Farmers and landowners negotiating with telecoms firms over the siting of phone masts and equipment on their property have been strengthened by a new legal ruling.
In EE Ltd/Hutchison 3G Ltd v Duncan & Others 2020 the Scottish Lands Tribunal dismissed an application by phone operators to replace an existing lease with a new agreement under the Electronic Communications Code.
Instead of continuing with the existing agreement on ‘tacit relocation’ – a Scots law principle in which leases continue from year to year on the same conditions as previously – they served a Notice under Paragraph 33 of the Code, requesting a completely new lease.
Concluding that the operators had not put forward a relevant case as to why they should be granted a new Code lease at renewal, the Tribunal dismissed their application.
The Tribunal noted the Code gave it discretion to determine certain rights, such as to modify an agreement instead of replacing it.
However, as the application was for a completely new lease, the Tribunal concluded it must either approve or reject the application.
The Tribunal also confirmed there is nothing wrong with an operator who can't justify the replacement of an old Code agreement remaining bound by that agreement.
Property consultancy Galbraith said the case concluded that the operators needed to provide a justifiable reason for requiring a new lease at renewal rather than continuing with the terms of the existing lease.
"They can’t just have one just because the new code is more advantageous to them," said Mike Reid, head of energy at Galbraith.
According to Mr Reid, some landowners will have already signed up to new leases on renewal as a result of an approach from a Code operator threatening Tribunal action if they don’t agree to the terms proposed.
He said those owners will probably now be receiving substantially less rent and have poorer lease terms than their previous lease as a result.
Although this decision shows that, in many cases, these owners probably did not need to agree to the operators’ proposals, Mr Reid added.
He said: “Landowners approached about a lease renewal should ask operators to justify why the existing lease, which may have been operating successfully for 20 years, needs to be changed."
Mr Reid explained that in my cases a change to a new code lease may be difficult to justify.
The operators may appeal the decision and there is still a pending case on whether an operator already in occupation can obtain Code rights under Paragraph 20, which if successful would give the operators an alternative option for obtaining a new lease at lease renewal.
However, that would reverse the Court of Appeal decision in CTIL v Compton Beauchamp Estates Ltd so success is not guaranteed.
Mr Reid sounded a note of caution: “Although the operators’ application was dismissed as a completely new lease was proposed without adequate justification, in some circumstances there is likely to be a justifiable case for an operator requesting appropriate changes to bring an agreement into line with the new Code.”