Section 26 Notices: What They Mean for Mast Landlords

Matt Restall

Specialist Telecom Surveyor

1 June 2020

What is a Section 26 Notice?

A Section 26 Notice is a formal legal document served by a tenant (in this case, a telecommunications operator) on a landlord to initiate the renewal of a commercial lease. Under the Landlord and Tenant Act 1954, tenants with protected leases have an automatic right to renew their tenancy when the original lease expires.

For UK landowners hosting phone masts, receiving a Section 26 Notice from operators like Vodafone, EE, O2, Three, or their agents (such as Cornerstone, CTIL, or Cellnex) signals the start of a critical negotiation window. How you respond during this period can significantly impact the rental value and contractual terms you secure for the next 25 years.

Understanding Your Legal Position

The Landlord and Tenant Act 1954 provides robust protection for commercial tenants — and by extension, places obligations on landlords. Key provisions include:

Security of tenure: The tenant has the right to remain in occupation unless the landlord can establish specific grounds for refusal
Rent determination: If parties cannot agree on a new rent, either can apply to the court or tribunal for a determination
Terms of renewal: The new lease typically mirrors the existing terms unless either party proposes variations

However, telecommunications operators have increasingly attempted to circumvent these protections by invoking the Electronic Communications Code (ECC) — particularly the 2017 revision — to offer substantially lower rents than those achievable under the 1954 Act.

The ECC vs. Landlord and Tenant Act: The Key Battleground

This is where many landlords face confusion. Operators frequently argue that:

The ECC takes precedence over the Landlord and Tenant Act 1954
Rent should be calculated using "code rent" principles (often dramatically lower)
Landlords cannot refuse renewal under the ECC

However, recent tribunal decisions have clarified the position:

CTIL v Ashloch Limited and AP Wireless II (UK) Limited [2019] UKUT 0338 (LC): The Upper Tribunal confirmed that the ECC cannot be used to renew leases that benefit from 1954 Act protection
Landlords with leases granted BEFORE the 2017 ECC came into force typically retain their 1954 Act protections
Operators must issue Section 26 Notices if they wish to renew under the 1954 Act, not the ECC

Step-by-Step: How to Respond to a Section 26 Notice

1. Do Not Ignore the Deadline

Section 26 Notices specify a response deadline — typically 2 months from service. Missing this deadline can forfeit your negotiating position. Contact a specialist immediately upon receipt.

2. Verify the Notice is Valid

A valid Section 26 Notice must:

Be served on the correct landlord (check title records)
Identify the property accurately
Propose a realistic start date for the new tenancy
Include the proposed rent (if the landlord doesn't propose rent, the tenant can apply to the court)

3. Engage Specialist Representation

This is critical. Telecom operators deploy experienced surveyors and solicitors. You should do the same. A specialist telecom surveyor can:

Review the current lease and its protections
Assess whether 1954 Act or ECC applies
Obtain independent valuation evidence
Negotiate terms before tribunal proceedings become necessary
Engage your own solicitor for legal proceedings if needed

4. Consider the Operator's Proposed Terms

Operators often use Section 26 Notices to push through unfavourable terms:

Reduced rent (often 40-60% below market value under 1954 Act principles)
Extended lease terms favourable to operators
Weakened user rights or access provisions
Removal of redevelopment protections

Do not accept initial proposals without negotiation.

5. Prepare for Tribunal (If Necessary)

If agreement cannot be reached, either party can apply to the Upper Tribunal (Lands Chamber) for determination of terms. This can take 12-18 months but often results in significantly better outcomes than accepting poor operator offers.

Common Scenarios: How Different Operators Approach Section 26 Notices

Vodafone and EE

As the largest operators, Vodafone and EE often work through appointed agents like Fisher UK and Avison Young. Their initial Section 26 Notice packages typically include:

Proposed rents based on "code rent" methodology (which we dispute)
Standard operator-friendly lease terms
Pressure to accept quickly

Our approach: Challenge the rent methodology, obtain independent valuation, negotiate under 1954 Act principles.

O2 (Telefónica UK)

O2 typically issues Section 26 Notices through their asset management team or agents. They have been more willing to negotiate than some operators but still require professional representation to secure fair terms.

CTIL and Cornerstone

As infrastructure companies, CTIL (now largely integrated with Cornerstone) often issue Section 26 Notices on behalf of network tenants. Their approach has historically been aggressive on rent — many landlords report initial offers 50%+ below market value.

Three and Other Operators

Smaller operators vary significantly in their approach. Some are willing to negotiate reasonably; others require tribunal intervention.

