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The telecoms landscape is changing once again, and for landowners with telecoms infrastructure on their property, the implications could be significant.
New provisions introduced through the Product Security and Telecommunications Infrastructure Act 2022 (PSTI) are now taking effect, bringing further changes to the way telecoms lease renewals are handled. The changes are designed to streamline the renewal process, but they may also impact rental income and negotiation strategies for landowners.
One of the most significant developments is the way renewal rents will be assessed.
Historically, many telecoms leases protected under the Landlord and Tenant Act 1954 were renewed using an open market valuation approach. Under the new framework, renewals will instead adopt the Electronic Communications Code’s “no-network” valuation methodology, which assumes the rights being granted are not connected to the provision of an electronic communications network.
In practical terms, this means that landowners could see lower renewal rents than they may have achieved under the previous regime. The valuation basis already applies to new Code agreements and certain renewals, and its wider application will bring greater consistency across the sector.
For many landowners, telecoms agreements provide an important source of income. Whether the site hosts a mobile phone mast, rooftop apparatus or other communications equipment, changes to rental valuations could have a direct impact on future returns.
At the same time, the legislation introduces changes to how renewal disputes are handled, with telecoms lease renewals moving to the First-tier Tribunal rather than the County Court. The intention is to create a more streamlined process, but it also reinforces the importance of receiving specialist advice from the outset.
Andrew Entwistle, Partner at GFW, said:
With renewal rents increasingly being driven by legislation rather than traditional market forces, landowners need to look beyond the headline figures. A successful telecoms negotiation is about understanding the full picture – from compensation and future development potential to protecting long-term interests. Those who prepare early are likely to be in the strongest position.
Whilst much attention has focused on rental values, compensation should not be overlooked.
The new framework provides opportunities for landowners to seek compensation for losses arising from the exercise of telecoms rights under a renewed agreement. This may include professional fees, any reduction in land value and reinstatement costs where appropriate.
For landowners, compensation should form part of the wider negotiation strategy rather than being treated as an afterthought. A well-prepared approach can help ensure all relevant factors are considered alongside the headline rent payable under the agreement.
With the new regime now underway, landowners should take the opportunity to review their telecoms portfolio and understand when key agreements are due for renewal.
Factors such as the expiry date of an agreement, the timing of notices and the potential impact of the revised valuation methodology can all influence the best course of action. Early preparation often provides greater flexibility and can help avoid unnecessary delays or unexpected outcomes later in the process.
Telecoms negotiations have become increasingly complex over recent years. As legislation continues to evolve, having experienced advisers on your side is more important than ever.
At GFW, our specialist team works with landowners to negotiate new agreements, renew existing leases and protect long-term interests. We understand both the technical and commercial aspects of telecoms infrastructure and help clients navigate negotiations with confidence.
If you have telecoms equipment on your land or a lease renewal approaching, now is a good time to review your position and ensure you are prepared for the changes ahead.
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