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Expertise
16th May 2024

One notice or two?

One notice or two?

One of the good things about the latest Electronic Communications Code (Schedule 3A to the Communications Act 2003) - in fact, possibly the only good thing about it from a site provider’s perspective - is that it did away with the double security of tenure previously enjoyed by operators under Part II of the Landlord Tenant Act 1954 and the Code itself.

There is significant overlap between the two regimes. Both restrict the grounds on which a landlord/site provider can bring a lease/agreement to an end. One of the permitted grounds under both regimes is broadly speaking that the landlord/site provider wishes to redevelop the premises concerned.

In both cases, however, the lease/agreement cannot be brought to an end earlier than it could have been terminated were it not for the provisions of the Act/Code. In the case of a fixed-term lease or agreement therefore it needs to contain a landlord’s break right if it is to be brought to an end before its expiry date – a point to which I will return below.

In relation to Part II of the Landlord and Tenant Act 1954, it was determined in the case of Scholl Mfg Co v Clifton (Slim-line) [1967] Ch 41 that in order to bring a lease to an end during the term, there is no need for a landlord to serve two notices: a contractual notice exercising the break clause and a statutory notice under s.25 of the Act, as the statutory notice can do the job of both, although there may still be circumstances in which it is advisable to serve two notices to avoid doubt.

The same issue of whether it is necessary to serve two notices or just one also arises in relation to the Electronic Communications Code and has now been determined by the decision of the Upper Tribunal in On Tower UK Limited v British Telecommunications plc [1924] UKUT 51.

In that case the site provider was BT and they sought to bring their agreement with On Tower to an end by exercising a redevelopment break right. BT served two notices, a contractual break notice and a notice under paragraph 31 of the Code. The operator, On Tower, sought to challenge the validity of the notices and, amongst other things, the tribunal held that there was no need for BT to actually serve a contractual break notice. The fact that they could do so was sufficient to enable them to serve a valid paragraph 31 notice. Only one notice, the paragraph 31 notice, was therefore required.

What is also clear from the decision, however, is that in order to serve a paragraph 31 notice the site provider has to have the ability to bring the agreement to an end apart from the provisions of the Code. In other words when dealing with a fixed-term agreement, in the absence of a break clause, there is no right to terminate pursuant to paragraph 31 prior to the expiry of the term.

When granting fixed-term agreements to telecommunications operators therefore a site provider would be well advised to include a rolling break right exercisable at any time on not less than 18 months’ notice. 

I would also suggest that that break right should be unconditional to avoid any potential conflict between the wording of the break clause and the requirements of the Code. An operator ought not to object to this as their security lies in the provisions of the Code which prescribes when the break can be exercised.