The rent payable under a lease renewal under Part 5 of the Electronic Communications Code of an unexceptional rural site must be adjusted for inflation and evidence of non-telecommunications transactions for unexceptional rural sites.
The Upper Tribunal (Lands Chamber) has considered renewal terms for a lease of a greenfield telecommunications site in EE Ltd and another v AP Wireless II (UK) Ltd [2024] UKUT 216 (LC).
The case concerned Vache Farm near Chalfont St Giles, Buckinghamshire, a rural site leased for a term of 15 years and assigned to the claimants in 2015. It was used for electronic communications networks for the claimants and others. The respondent acquired an overriding lease of the site, becoming the claimants’ immediate landlord, in 2018.
Most terms of the new lease were agreed: a term of 10 years with a break exercisable by the operator after five years and an RPI rent review. The disputed issues were the rent and whether the landlord should be entitled to terminate the lease for redevelopment.
It is not the policy of the Code to stand in the way of the landowner’s redevelopment of a site for a more profitable use EE Ltd and another v Stephenson and another [2022] UKUT 180 (LC). The Tribunal saw no reason why intended redevelopment for telecommunications use – by constructing another mast on the site – should make a difference.
Since there was no evidence of the claimants’ intention to invest in the site in the short term and they were willing to agree a five-year break clause the Tribunal provided for termination no earlier than the fifth anniversary of the term on 18 months’ notice if the landlord intended to redevelop all or part of the site and could not reasonably do so while the lease continued.
The rent payable under paragraph 24 of the Code is assessed on the no-network assumption and the three-stage approach set out in Cornerstone Telecommunications Infrastructure Ltd v London and Quadrant Housing Trust [2020] UKUT 282 (LC): (i) determine the existing use value of the site or any alternative use, if higher, and add sums (ii) to reflect any additional benefit conferred on the tenant by the letting and (iii) any additional burden imposed on the site provider.
The determination of £750 per annum for an unexceptional rural site in Stephenson, which had been adopted by operators as their offer for rural sites, needed to be adjusted for inflation and in light of evidence of non-telecommunications transactions for unexceptional rural sites. The appropriate annual consideration for a rural mast site was £1,750.
Louise Clark is a property law consultant and mediator
