Telecoms operators, trying to slash rents on mast sites, may have been using the wrong legal procedure in pressing for the renewal of leases, according to a recent Upper Tribunal decision.

In the case of CTIL v Ashloch and AP Wireless, a rooftop mast site was let on a business lease to Vodafone which was then transferred to CTIL. The original lease pre-dated the new Electronic Communications Code and therefore fell under the Landlord and Tenant Act 1954, explains Jeremy Moody, secretary and adviser to the Central Association of Agricultural Valuers. The Tribunal found that CTIL had been wrong in using a notice under the new Code’s Paragraph 20 to seek a new agreement.  It should instead have requested a new tenancy using the 1954 Act procedures, as with any other business lease and with the default to a market rent. 

Most agreements which started before 28 December 2017 are protected by the 1954 Act, and the operator tenant seeking the renewal of such an agreement must therefore do this through the County Court, not the Tribunal, explains Mr Moody. 

This approach applies across England and Wales, with similar rules in Northern Ireland for renewal through the Northern Ireland Lands Tribunal.  Scotland’s different land law means that many of these tenancies do not naturally end, appearing to give no easy means for renewal at all.

The Tribunal can only act on a Paragraph 20 notice under the new Code when an operator is seeking new Code rights – generally on a new site – not the renewal of Code Rights that already exist, he adds. However, when a tenancy not covered by the 1954 Act approaches its termination date, the operator may give six months’ notice under Paragraph 33 of the Code and seek renewal under Part 5.

The consequences of the Upper Tribunal’s decision are likely to be far reaching, says Mr Moody. “It suggests that the majority of notices served under Paragraph 20 might not be effective as a basis for seeking a renewed Code agreement from the Tribunal. Therefore, anyone involved in Code cases will need to consider the implications carefully and get expert advice on this subject,” he adds. “Even multi-national companies, keen to slash rents, may be using the wrong procedures.”