A Code Agreement is typically in the form of a lease, easement or wayleave and the primary purpose is to confer code rights under Schedule 3A of the Communications Act 2003. Landlord and Tenant Act 1954 contracted-out leases will be Code Agreements if the primary purpose is to grant code rights. A code right can be acquired by an operator either by a court order or by written agreement with the land owner.
What are code rights?
They include the right for operators to:
- Install telecommunications apparatus on, over or under land.
- Connect to a power/electricity supply.
- Interfere/obstruct an access route.
- Upgrade telecommunications apparatus.
- Share telecommunications apparatus with a third party operator.
- Carry out works on the land in connection with the code rights.
Code agreements v Commercial leases
Code rights can be freely assigned to another operator without the consent of the landowner which differs to a commercial lease whereby a landlord usually is required to provide consent to an assignment.
An operator can apply to the court if a landowner does not confer a code right on them or does not comply with an obligation under the code rights exercisable by the operator. This is subject to providing notice to the landowner and if they do not give a counter notice within 28 days, a court order can be sought to impose an agreement. However, in usual commercial circumstances, the courts will not impose a lease between parties.
The ‘Code’
The electronic communications code is set out in Schedule 3A of the Communications Act 2003 (“the Act”). This contains a set of rights governing the installation and maintenance of electronic communications networks.
How do you terminate a code agreement/lease?
Code rights continue in statute even after the code agreement has expired which means that in order to terminate a code agreement, a prescribed procedure must be followed. A common misconception is that if a lease/agreement is not registered at the Land Registry, the terminations provisions under the Act do not apply. This is not the case. The code rights under the Act are binding whether or not the lease/code agreement is registered at the Land Registry. (per paragraph 14 of the Schedule 3A of the Act)
If a code agreement is entered into after 28 December 2017, the Part 5 termination provisions within the Act must be followed.
A notice must be served by Grantor (landowner) on the Operator which:
- Sets out the statutory ground upon which to terminate the Code Agreement;
- States the date on which the Grantor proposes that the Code Agreement should come to an end, giving the Operator no less than 18 months’ notice.
The Operator is entitled to serve a counter-notice within 3 months of the Grantor’s notice. If this counter-notice is accepted by the Grantor then the Code Agreement continues.
However, if the Grantor does not agree to continue the Code Agreement then the Operator is entitled to apply to the Tribunal within 3 months of its counter-notice for an order that the Agreement should continue.
- If the Operator does not apply to the Tribunal as per the above, the Agreement comes to an end on the date specified in the Grantor’s notice.
- If the Operator does apply to the Tribunal, the Operator must establish a statutory ground to terminate the Agreement. If the Operator is unable to establish this, the Tribunal must make an order to continue, vary or renew the Agreement. However, if a statutory ground can be establish then the Tribunal must order the termination of the Code Agreement.
If the Agreement comes to an end, the Operator must remove its Equipment on or before the date specified in the notice or where ordered by the Tribunal.
However, if the Operator does not remove its Equipment as per the above, Part 6 under the Act applies. This requires a notice to be served requiring the Operator to remove the apparatus and restore the Communications Site within a specified period. If the agreement on removal of the Equipment is not reached within 28 days then the Grantor can apply to the Tribunal for an order for removal with the ultimate outcome being that the Equipment is removed.
The above is a brief overview of the code rights and termination provisions under the Electronic Communications Code. If you would like further information or advice in relation to code agreements or leases, please contact the Commercial Property team by calling 0161 330 6821 or emailing bromleys@bromleys.co.uk