Welcome to the first of our RED Alerts of 2023.
Featured in this month's update:
The Product Security and Telecommunications Infrastructure Act 2022 (the PSTI) was given Royal Assent on 6 December 2022. The PSTI aims to give greater certainty to telecom operators, ensuring the efficient roll-out of digital infrastructure such as gigabit-broadband and 5G. This does, however, impose new duties and responsibilities on site providers and has a potential to affect rents available.
What are the changes to rent valuations?
The change in legislation makes amendments to the Landlord and Tenant Act 1954 (1954 Act), with the aim of aligning the procedures for renewal disputes and imposing new agreement terms more closely aligned with Part 5 of the Electronic Communications Code (the Code), introduced in 2017.
Currently, any lease that falls within the protection of the 1954 Act would need to be renewed first in accordance with the 1954 Act’s renewal procedure. The new lease would then be a code agreement, governed by the Code. When that lease comes to an end, the operator could then rely on the procedure under Part 5 of the Code to modify any existing rights under that new lease.
The PSTI modifies the assessment of rent under the 1954 Act so that telecoms renewals adopt the valuation provisions applied under the Code.
Are there any other changes landlords should be aware of?
Other key measures implemented by the PSTI include:
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transferring jurisdiction for renewals of subsisting agreements under the 1954 Act from the County Court to the First-tier and Upper Tribunal
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a new duty for operators to consider using Alternative Dispute Resolution (ADR) to settle disputes or narrow disputed issues before making a court application. Operators must make landowners aware that ADR is an available option. The courts will be required to take into account any unreasonable refusal to engage in ADR when awarding costs
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limited rights for operators to upgrade and share equipment installed before the Code, provided there is no material impact on the owner or occupier of private land
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a new procedure for operators to quickly obtain Code rights over certain types of land, where a landowner fails to respond to requests for access.
Our comment
The measures implemented by the PSTI is unlikely to be welcomed by landowners. The valuation provisions under the 1954 Act are often considerably more favourable to landowners than the provisions under the Code and accordingly, rents for 1954 Act agreements are likely to take a hit.
Site providers should also be on alert for notices from operators, to avoid rights being imposed by the Courts due to a failure to respond.
