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New electronic communications code - What owners, investors & developers should know

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The Digital Economy Act 2017 and the new Electronic Communications Code came into effect in December 2017 and replaced the much criticised Communications Act 2003, which was widely considered to be unfit for purpose. As phone masts and telecommunications equipment are found on many properties, the owners, investors and developers of these, along with their surveyors need to be aware of the changes which could affect the value of their assets.

 

Anyone owning or considering purchasing property with telecommunications equipment should carefully consider whether the new legislation on removing apparatus will have an impact on future plans. The legislation also gives telecommunications operators the potential to impose apparatus on property owners against their will.

 

The previous Code was introduced in 2003 and has struggled to keep up with the rapid advances in the technology and digital market. The aim of the new code is to promote network connectivity, expand coverage and take in to account the legitimate interests of all parties.

 

There are important issues affecting Security of Tenure. The Code has addressed the uncertainty around how the provisions of the Landlord & Tenant Act 1954 apply. It removes any double protection that a telecoms operator previously enjoyed under the old Code and the secure business lease regime contained in the 1954 Act. New telecoms leases will only be protected by the Code. This is a benefit for developers who will only have to prove a ground of termination under one statutory regime.

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Where the landowner and telecoms operator are not able to agree on terms, from a valuation point of view, compensation and consideration payable by a telecoms operator to landowners will be calculated by reference to the market value of land from the perspective of a landowner only, as opposed to the telecoms operator. This could be substantial if the site is strategically important as this factor will be disregarded. 

 

A significant change under the new legislation is the termination of agreement and removal of equipment. Under the previous Code, landowners were required to give operators 28 days’ notice if they want to terminate a Code agreement and this has now been extended significantly to 8 months. Additionally, a further notice must be served for the removal of apparatus from site specifying a “reasonable” period. Considering the possibility of court delays, this also creates longer time-frames which can impact on development plans.

 

The presence of equipment will also not be revealed by property searches. Permitted development rights for installation, alteration and replacement of apparatus must be taken into consideration.

 

The rights over property granted to network operators under the code are significant and not always easily apparent. Therefore anyone acquiring property or considering granting rights should be careful to establish what is involved and what rights are attached.