Farming News - Disputes over valuations for telecoms masts

Disputes over valuations for telecoms masts

21 Sep 2020
Frontdesk / Finance

Farmers and landowners in negotiations with telecoms companies over sites for masts or apparatus are being advised to seek professional help before accepting any offers as new guidance on payment considerations is available following a spate of recent Upper Tribunal and County Court cases regarding the new Electronic Communications Code.

The Electronic Communications Code came into force in December 2017 bringing wide-ranging reforms in favour of operators, with new agreements being offered on much poorer terms than previously.

Eifion Bibby of Davis Meade Property Consultants at Colwyn Bay said land agents have been awaiting outcome from several cases being considered to shed more light on the valuation aspects.

In the first case to assess the consideration payable for a new rural mast site under the Electronic Communications Code, the Lands Tribunal for Scotland awarded £600 per annum for a 10-year term without rent review provisions, with an increased payment of £1,500 for the first year.

With the Covid-19 restrictions in place, the case was heard by written representations with no hearing and no cross examination of the valuation evidence submitted by the parties.

Consideration was the key issue in the case, with the operator CTIL offering £253 per annum and the landowner seeking £5,600 pa for a 10-year term with no opportunity to review the payment during the term.

 

“We have to bear in mind that this case ruling was made without any opportunity for cross examination so the tribunal may not have fully explored all the evidence being made by the two sides,” said Eifion.

“The tribunal agreed that in this instance there was no realistic opportunity for the site to be used for a non-telecom use such as a wind turbine so its value was purely for farming or woodland.

“If land is suitable for other uses it will be important to gather comparable rental evidence for alterative agricultural land use agreements before negotiating offers,” he said.

The tribunal heard evidence of the burden such telecoms sites place on the landowner having to allow an operator to have relatively unrestricted access over their land particularly when equipment is being set up so the tribunal awarded an increased payment of £1,500 in the first year.

“We do not know at this stage if the outcome will be appealed but the message to operators is that derisory offers of consideration are not acceptable,” he pointed out.

Also, in a County Court Case involving the renewal of a “subsisting” lease (an agreement entered into prior to December 2017) where the mast operator was holding over after the expiry of the protected fixed term 1954 Land and Tenant Act agreement (for which contracting out provisions had not been implemented beforehand), the Court awarded a new tenancy for 10 years (with the right to break after five) at a consideration of £5750 per annum.

“In this case in relation to ‘rent’ the Court was required to adopt the ‘open market’ approach applicable to the 1954 Act, instead of the ‘no network’ valuation method adopted for new Code Agreements,” Eifion added.