Out-Law Legal Update | 13 May 2011 | 2:54 pm | 1 min. read
Whilst revenue from telecoms operators may be a welcome income boost for landowners, this may also be something of a ticking time bomb. Should the property owner wish to terminate the agreement because it wants to redevelop the building on which the electronic communications equipment is located or to relocate the equipment elsewhere, it may face resistance from the operators claiming Code powers and refusing to move.
What are code powers?
The Code referred to is the Electronic Communications Code which is contained in Schedule 2 of the Telecommunications Act 1984 as amended by the Communications Act 2003. The purpose of the Code is to give operators wide ranging powers to install and keep electronic communications equipment on premises so enabling them to run their systems and protect them from eviction by landowners. The Code's overriding principle is that "no one should unreasonably be denied access to a telecommunications system". In short, the Code potentially provides such equipment with a "status of immoveability" if Code rights are asserted by the operators and upheld by the Courts.
When does the code apply?
The Code applies as soon as there is a 'written agreement' between the parties. That agreement can be as informal as a two or three page agreement; an 'early access' agreement; a letter licence; a letter, fax or email. No formal lease need be in place for the Code to apply. The Code also applies where there is no such written agreement but against a landowner's wishes an operator obtains a court order which allows equipment to be placed on a property owner's buildings. Consent can be given "inadvertently" to operators of equipment installed by a sub-tenant. Many "agreements" are also not contracted out of Part II of the Landlord and Tenant Act 1954, which gives business tenants security of tenure, so these operators are potentially in an even stronger position to resist giving up possession when their agreements are terminated.
Can the code be overcome?
The Code's effects can be mitigated by preventative action: the careful drafting of agreements to include putting in place mechanisms for maximising revenue share from the operators and 'contracting out' of Code Powers where permitted. It can also be mitigated by adopting a strategic approach, planning carefully how best to terminate the agreements or relocate the equipment; by using various parts of the Code and by engaging in negotiations with the operators at an early stage.
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