Zoopla Property : Landlords should be given fair deal with telecom operators, says British Property Federation

May 1, 2015

Changes to the Electronic Communications Code could hinder property development and deter landlords from agreeing deals with telecom operators, the British Property Federation has warned.

The Government published new plans in March to reform the Electronic Communications Code (ECC) in a bid to improve consumers' access to digital services - and the consultation closed this week.

However, there are three provisions which risk making deals between landlords of office, retail, leisure and industrial properties and telecom operators less likely, according to the British Property Federation (BPF).

They include new rights for telecom providers to update equipment without permission, and also to share a site with other providers without the landlord's consent. It will cause landlords to lose significant control over aspects of their property, including its appearance.

The industry body also highlighted a new right for the Secretary of State to amend the basis of market valuation that would reduce the rent received by landlords to virtually nil. Furthermore, it said an 18 month notice period to end an agreement under the code which also deter agreements between the two.

The BPF has been lobbying for landlords and telecom providers to have the right to opt out of the code. It would mean that telecom providers would have to remove equipment from a building at the landlord's request.

Simon Taylor, who chairs the BPF's commercial committee, argued that landlords and tenants can contract out of the Landlord & Tenant Act, so the same could be applied in this case.

Taylor, also head of asset management at Derwent London, explained: "At a recent meeting I attended, there were probably five or six major property owners in London and none of them are agreeing new lettings to telecom providers. That is because if a landlord serves notice to a telecom provider, there is a risk that they could exercise code powers that allow them to keep the equipment on the property. If a landlord wants to redevelop a building, the last thing they want to do is take the risk of not being able to remove the telecom equipment for £15,000 a year rent.

He added: "Landlords will be more likely to enter into deals with telecom operators if they can be guaranteed a fair deal."