Contested Break Notices

Luke Maidens, telecommunications law specialist at Shulmans, gives advice to landowners faced with an attempt to break a lease by a mobile phone operator.

Do I understand that there is likely to be an overall reduction in the number of mast sites?

Whilst the expansion of mobile networks in the recent past has been quite phenomenal, more recently network operators have realised that they can potentially save large sums by sharing their sites and therefore reducing their overall rental and other overheads burden.

O2 and Vodafone are therefore now working together (as Cornerstone or CTIL), as are T-Mobile, Orange and H3G (as EE/MBNL). The idea is that sharing mast sites will reduce the overall number of sites the operators require.

What does this mean in practice?

The operators are now actively looking for ways in which to reduce the number of sites which are surplus to requirements. On the face of it, this can be bad news for landowners who may lose their rental income.

In some cases, the operators are seeking to exercise break clauses contained within their leases, in an attempt to end their liabilities early. Often, this is combined with an offer from the operator to pay a lump sum (which is relatively minimal compared with the rent to the end of the lease term) to leave the mast in place, if the landowner is prepared to sign documentation transferring the site over to them.

Faced with a phone company who are saying they no longer need the site, the landowner may feel they have no alternative than to make the best of a bad situation and accept the sum offered.

Is this the case?

This is not the case, and before agreeing anything with a mobile phone company, or even before acknowledging any correspondence from them, the site provider should take specialist professional advice from solicitors experienced in advising on mobile phone network consolidation issues.

In many cases, the operators are not in fact legally entitled to break the lease early, despite assertions to the contrary. The fact of the matter is that many of the operators’ rights to end their leases are conditional upon specific events or circumstances taking place. If these conditions are not satisfied (and in nearly all cases they are not), then the lease continues.

In practical terms, the operators are relying upon landowners taking them at their word and not taking advice in relation to their position. We have seen notices from all of the main operators being served on this basis.

Shulmans’ telecoms team has acted for many landlords across the country on these types of issues. We challenge the operators’ right to break to break their leases early, backed up by Court proceedings if necessary. As a result, we secure open acknowledgements from the operators that their break notices are invalid and of no effect and that the lease agreement continues (along with the obligation to pay rent), to term expiry.

Often, the sums at stake can be over £100,000 (before rent reviews and interest are taken into account) to the end of the lease. Shulmans’ telecoms team have secured this income for many landowners, where it would otherwise be lost by the landowner agreeing to have the site signed over to them. We have acted for sports clubs, local authorities, property investors, developers and businesses in this field, with excellent results.

If you receive any correspondence from the operators in relation to their seeking to end your lease and vacate your site, do get in touch before doing anything else.

Our team

Michael Watson

Partner

Head of Property Litigation

Direct Line +44 (0)113 297 1850

Luke Maidens

Associate

Property Litigation

Direct Line +44 (0)113 297 8057

Kieran Wilkinson

Associate

Real Estate

Direct Line +44 (0)113 297 7730

Helen Hill

Partner

Property Litigation

Direct Line +44 (0)113 297 3770

Richard Robinson

Associate

Property Litigation

Direct Line +44 (0)113 297 3783

Paul Sagar

Solicitor

Property Litigation

Direct Line +44 (0)113 288 2816