payment of additional fees;
  • the imposition of a minimum 18-month notice period where an occupier wishes to end an agreement; and
  • restrictions on the grounds on which termination rights can be triggered, so that steps to bring an agreement to an end can only be taken if the network operator is in breach of contract, the court has imposed an agreement in circumstances where it should not have, or redevelopment of the land or surrounding area is intended and cannot go ahead while the apparatus remains where it is.

Termination provisions in more detail

The termination provisions have raised a lot of eyebrows and are of significant concern to occupiers and landowners who are worried about their ability to regain control of land if they need to.  They therefore warrant further consideration.

To get apparatus removed under the new code, the occupier must first make sure the agreement has ended.  The termination process requires at least 18 months’ notice, which must be given by the person who entered into the agreement or by a person to whom they have transferred their interest in the land.  If no notice is served, the agreement will continue, even if the contractual term has finished.

If the occupier serves notice to end the agreement, this can either be accepted by the network operator or met with a counter-notice indicating an intention to object and apply to the court for an order allowing the agreement to continue.   It will then be up to the court to decide whether this should be granted.

So, what happens if the land is tenanted or occupied under a licence and the landowner wants their property back?  This is a difficult question to answer because agreements entered with a tenant or licensee will not bind a landowner unless they have agreed to be bound.  However, this does not mean that a landowner can simply ignore the agreement and somehow compel removal of the apparatus.

Unless the landlord can prove that the apparatus is no longer in use as part of an operator’s network, they can only serve notice requiring removal when there are no continuing rights in respect of the apparatus subsisting under the terms of the code and they are satisfied that the agreement has been terminated.

There is an exception if the occupier has granted rights under the code unlawfully, for example where the occupier’s lease or licence prohibits this.  Prohibitions like this are increasingly common, to protect landowners’ rights to get vacant possession of their land but, as with termination, if the operator objects to removing their apparatus they can apply to court.

For further advice on how the Electronic Communications Code will affect you, or for any other commercial property matter, please contact Jonathan Watts on 01249 444300.

The contents of this article are for the purposes of general awareness only. They do not constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.

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