What is it?
Phone Mast Rent is a considered amount of money used to pay or compensate; landowners/ landlords for allowing phone mast sites on their land or property.
When mobile phone masts started being rolled-out nationwide in the 1980s, many landlords and the general public were concerned about the Health and Safety implications of phone masts. Cancer was one of the main concerns and new mast sites were constantly being given negative press. The result being that mobile phone operators had to pay very high rents to many landowners/landlords, simply to persuade them to accommodate one.
This created, what could be described as the “Golden Age” of mast site rentals. Some agreements that began already on high rents, saw these rents experientially increase with ongoing inflationary rent reviews and in line with Retail Price Index.
The market for phone mast rents peaked in 2012. During this time the operators entered into a new era of network consolidation and started sharing equipment. Shared information on site rental transactions became the norm and more focused on cost cutting.
Sites were also being removed due to duplications with company mergers and the operators began taking advantage of landlords/landowners and started to threaten to remove sites from landlords/ landowners that would not agree to significantly lower rents. Many of these so-called rent reductions were a tactical bluff, with no real intention to take the site down.
Before the introduction of the New Electronic Communications Code in 2017 the valuation methodology to establish market rent on mast sites was in line with most commercial leases. It adopted the RICS red book valuations principals with market rent being an arm’s length transaction wherein both parties are acting; prudently, knowledgeably and without compulsion. Comparable evidence was exchanged in negotiations between the landlord/landowners and operators agents from previously completed mast transactions to seek to establish a fair market rent.
In Dec 2017 this all changed for rents on new agreements and agreement renewals. The new law stated that with a Court imposed agreement the market rent was to be set as before but with the exemption of an electronic communications network operating from site. This means that telecoms comparables are no longer being used for Court imposed agreements. Instead, the landlord needs to prove a loss and seek compensation. The difficulty with the New Electronic Communication Act is that since 2017 it has been plagued with problems. In particular with how it integrates into long standing and well-established case law.
The market in regard to phone mast rents continues to be fought out in the Courts or in Upper Land Tribunals. This has been on going for the last few years resulting in frustration and high legal costs for both operators and landlords. The government is aware of this and is seeking to introduce new legislation. However, it seems to those concerned that the government is colluding with the operators to seek to lower phone mast rents. This means future rental income will almost certainly be reduced. Therefore, the exact amount of rent or compensation for a mast on your land or building is still not 100% clear under the new ECC Act.
If you have a phone mast on your land or property and want know what the rent you should be receiving for your mast you should contact an independent phone mast advice company for an estimate.
Please contact our office and speak with one of our Consultant Advisors, who will be pleased to advise and help you or simply fill out our online rent estimation form.