The news that telecoms operators will potentially have to pay market value for mast sites has been welcomed by land agency firm Strutt & Parker.

Landowners will benefit from the recommendation in the Law Commission’s review of the Electronics Communication Code. The alternative, a request by the operators to pay compensation only, would have drastically undermined the rents chargeable for radio mast sites.

The Law Commission’s review of the Electronic Communications Code (commonly referred to as the Telecoms Code), which governs the right of network operators to access public and private land and gives the operators compulsory powers, was recently published and is now under consideration by the Government. The current code had been branded as being virtually unworkable and the mobile phone operators had lobbied hard to swing the legislation in their favour.

Robert Paul, telecoms specialist in Strutt & Parker’s Shrewsbury office, said: “We are delighted that the market value approach has been adopted as a basis for payment in the Law Commission’s draft proposals. This is very positive for existing and potential landlords, in contrast to the demand made by operators to pay purely on the basis of compensation. Additionally, the review suggests there will be a clearer definition of market value which will give landlords greater confidence when it comes to negotiating.”

Strutt & Parker, who represents landowners in relation to telecoms leases, were one of just 130 organisations or individuals to make a representation to the Law Commission. The retention of the reference to market valuation is considered to be something of a victory and, to landowners, the difference in income could easily have meant the loss of a rental income of £5,000-£7,000 per annum for a single user site down to a paltry compensation figure of no more than £20-£30 per annum.

Mr Paul added: “There are a number of points in the report to consider, many of which will be welcomed if they come to fruition. In the first place, the code will be rewritten, not merely amended or tweaked. In general, it will bring greater clarity: the legal test for compulsory acquisition will be more clearly set out; provision will be made for limited rights for operators to share and upgrade sites; operators will be able to assign their rights (but hopefully not to multiple operator groups) and a clear process will be in place for when agreements expire.”

Disputes will go to the tribunal system rather than through the court. For new agreements (or possibly renewals), the Landlord and Tenant Act (LTA) 1954 Part 2, relating to business tenancies, will not apply.

Mr Paul said the code would deal with compensation for other losses such as depreciation in the value of neighbouring land. Also, where a tenant may have granted rights to an operator, the landlord will not be bound beyond the duration of the tenancy.

In addition, where operators share sites, the site sharers will not have additional Code Rights. The Code Rights might work in a similar way to the LTA 1954, with holdover and rent still being payable and there will not be any right to contract out.

Operators needing to move equipment will have to give 18 months’ notice and allow a three month window for a counter-notice.

For more information please contact Robert Paul in Strutt & Parker’s Shrewsbury office on 01743 284204.