Telecoms, where do Landowners now stand and how recent decisions in telecoms case law will impact landowners.

The telecommunications market in the UK is fast-paced, with the evolution of technology, a case law minefield, and a growing demand on landowners, which has made telecommunications a difficult property type to understand and navigate.

The Electronic Communications Code (The Code) was introduced in December 2017 to provide more statutory powers for operators to install, maintain, and operate their equipment on private and public land. The legislation aimed to make the rollout of electronic networks easier, in order to facilitate the building of robust networks.

A key part of the 2017 legislation is the valuation mechanism for determining rents. The Code is based on a “no network assumption” model, which means that the rent for hosting telecommunications equipment on private land is based on the value to the landowner, without considering the presence or benefit of the equipment. This has resulted in lower rents paid by operators, being more in line with rents paid by utility companies.

Since the December 2017 inception, over a thousand disputes have been brought to courts and tribunals. This has presented a large body of case law for landowners to try to decipher and understand how this constantly changing market might impact them.

Over the last year, there have been several important decisions made by the Upper Tribunal (Lands Chamber) ‘UTLC. and the First Tier Tribunal ‘FTT’.

The most welcome part of these decisions was determined that inflation should apply to all previous tribunal decision rents, from the date of the original decision.

EE & H3G vs AP Wireless (July 29, 2024), referred to as Vache Farm, was beneficial for landlords, where the UTLC awarded a rent of £1,750 per annum. The subject site was considered an unexceptional greenfield site with no clear Alternative Use Value (AUV). Based on previous rulings, the increase of £1,000 per annum has been gladly received in the market.

Before the Code's royal assent, operators lobbied for a longer notice period on the basis that they were unable to replace an existing installation within a 12-month notice period. The Code provides for an 18-month notice period in order for the operators to be able to find, acquire and build a replacement site, in order to reduce the impact on the public. In practice, this notice period is often extended to allow operators to increase the time they have for their replacement site to be as close to operational as possible and will take proceedings to court. It is tactics like this that have created such a hostile landlord and tenant relationship, especially where the intention is genuine.

The Vache Farm case also awarded a landlord redevelopment break clause. This was often a highly disputed clause in negotiations with operators.  This clause provides that the landlord may terminate by giving 18 months’ notice, expiring on the fifth anniversary of the term or any subsequent anniversary of the term commencement date, where the landlord intends to redevelop all or part of the site and cannot reasonably do so, while the equipment is in place.

This clarity from the tribunal is refreshing, providing much-needed clarity to all parties and, importantly, supporting genuine redevelopment for landowners.

In quick succession, Vache Farm was followed by the On Tower vs AP Wireless Ewefields Farm decision, released August 5, 2024, where the FTT determined the rent on 14 sites.

Using Vache Farm as the starting point, the FTT determined the rent for 10 of these sites at £1,750 per annum, confirming the fact that £1750 should be considered the norm for unexceptional greenfield sites. The FTT determined a further two of the sites to be at £2,000 per annum, where ‘hope value’ was applied, as the sites reflected the potential for a more profitable future use or development. In this case, EV charging and storage and the other being ‘semi-rural’.

The final two sites were determined at £2,500 per annum. The FFT applied the definition of ‘grey-field’ to one of the properties, creating a new interesting classification of site. The other property was in proximity to a consented residential scheme, and so ‘hope value was applied’.

These decisions have been a useful step forward for landowners, starting to tilt the balance towards a more landowner-friendly approach to hosting telecommunications equipment. Whilst it is still clear that the Code is still in place to benefit the operators, these cases show an important shift from the FTT and the ULTC in considering the impact of the legislation and the impact of hosting this equipment.

Clearly, the major sticking point is still the valuation model and the rent that it produces. Maybe it is time that we consider a more holistic valuation model. One that considers the entire network's function, its status as a vital utility, and its broader economic and social benefits, which would align better with the UK's digital connectivity ambitions. After all, if the valuation model and rents it generated accounted for the true requirement for connectivity, which the UK is crying out for, landowners would be more willing to supply land for this purpose.

If you have telecommunications equipment on your land and wish to discuss, please call the team at Bletsoes and ask to speak to Will Simpkins.

Will Simpkins

Planning & Development