Mobile tele­phone facility/​tower leas­es — 3 things you need to know if you are a landlord

In brief — Landlord/​tenant rela­tion­ship, lease agree­ments and good faith negotiations

If a telecom­mu­ni­ca­tions provider (tel­co) wish­es to install a telecom­mu­ni­ca­tions facil­i­ty on your land, you need to be aware of the points to be includ­ed in a lease agree­ment and the tel­co’s oblig­a­tion to nego­ti­ate in good faith. It is crit­i­cal that the lease agree­ment is prop­er­ly nego­ti­at­ed, oth­er­wise the land­lord could face sig­nif­i­cant lia­bil­i­ty if the facil­i­ty is allowed to fall in dis­re­pair and the tel­co has no oblig­a­tion to main­tain it. 

Back­ground — Increas­ing impor­tance of mobile phone coverage

Mobile tele­phone cov­er­age is becom­ing increas­ing­ly impor­tant as more peo­ple choose to have mobile broad­band in their homes. Telecom­mu­ni­ca­tions providers are need­ing to secure the facil­i­ties they cur­rent­ly have and poten­tial­ly install new facil­i­ties. Facil­i­ties are installed on res­i­den­tial build­ings and not just on com­mer­cial buildings.

There are three things you need to know if a tel­co wish­es to install a telecom­mu­ni­ca­tions facil­i­ty in a build­ing you own.

Tenant/​landlord relationship

The tel­co will be the ten­ant and the own­er of the build­ing the facil­i­ty is installed in will be the land­lord. If the facil­i­ty is being installed in a res­i­den­tial apart­ment build­ing, the own­ers cor­po­ra­tion will be the landlord.

Lease agree­ment between land­lord and tenant

The lease agree­ment between the par­ties should con­tain the points below.

• It is crit­i­cal that the tel­co agrees to keep its equip­ment in good repair (includ­ing any struc­tur­al or cap­i­tal expen­di­ture that is required to do so) and agrees to fix dam­age that is caused by third par­ties and acts of God. The land­lord should be enti­tled to inspect the facil­i­ty from time to time in the com­pa­ny and under the direc­tion of an employ­ee of the telco.
• The land­lord should not make any war­ranties in rela­tion to the build­ing. It would be appro­pri­ate for a land­lord to agree to keep the site of the premis­es in good repair sub­ject to fair wear and tear and the oblig­a­tions of the tel­co under the lease.
• All per­mits and licences for the instal­la­tion of the facil­i­ty must be obtained by and at the cost of the telco.
• The tel­co should be required to take out pub­lic lia­bil­i­ty insur­ance of an ade­quate amount, for exam­ple $20 mil­lion per event. This insur­ance should not be lim­it­ed in an aggre­gate amount or (in the case of injury, loss or dam­age to third par­ties) reduced because of any action of the land­lord. This pro­vi­sion is crit­i­cal as a land­lord may not be able to take out insur­ance against loss caused or con­tributed to by the facil­i­ty in some cases.
• All of the land­lord’s legal fees must be payable by the tel­co. A tel­co will be nego­ti­at­ing a num­ber of leas­es at one time and so nego­ti­a­tions can take some time.
• If you are grant­i­ng an option to the tel­co for a fur­ther term, a rel­e­vant item for con­sid­er­a­tion is the extent to which the tel­co is required to upgrade the tech­nol­o­gy used in the facil­i­ty to ensure the facil­i­ty remains safe and com­plies with any future require­ments for elec­tro­mag­net­ic radi­a­tion, among oth­er things.

Nego­ti­at­ing in good faith 

A tel­co is giv­en the right to enter on land and to install a facil­i­ty on it by the Telecom­mu­ni­ca­tions Act (Cth) 1997, but before it can do so it is required to make rea­son­able efforts to nego­ti­ate in good faith with the own­er of the land (among oth­er things).

If you have any ques­tions about an exist­ing or pro­posed telecom­mu­ni­ca­tions facil­i­ty on your land, please contact: