Guest blog: Telecommunication update – Vache Farm and Kay Park Tribunal cases strengthen landowners’ rights on lease renewal
Vache Farm Case
The case of EE Ltd & H3G Ltd v AP Wireless Ltd [2024] UKUT 216 (LC) was determined by the Upper Tribunal Lands Chamber in England in respect of renewal of a radio mast site at Vache Farm in Buckinghamshire. The Upper Tribunal set a site payment of £1,750 a year, using comparable transactions for rents for unexceptional rural sites, when the Tribunal had previously determined a site payment of £750 for this type of site.
The Tribunal found there is a rental level below which no prudent and willing landlord would transact for any small parcel of land and they then added the additional burdens of a Code agreement to award a rent of £1,750.
In 2020, faced with a plethora of cases and competing arguments, the Tribunal departed from the general approach to prefer market evidence and produced a table of rents in the earlier Affinity Water case.
The Upper Tribunal has now acknowledged that alternative use values are a relevant consideration, which reflect the real burdens of a telecoms lease compared to other “passive” rural agreements.
This decision effectively sets a new base site payment for rural telecom sites, although payments will be higher where there is additional impact caused by the rights granted. This decision highlights the importance of agreeing relevant terms within any radio mast lease, including open market rent reviews so payments can be adjusted to appropriate levels in future.
Since the introduction of the Electronic Communications Code in 2017, many landowners have been compelled to accept lower site payments at renewal due to pressures of legal action and will have no recourse to update their payments to reflect this ruling as operators were not prepared to accept open market rent reviews. This decision highlights the importance of agreeing appropriate lease terms to future proof and protect the landowners position, such as the ability to review site payments to the market level.
Kay Park Case
The case of On Tower UK Ltd v The Church of Scotland General Trustees [2024] LTS 21 was determined by the Scottish Lands Tribunal in respect of a telecommunications site at the Kay Park Parish Church in Kilmarnock. The Tribunal found that due to errors during multiple assignments of the lease, On Tower was not legally the tenant of the site.
On Tower had served a paragraph 33 Notice to instigate a lease renewal but the Tribunal found this notice was invalid as On Tower was not legally the tenant, so its application failed.
This ruling is likely to have ramifications across the industry. Over the years operators have transferred sites between themselves apparently without properly considering the lease requirements.
It is important for landowners to check who is the legal tenant of their site before progressing any lease renewal and it is likely many agreements will be affected by this ruling.
Any landowner facing a telecoms lease renewal is urged to take independent expert advice before acting. Leaseholders are obliged to pay reasonable costs towards this.
Ian Thornton-Kemsley is a telecommunications industry valuation expert at Galbraith, the independent property consultancy
15 August 2024
The views expressed in this blog are those of Galbraith and do not necessarily reflect the views of Scottish Land & Estates. No liability can be accepted by Scottish Land & Estates or any of its staff for any misstatement in it or omission from it.
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