A Wayleave also known as a Code agreement is a legally binding agreement between a land or property owner and Telecoms, Utilities or Fibre providers that grants access for the installation and subsequent maintenance or management of network cabling and equipment over or under land.
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If you are a Landowner and are being approached by Telecommunications Operators to install network on your land, then you need to carefully consider the wayleave agreement and think about whether or not it is viable for you to allow access.
A few points to consider are
- Do you have a greenfield site, or a built up site?
- Do you currently have an agreement with another Operator?
- Do you have any redevelopment plans?
- If none of the above apply, then are you being adequately compensated, and given the right consideration amount for the installation of apparatus?
- Is the wayleave agreement being negotiated well to strike a fair balance between both parties?
What is the Electronic Communications Code (ECC)
The ECC came into force in 2017 and so is a relatively new piece of legislation which regulates the relationship between landlords and telecommunications network operators. One of the main drives of the ECC is to provide the public with access to a choice of high-quality electronic communications services.
The new code enables the Upper Tribunal to impose a Code Agreement on a landowner against their will if they can recover compensation to account for the detriment caused by the installation of electronic communications apparatus and if the operator can meet the ‘public benefit test’ which is basically the test to show that the landlord’s inconvenience is outweighed by the greater public benefit for having the apparatus installed.
What are the main issues for landowners to consider – Rent?
The new code has severely impacted rental values, in the past the Landowners would demand a rental income from the Operators and they would have to pay. Unfortunately, now the ECC has given clear guidance on rental payments and so rents are now assessed on a ‘no network’ assumption and are based on the market value of the land without considering the value of the site to the operators. Typically, operators will choose small greenfield site where they can demonstrate that there is little loss to the landowner. However, if a built up site for example in a town centre is considered then rental payments should reflect this. There are 2 possible rental payments for the landowners.
- Consideration – this is the amount payable to the landowner for being bound by the agreement. This can be a one off payment, or a reoccurring yearly or periodic payment. The amount to be paid is based on the market value of the land and the agreement and excludes the benefit to the operator or the provision of the use of an electronic communications network.
- Compensation – this is for any loss or damage that has been sustained or will be sustained as a result of the exercise of the code rights.
Sharing & Upgrading of equipment –
The ECC has now allowed operators to share their equipment and assign their code rights to other operators without seeking the landowners permission. This could pose an issue when it comes to terminating and removing an operators equipment and furthermore it prevents the landowner from earning extra income for new or additional operator use.
Termination of wayleave
If a landowner wants to terminate the wayleave agreement it is no longer a straightforward process and a minimum notice of 18 months must be given to the operators to terminate under the ECC and unfortunately this is regardless of whether the contractual term has expired. On giving notice under the ECC the landowner may have to issue a separate notice terminating the wayleave and then specifying one of the statutory grounds for removal.
Statutory grounds for removal are as follows:
Even and when the agreement is terminated, the landowner still has no right to remove the apparatus and a further procedure must be followed to request the operator remove the equipment. The landowner may only request removal/termination based on the following statutory grounds;
- Substantial breach by the operator under the wayleave agreement
- Delays or non-payment by the operator for the agreement
- If the landowner wishes to develop the land and could not reasonably do so without terminating the wayleave.
Given the above changes, it is really important that Landowners who have telecoms apparatus on the property whether that be by way of an existing formal or informal arrangement, or if they have been approached by operators seeking access to the land for surveys and new telecoms wayleave agreement or leases, then they should seek legal advise to ensure that they understand their rights under the ECC and to secure a telecoms agreement that does not unduly burden their property.