What Landlords Should Do Now

If you have received a Section 26 Notice — or want to prepare for one:

Check your lease: When was it granted? Does it have 1954 Act protection?
Document your current situation: Gather all correspondence, rent records, and operator communications
Engage specialist help: Do not respond without professional representation
Do not accept operator terms immediately: Initial offers are negotiating positions, not final
Consider long-term value: A well-negotiated lease can be worth £100,000+ over its term

Frequently Asked Questions

How long do I have to respond to a Section 26 Notice?

You typically have 2 months to respond. The notice will specify the exact deadline. If you do not respond, the operator may apply to the court for a possession order.

Can I refuse a Section 26 Notice?

Under the Landlord and Tenant Act 1954, you can only refuse on specific grounds specified in the Act (such as tenant's breach of covenant, landlord's intention to redevelop, or landlord's willingness to offer suitable alternative accommodation). Simply preferring not to renew is generally not sufficient grounds.

What happens if I ignore the notice?

If you do not respond, the operator can apply to the court for a new tenancy on their proposed terms. You lose your negotiating position entirely.

Will my rent go up or down?

This depends on multiple factors including: the current rent, market conditions, the property's value, and whether the 1954 Act applies. We have secured rent increases for many landlords who were initially faced with reduction proposals.

How long does the process take?

From receipt of Section 26 Notice to finalised terms typically takes 6-18 months, depending on whether agreement is reached through negotiation or tribunal determination.

Do I need a solicitor?

Yes. This is a legal process involving property law, tribunal proceedings, and significant financial stakes. You need both a solicitor and a specialist telecom surveyor.

Can the operator evict me if we can't agree?

Not immediately. If you cannot agree on terms, either party can apply to the Upper Tribunal (Lands Chamber). The process is designed to protect both parties' interests, not to facilitate summary eviction.

Procedural Timeline: Key Deadlines

Understanding the exact timeline is critical. Here's what happens at each stage:

Day 0: Notice Served

The operator serves the Section 26 Notice on you. The notice must:

Be in writing
Identify the property
Specify the proposed start date of the new tenancy (must be between 6-12 months from the date of the notice)
Specify the rent proposed (if you don't propose rent, the tenant can apply to the court)

Within 2 Months: Your Response Deadline

You must respond within 2 months of service. Options:

Accept the terms proposed — new tenancy granted on those terms
Counter with your own proposals — negotiation begins
Oppose on statutory grounds (e.g., landlord's intention to redevelop)
Do nothing — risk losing your rights

If No Agreement: Court Application

If negotiations fail, either party can apply to the court. The court will determine:

Whether you're entitled to a new tenancy
The terms of the new tenancy (rent, duration, other terms)
This can take 12-18 months

Key Deadlines Summary

| Stage | Deadline | Action Required | |-------|----------|----------------| | Notice served | Day 0 | Acknowledge receipt | | Response deadline | 2 months | Accept, counter, or oppose | | Court application | If no agreement | Solicitor files application | | Court hearing | 12-18 months | Attend hearing | | New tenancy start | As specified in notice | Terms take effect |

What Happens If You Miss the Deadline

Missing the 2-month deadline can be catastrophic:

Scenario 1: Operator Applies to Court

If you don't respond, the operator can apply to the court for a new tenancy on their proposed terms. You lose all negotiating power.

Scenario 2: Loss of Protection

You may lose your 1954 Act protection entirely, leaving you vulnerable to:

Higher rent (as determined by the court)
Less favourable terms
Potential eviction if the operator claims ground for possession

Scenario 3: Automatic Tenancy

In some cases, if you don't respond properly, the court may grant an automatic tenancy on terms far less favourable than you'd negotiate.

Bottom line: Never ignore a Section 26 Notice. Seek professional help immediately.

Section 26 Notice vs Paragraph 31 Notice: Which Applies?

Understanding which notice applies to your situation is crucial:

Section 26 Notice (Landlord and Tenant Act 1954)

Applies to protected commercial tenancies
Tenant (operator) requests a new lease
Landlord can oppose on specific grounds (Section 30)
Rent determined by market value

Paragraph 31 Notice (Electronic Communications Code)

Applies to Code rights (telecom-specific)
Operator seeks to impose rights on landowner
Can be used even without tenant relationship
Rent determined by "no-network" formula (post-PSTI: significantly lower)

Key point: If your lease has 1954 Act protection, Section 26 applies. Operators may try to use Paragraph 31 instead to secure lower rent — but this is legally challengeable.

