- Electronic Communications Code 2017: First lease renewal under LTA 1954 since code came into force
Electronic Communications Code 2017: First lease renewal under LTA 1954 since code came into force
Electronic Communications Code 2017: First lease renewal under LTA 1954 since code came into force28th August 2020 - Published by Property dispute resolution team
The Electronic Communications Code came into force in 2017 to set out the statutory rights of telecommunication operators to facilitate the creation and operation of their networks. The decision of Martin Rodger QC in Vodafone Limited v Hanover Capital Limited marks the first lease renewal of an electronic communications site under the Landlord and Tenant Act 1954 (the “Act”) since the advent of the 2017 Code and is welcome relief to landowners, operators and practitioners as an indication of how the Court may apply the provisions of the Code in such circumstances.
Lease renewals under the Electronic Communications Code 2017
Vodafone Limited (Vodafone) was granted a lease of a mast site by Hanover Capital Limited (Hanover) in 2008.
In 2016, Hanover served Vodafone with a section 25 notice stating that they would not oppose the lease being renewed. However, the parties were unable to agree all terms of the renewal agreement, namely the rent and the term. Vodafone brought proceedings claiming a new lease in August 2017.
Critically, when determining the rent, the court held that the tenant’s potential rights under the 2017 Code should be taken into account as part of the hypothetical negotiation under section 34 of the Act. Section 34 requires the parties to assume an open market transaction. However, a negotiation relating to a mast site is usually led by the operator’s need to meet customer demand in a certain area. In this case, a higher rent was allowed as Vodafone intended to share the site – this should be of particular interest to those negotiating terms for new leases, as this is perhaps not as in line with the legislative objectives of the Code as operators may have hoped for.
Whilst there is still a great deal of uncertainty surrounding how the provisions of the 2017 Code apply, Vodafone Limited v Hanover Capital Limited marks a significant step to gaining more clarity.