Mobile Phone Providers Triumph in Roof Top Equipment Test Case
The public interest in nationwide mobile telecommunications coverage has resulted in thousands of antennae sprouting on the roofs of tall buildings. An important tribunal ruling has, however, signalled a substantial reduction in rent and compensation payable by mobile phone operators to landlords in respect of such equipment.
The case was the first time that the Upper Tribunal (UT) had considered the effect of the Electronic Communications Code (the Code), which took effect in December 2017 pursuant to the Digital Economy Act 2017. The Code enables the UT to impose agreements on landlords who are unwilling to accept the installation of telecommunications equipment on their properties.
Two mobile phone operators wished to install four antennae on the roof of an urban block of flats owned by a local authority (the landlord). It had been agreed in principle that the operators would pay £21,000 a year to the landlord, but that agreement was not completed before the Code came into force. The matter was referred to the UT after the parties thereafter failed to reach terms.
The operators argued that the annual sum payable should be nominal in that, other than for telecommunications equipment, there was no market for the use of the building’s roof. The landlord, however, contended for a figure of up to £13,250 in reliance on comparable agreements reached prior to the Code coming into force.
In ruling on the matter, the UT noted that the rights concerned had to be valued on the basis that both the operators and the landlord were willing to deal at the market price. However, on a true interpretation of the Code, the operators were not able to use the absence of demand to drive the price down to a level at which the landlord would not be willing to transact.
The UT acknowledged that, where the characteristics of premises mean that, in reality, nobody would pay anything for them, their market value might be viewed as nominal. However, the absence of competition did not necessarily result in that outcome. The value of the premises depended on the their characteristics and potential uses, not simply on the number of potential bidders in the market.
On the basis that the nominal value of the relevant rights would be £50 a year, the UT ruled that the sum payable by the operators should be £1,000 a year. That sum included a contribution towards the landlord’s costs of running the building. The operators having previously proposed a figure of £2,551.77 a year, that was the annual sum fixed upon by the UT.
The landlord’s arguments that it should also receive compensation in respect of a diminution in the building’s value – due in part to the alleged aesthetic detriment arising from the antennae – were rejected. There was no evidence that the value of such buildings was affected by the introduction of telecommunications equipment on their rooves. Other heads of loss and damage put forward by the landlord were dismissed as speculative and contingent.
The UT found that it had jurisdiction to impose an agreement on the landlord in the form of a lease. The agreement would last 10 years with a five-year break clause, at which point the annual sum payable would be reviewed. The operators would be required to pay the landlord’s reasonable legal and surveying costs and compensation for any loss or damage caused during installation.
EE Limited & Anr v The Mayor and Burgesses of the London Borough of Islington