The long-awaited revised Electronic Communications Code came into force on 28 December 2017 and applies to all agreements entered into on or after such date. Charities with such equipment installed on their land should take note of the new regime as it makes some significant changes. Even agreements entered into prior to the new Code's introduction are subject to complex transitional provisions so advice may be needed.
Key changes introduced by the new Code include:
- Operators (i.e. those operating the equipment) can now assign their rights under the Code without consent from or payment to the charity that owns the land and any clause which seeks to prohibit or restrict assignment will be void (although the outgoing operator can be required to provide a guarantee subject to certain conditions). Operators can also share occupation of the site and upgrade equipment provided doing so has no more than a minimal visual impact and imposes no additional burden on the occupier. Where these conditions are met, any attempt to restrict such sharing or upgrading will be void. These changes mean that charities with such equipment on their land have significantly less control over which operators have access to their premises and have reduced ability to benefit financially from site-sharing arrangements. Perhaps even more significantly, these changes could cause security concerns.
- The rent payable under Court-imposed agreements will now be based on the value of the land from the perspective of the landowner as opposed to that of the operator. Since the valuation mechanism does not take into account the special value of the land to the operator, the level of rent that can be demanded by charities is likely to be reduced.
- Any agreement whose primary purpose is to confer rights under the Code will no longer be protected under the Landlord and Tenant Act 1954 and its termination will instead be governed solely by the Code. The conflict between the old Code and the 1954 Act caused significant uncertainty and so this clarification will be welcomed but in practice, this may make things more difficult for charities, particularly in that the notice requirements are significantly more onerous than those under the previous regime: to terminate a Code right, the charity would need to serve notice on the equipment operator specifying a termination date which must be (i) 18 months after the date of the notice and (ii) after the date the right would have ended if it had not had security of tenure under the Code. Previously, only 28 days' notice was required so landowners will need to plan further ahead should they wish to terminate an agreement (or be prepared to offer higher settlements). Similarly, at least 6 months' notice must be given to vary a Code right.
- The removal procedure is now more complex involving three different removal regimes, the application of which depends on who is applying for the removal and in what circumstances.
It is important to note that it is not possible to contract out of the above provisions and we therefore advise all charities to plan ahead carefully should they need to terminate or vary a Code right due to the extended timeframes and potential financial implications.
If you require further information on anything covered in this briefing please contact your usual contact at the firm on 020 3375 7000.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances. © Farrer & Co LLP, February 2018.