The Digital Economy Act 2017 received royal assent in April 2017 which includes a new Electronic Communications Code “New Code”. The Act contains powers for the Secretary of State to bring into force the New Code, and this is expected to happen in December 2017.
The New Code will mean the security of tenure provisions of the Landlord & Tenant Act 1954 will not apply to telecommunications leases. It will also make void attempts by the landlord to restrict assignment or prevent site sharing rights.
From a rental perspective, the New Code seeks to limit the rental levels by excluding the value attributable to the proposed use and enhanced rights that benefit a telecommunications tenant. While a significant amount of commentary has focused on a reduction in rent, it remains to be seen how this will play out.
The mechanism to terminate agreements has also been altered with landowners now required to give 18 month’s notice (or longer if the agreement requires) to terminate the agreement and they must still satisfy the criteria for possession.
The New Code on the face of it appears to be more friendly to the operators than landowners and the consequences of which remain to be seen. It is possible that operators will take a “wait and see” approach to the New Code resulting in fewer transactions immediately after the New Code comes into force.
If you wish to discuss the rights benefiting telecommunications tenants or you are looking redevelop land that currently has telecommunications equipment on site please call Simon Tennant.