There remains cross over between legislative provisions when leases of telecommunications sites are renewed. This blog explores the renewal process under the Landlord and Tenant Act 1954 (“1954 Act”) and how the 1954 Act interacts with the Electronic Communications Code (the “Code”).
Legislative background and process for renewal
The 1954 Act provides statutory protection for business tenants. It gives them a right to renew their lease at the end of the contractual term, unless the landlord can oppose renewal on specific grounds (e.g., redevelopment or persistent breaches).
This protection applies automatically, unless it has been expressly excluded through a process known as “contracting out”.
Depending on the date of grant of the lease, there remain telecommunications leases falling under the 1954 Act if the lease granted exclusive possession of land or premises to an operator for business use.
In December 2017, the Code came into force. It is set out in Schedule 3A to the Communications Act 2003 and introduced a framework for telecoms operators to gain rights to and over land. Some of the Code benefits agreements entered into before it came into force. However, despite the Code, if an operator’s lease is one protected by the security of tenure provisions of the 1954 Act at the relevant time, then renewal of the lease must be pursued under Part 2 of the 1954 Act, not the Code.
This was confirmed in the case of Cornerstone Telecommunications Infrastructure Ltd v Ashloch Ltd (2021) – where the Court of Appeal held that renewal of leases protected under the 1954 Act must be dealt with exclusively under the 1954 Act.
Once renewed, a lease can be one to which the Code applies fully.
The valuation of rent for telecoms equipment under the 1954 Act
In Vodafone Ltd v Hanover Capital Ltd (2021) the court determined the rent in a lease renewal of an electronic communications site under section 34 of the 1954 Act. The lease being renewed was protected by the security of tenure provisions of the 1954 Act.
Rent was considered in the open market disregarding existing trading connections and any effect on rent by virtue of the existing occupation, goodwill attributable to the operator’s business, or improvements. Key assumptions were whether:
- There was a willing landlord and tenant,
- There were fair and friendly negotiations with parties acting prudently without duress,
- The same premises and same terms (except for rent) were proposed,
- The site was in the same condition as before the lease was granted (with the removal of fixtures and assuming compliance with obligations).
The case set out a structured approach to assessing rent. At the time, there was no reason to assume the site would not be used for the purpose of an electronic communications network, unlike determinations under paragraph 24 of the Code. It was the case that telecom lease renewals under the 1954 Act could yield higher annual rents for landowners than new leases being granted under the Code.
However, relevant sections of the Product Security and Telecommunications Infrastructure Act 2022 are coming into force on 7 April 2026 amending the 1954 Act to align the procedures for renewal of subsisting agreements and imposing new Code agreement terms more closely with Part 5 of the Code, where the main aim of the renewal is to confer Code rights. The rent payable under a new tenancy granted by court order will need to represent the market value of the landlord’s agreement to confer the Code rights. The market value is to be assessed as if the rights do not relate to the provision or use of an electronic communications network, and as if certain provisions of the Code (assignment, upgrading, and sharing) do not apply. Valuations under the 1954 Act will be aligned with the valuation principles under the Code.
Summary
Whilst renewals of telecoms leases may still be determined under the 1954 Act, rents for telecoms leases will mostly be determined on a “no-network” basis regardless of whether they are renewed under the 1954 Act or Code.
This blog has been written jointly by David Eminton, Dispute Resolution Partner, and Lisa Busby, Commercial Property Partner – both specialising in advice to landowners and operators in connection with telecommunications property matters.
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