What Happens If the Operator Doesn't Respond

If the operator fails to respond to your counter-notice:

Scenario: Counter-Acceptance

If you accept their offer, a new tenancy is created on those terms.

Scenario: No Response (After Your Counter)

If the operator ignores your counter-proposal:

You can apply to the court for determination
The court will set terms based on evidence from both parties
Typically results in better terms than operator's initial offer

Scenario: Operator Withdraws

If the operator withdraws their notice:

Original lease continues unchanged
They can serve a new notice later

Costs and Who Pays

Understanding who bears the costs in Section 26 proceedings:

Landlord's Costs

Surveyor fees: £1,500-5,000
Solicitor fees: £3,000-15,000+ (if tribunal proceedings)
Expert witness fees: £2,000-10,000

Operator's Costs

Typically bears own costs
Under Paragraph 84 of the Code, operators often required to contribute to landlord's reasonable costs

Cost Recovery

In successful tribunal cases, landlords can often recover a significant portion of their costs from the operator. This includes:

Surveyor's fees
Legal fees
Expert witness costs

Important: Always negotiate cost provisions early. Some operators will contribute to costs as part of settlement.

Interaction with Paragraph 30/31 of the Electronic Communications Code

The relationship between 1954 Act and Code notices is complex:

Paragraph 30: Restriction and Modification

Allows operator to apply for rights to be imposed
Used when voluntary agreement fails

Paragraph 31: Terms of Agreement

Sets framework for tribunal-determined terms
Post-PSTI: heavily favours operators

How They Interact

Pre-2017 leases: 1954 Act typically applies
Post-2017 leases: Code may apply
Mixed sites: Complex analysis required

Critical: The CTIL v Ashloch case established that operators cannot retroactively apply Code terms to 1954 Act-protected leases. This is a powerful negotiating point.

What Operators Don't Tell You

Telecom operators often present Section 26 Notices in ways that favour their interests:

"You Must Accept Our Offer"

False. You can reject, counter-propose, or oppose. The notice is the START of negotiation, not a final offer.

"The New Code Applies"

Not necessarily. If your lease has 1954 Act protection, the 1954 Act applies — not the ECC. This is a critical distinction that can be worth £100,000+ over the lease term.

"This Is Final"

Nothing is final until agreement is signed or the court rules. There is always room for negotiation.

"You Have No Choice"

You always have choices. A specialist telecom surveyor can often secure significantly better terms than the operator's initial proposal.

Case Study: How We Helped a Landlord Secure £45,000 More

Situation: A landowner in Hampshire received a Section 26 Notice from CTIL proposing £8,500/year rent for renewal.

Our approach:

Confirmed 1954 Act protection applied (lease granted 2002)
Obtained independent valuation showing market rent of £14,200/year
Negotiated aggressively on all terms
Prepared for tribunal application

Result: Final agreed rent: £13,500/year — £45,000+ additional value over a 5-year lease.

This is the power of expert representation.

Real Example: How the Process Works

Scenario: Landowner X in West Sussex

Background:

Site: Rural mast on agricultural land
Current rent: £6,500/year
Lease expiry: March 2026
Operator: CTIL (Cornerstone)

Timeline:

| Date | Event | |-------|-------| | January 15, 2026 | Landlord receives Section 26 Notice proposing £4,800/year rent | | January 20, 2026 | Landlord engages The Phone Mast Advice Company | | February 5, 2026 | Counter-notice served with proposed rent of £9,200/year | | February-March 2026 | Negotiation period — operator reduces to £7,500 | | March 20, 2026 | Final agreement: £8,200/year | | April 1, 2026 | New lease signed |

Result: Instead of accepting £4,800/year (47% reduction), landlord secured £8,200/year — £17,000 additional value over 5 years compared to accepting operator's initial offer.

What Would Have Happened Without Professional Help

If the landlord had accepted the initial offer:

5-year loss: £4,800 × 5 = £24,000
Total rent received: £24,000

With professional representation:

Final rent: £8,200/year
5-year total: £41,000
Additional value: £17,000

Our specialist team can help you navigate Section 26 Notices and secure the best possible outcome:

Phone Mast Lease Renewals — Comprehensive renewal negotiation
Rent Reviews — Ensure you're receiving fair market rent
Free Lease Check — Initial assessment of your position
Contact Us — Discuss your specific situation

Legal References

Need advice on a Section 26 Notice? Contact our specialist team today on 01691 791543 for a free, no-obligation consultation.