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The Electronic Communications Code (“ECC”) came into force on 28 December 2017 and promised to change the dynamics in the relationship between landowners and the providers of electronic communications services (operators).
The aim of the ECC was to provide operators with greater flexibility and increased rights to install apparatus in, over, and under land (“the Code Rights”) and was introduced due to the growth in the mobile phone industry and demand for network expansion.
The changes the ECC introduced included the ability for operators to share the site with another operator, assign their lease, or upgrade the equipment all without the landowner’s consent.
The ECC also changed the valuation basis of telecoms sites – moving from a valuation assessed on an open market basis to a ‘no scheme’ basis. The ‘no scheme basis’ review disregards the existence of the telecoms leases and the associated Code Rights within its calculation. Instead, the site is valued on its worth to the landowner only, rather than the value to the operator, which in practice could present a substantial financial difference in the rent recoverable by landowners and prove highly beneficial to operators.
The ECC introduced new provisions for terminating a code agreement and the removal of the apparatus.
Firstly, a landowner must give 18 months’ notice to the operator that the agreement is to come to an end and cite the grounds on which the termination is founded. The ECC provides four grounds upon which a landowner seeking to terminate the agreement can rely and include most commonly an intention to redevelop the property, substantial breaches of the agreement by the operator, and a delay by the operator in paying rent. The landowner’s notice will terminate the agreement unless the operator responds with a counter-notice to the landowner and an application to the court to object to the notice they have received. Landowners seeking vacant possession of their property will therefore need to accommodate the additional periods of notice introduced by the ECC before they are able to obtain exclusive possession of their property.
Secondly, having secured the right to terminate the agreement a landowner must then serve notice requiring the removal of the apparatus from the land. Should the operator fail to remove the apparatus, the landowner may apply to court for an order forcing its removal.
Under the ECC, the security of tenure provisions under the 1954 Act will not apply to any agreement between a landowner and an operator where the primary purpose is to grant Code Rights. In practice, this means that operators will only benefit from one form of security of tenure (that provided under the ECC) and not under the 1954 Act also.
For agreements in place prior to 28 December 2017, landowners will need to ensure that they also satisfy the requirements of the 1954 Act, in addition to the termination provisions under the ECC, before they are able to obtain vacant possession of their property.
In this case, the claimants were seeking to acquire new code rights on the respondent’s estate in the New Forest. Following a series of failed negotiations for a new agreement, the claimants served notice in March 2018 requiring the respondents to agree to confer Code Rights.
The respondents resisted on the basis that they intended to redevelop the property. Their proposed redevelopment was to replace the operator’s existing masts with masts of their own, in an attempt to bypass the ECC and be free to negotiate the terms and rents of a new agreement.
The question for the court was whether the respondents had a genuine intention to redevelop the land and carry out the project. In this case, the Court held that the respondent’s intention to bring about the redevelopment was not genuine and was a scheme devised to purely to avoid the ECC being imposed.
The court held that the intention of the landowner to develop must be something that is “firm and settled”. The pertinent question for the court in future cases is whether the landowner intends to carry out the redevelopment project even if the operator was not seeking code rights? Landowners seeking vacant possession of their property by terminating the agreement citing the ground of redeveloping their property must therefore be prepared to present sufficient evidence to the court in support of their proposed redevelopment project.
Our experienced Commercial Property lawyers are able to provide advice on all aspects of property-related issues. If you would like advice you can contact us by calling 0161 941 4000 or by emailing email@example.com.