The grant of exclusive possession of land for a term at a rent creates a lease whatever label the parties put upon the agreement and whether or not the Electronic Communications Code applies. The key is the substance and effect of the agreement.
The Upper Tribunal (Lands Chamber) has considered this issue, partially allowing an appeal in AP Wireless II (UK) Ltd v On Tower UK Ltd [2024] UKUT 263 (LC).
The case concerned agreements for the installation and operation of telecommunications equipment at separate rural sites in Sandbach, Cheshire, and Hullbridge, Essex.
In each case the freehold owner of the site was now the appellant – APW – and the operator was the respondent – OT.
If the agreements were licences, they were subsisting agreements for the purposes of the Code and the operator could seek a new agreement under Part 5. If they were leases, they were subject to Part II of the Landlord and Tenant Act 1954 and Part 5 would not apply.
The agreement relating to the Sandbach site was made in 1997 for a minimum of 10 years at a fee: the site area was extended for an increased fee by a supplemental agreement in 2000. The agreement relating to the Hullbridge site was made in 2002 for a term of 20 years at a fee.
In both cases the telecommunications equipment was to be in a fenced compound, which the operator was required to erect and maintain within land also owned by APW over which OT had rights of access. APW could only access the sites for inspection, by prior appointment.
The judge in the First-tier Tribunal decided that the intention of the parties was that the operator would be granted a bundle of rights relating to the installation and operation of telecommunications equipment not exclusive possession of land so the agreements were licences not leases.
The Tribunal disagreed. The agreements did grant an extensive bundle of rights but in relation to equipment which was to be installed and operated within an enclosed compound. Considered with the plans, which identified specific areas of land subject to the rights, the fencing obligations, extensive sharing rights for the operator and restricted access for the owner, the agreements granted exclusive occupation of each site.
The Hullbridge agreement was for a term at a rent and was a lease. However, the Sandbach agreement was not for a term certain, being neither a fixed term, a periodic tenancy nor an amalgamation of the two. Since an annual periodic tenancy could not be implied the agreement was a licence, not a lease.
Louise Clark is a property law consultant and mediator
