Room with a View - Ten reasons commercial landlords should have a standard form wayleave agreement for fibre cabling

23 June 2020

Despite the political fallout surrounding Huawei’s pitch to provide 5G telecoms infrastructure equipment to the UK telecoms market, a key policy aim of the UK government is to make fundamental upgrades to the UK telecoms network and the capability of UK telecoms operators (Operators).

Most recently the introduction of the 2017 Electronic Communications Code set out in Schedule 1 to the Digital Economy Act 2017 (the Code) grants powerful ‘Code Rights’ to Operators seeking to install telecoms equipment on private land. The Telecommunications Infrastructure (Leasehold Property) Bill will give Operators even more rights of access to residential blocks to install apparatus but in this article, we will focus on Code Rights in commercial buildings.

Commercial landlords are more and more frequently being approached by their tenants, in tandem with Operators, and asked to sign a ‘permission letter’ allowing the Operator to run fibre cabling into a tenant’s premises via the common parts of the landlord’s estate (be it the forecourt of an industrial estate or common areas of an office building). Whilst many landlords use a standard form lease document, they rarely have a ‘standard form telecoms wayleave document’. Asset managers (without a standard form document to work with) are more likely simply to sign the Operator’s ‘permission letter’ and hope it will assist their tenants in achieving faster broadband speeds.

Below are ten reasons why commercial landlords should reconsider this approach and, when a fibre cabling request comes in, look to issue a standard form wayleave agreement. Such a document will provide the landlord with as much flexibility and control as possible and, where this is not possible owing to the Code, mirror the rights in the Code so that all obligations / restrictions are clearly set out.

1. Code Agreements’ include any agreements between a landowner and Operator relating to electronic communications apparatus which are:

a. in writing
b. signed on behalf of the parties; and
c. include a term duration.

This covers the obvious (leases) but can extend to wayleaves, licences and even those permission letters that an Operator may be asking you to sign and return. Entering into a Code Agreement will have the effect of conferring on the Operator powerful ‘Code Rights’ regardless of whether the parties formally agreed to those terms.

2.‘Electronic communications apparatus’ is a broad term under the Code; not limited to just telecoms masts on tops of buildings or in the corners of farmers’ fields, but also any wiring or cabling designed to be used in connection with the provision of an electronic communications network. This includes the fibre cabling requested by commercial tenants, which will likely benefit from ‘Code Rights.’

3. Only ‘Code Operators’ (i.e. those registered with Ofcom) can enjoy the benefit of Code Rights. However, a significant proportion of Operators are Code Operators and so; the chances are the Operator requesting permission will likely enjoy Code Rights. A complete list of Ofcom’s Register of Code Operators can be found on their website.

4. Even where a fibre wayleave is granted to a ‘non-Code’ Operator, if that Operator subsequently registers as a Code Operator, the wayleave will automatically enjoy the benefit of Code Rights. A standard form wayleave with a non-Code Operator can include a restriction on the Operator not to register during the term of the wayleave and an indemnity in the event it does. The cost of providing an indemnity can act as a powerful disincentive to become a Code Operator, and therefore enables the landlord to retain some commercial flexibility over how it uses its building.

5. One of the most significant Code Rights is the right to statutory continuation of Code Agreements notwithstanding termination of the underlying agreement. This is regardless of whether the agreement ends through expiry of a fixed period or where the landlord purports to give notice to quit. Any agreement will automatically continue until it is formally determined in accordance with the Code (requiring, broadly speaking; not less than 18 months’ written notice; and evidence that certain ‘statutory grounds’ are met).

Clearly, a Code Agreement may subsist far longer than the landowner initially anticipated (and possibly outlasting the lease term of the tenant requesting the fibre cabling). Whilst a standard form wayleave cannot prevent this, it can at least ensure any notice period is no longer than required under the Code.

6. There are no rights implied under the Code for a landlord to call on the Operator to relocate installed telecoms apparatus (known as ‘lift and shift’ provisions) in Code Agreements. A standard form wayleave can deal with this issue.

7. The Code provides that an Operator is, generally, free to assign or share the benefit of Code Agreements with other Code Operators without the landlord’s consent. While any provision in a wayleave which attempts to restrict, prohibit or penalise this will be automatically void, the landowner can, at the very least, call on the current Operator to guarantee the obligations of an incoming Operator using a standard form wayleave agreement. This could be easily overlooked without a bespoke wayleave document, as the orthodox position is only landlords of ‘new leases’ (as defined in the Landlord and Tenant (Covenants) Act 1995) can call for an Authorised Guarantee Agreement (AGA), it is not usually considered with a wayleave so an important benefit could be lost.

8.The Code enables an Operator to upgrade telecoms equipment already installed, without requiring a further Code Agreement for the upgrade. So whereas a permission letter or similar might seem appropriate at the time of the request, a standard form wayleave can cater for the possibility of more extensive infrastructure being installed on an estate in future (for example, to meet demand where other tenants on an estate also request fibre cabling to their premises).

9.The Code is silent on the position where the activities of the Operator interfere with the activities of neighbouring tenants and occupiers (indeed the Code confirms that an Operator exercising Code rights is not committing a nuisance or trespass). A standard form wayleave can include obligations on the Operator not to cause an interference with other occupiers and to ‘switch off’ telecoms equipment where it does interfere or is harmful to health; and

10. A standard form wayleave will annex the various plans, specifications / cabling routes and risk assessments to the agreement, keeping all the material information in one location and greatly assisting with asset management where queries are raised on the installation.

Please contact either James Robinson or Ryan Bigland if you receive a request from your commercial tenants or an Operator to install fibre cabling. We would be happy to review the terms of any agreement offered or to prepare a comprehensive wayleave agreement. By working with many Code Operators we have been able to negotiate terms that enable agreements to be settled quickly whilst providing maximum protection to landowners.

This article is from the summer 2020 issue of Room with a View, our newsletter aimed at professionals within the property industry. To download the latest issue, please visit the newsletter section of our website. Law covered as at June 2020.

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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at June 2020.