What price for a rooftop? The powers of the new Code are brought home to landlords

EE Limited & Hutchison 3G UK Limited v The Mayor and Burgesses of the London Borough of Islington

This is the Upper Tribunal’s first decision under the new Electronic Communications Code as to how landlords should be paid when they are required to allow the installation of communications apparatus on their properties. The Tribunal looked in some detail at the meaning and effect of the consideration and compensation provisions contained in the new Code and its findings are summarised in brief below.

Facts

In this case, two mobile network operators sought a long-term agreement to allow them to keep their apparatus on the rooftop at Threadgold House, a property owned by the respondent council. The key question for the Tribunal was how much the operators should be required to pay for the relevant rights.

Prior to the introduction of the new Code, the parties had reached agreement in principle at a rent of £21,000 per year. The agreement was never completed. The proposed rent put forward to the Tribunal by the operators was £2,551.77 per year, whereas the council sought a rent of £13,250 per year.

Decision

Applying the valuation assumptions provided for in the new Code, the Tribunal confirmed that any value attributable to the operator’s intention to use the site as part of its network should be ignored. Taking that “no network” approach, and noting the lack of demand for rooftop space for a commercial purpose unconnected to telecommunications, the Tribunal concluded that the nominal value of the rights was £50 per year.

The Tribunal found that the consideration which willing parties would agree in this case would take into account matters such as wear and tear to the common parts as a result of the operators’ presence, the use of the building’s fire safety systems and a contribution towards the cost of future general roof repairs. On this basis (and in the absence of any service charge provisions in the proposed agreement), the Tribunal decided that the appropriate consideration for the proposed Code rights would be £1,000 per year. However, it ordered that the consideration for the imposed agreement should be the same as the sum sought by the operators in their Tribunal application, namely £2,551.77 per year.

On the question of the separate compensation available under the Code for any loss or damage sustained as a result of the exercise of the Code rights, the majority of the landlord’s claims were rejected as too contingent or lacking in evidence. However, the Tribunal agreed that compensation should be paid by the operators in this case for:

• reasonable legal and valuation costs incurred in seeking to agree terms (but not in resisting the proposed agreement or seeking to settle the case, all of which are in the Tribunal’s jurisdiction); and
• the temporary use of the owner’s land at ground level (and possibly also un-demised parts of the roof) whilst the apparatus is installed.

The Tribunal directed the parties to seek to agree the relevant sums for these compensation elements, although they may apply for the Tribunal to determine them if this proves necessary. The Tribunal noted that the landlord could bring further claims for compensation in the future in the event that additional loss or damage can be proved.

Please contact Emma Humphreys on +44(0) 20 7203 5326 or emma.humphreys@crsblaw.com if you would like further detail as to the reasoning behind the Tribunal’s decision or advice on any other aspect of the Code.