Farmers and landowners with telecoms masts and other equipment on their land were yesterday told that they shouldn’t be misled into accepting lower rents for providing land for these facilities when the new Electronic Communication Code comes into force later this year,
The industry has seen a spate of warnings recently that the new legislation – which is designed to make mobile reception more readily available across the country – would see rental values fall.
There has been much misunderstanding of the new codeJeremy Moody
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But an expert yesterday termed it “a fallacy” that the move would give telecoms firms the ability to cut payments down to the penny rental figures used for landline services.
Jeremy Moody, secretary with the Central Association of Agricultural Valuers (CAAV) said it did not have to be the case that rents would fall.
He said that the updating of legislation drawn up in 1984 – last reviewed in 2003 – was part of a government effort to improve mobile phone coverage and access to superfast broadband, particularly in rural areas.
Pointing out that the new code featured a number of changes, he said there had been some serious misconceptions about the impact this would have on payments for telecommunication infrastructure.
He said: “Many operators see the new code as introducing compulsory purchase for telecoms infrastructure, and switching payments from market rents to compensation.”
However, Moody said it had been recognised that this could lead to a sharp drop in rent before the code was finalised – and protracted negotiations had secured a fair outcome which meant that rents remained open to individual agreement.
“The change to the definition used for valuation will only apply to new leases, with existing leases – of which there are tens of thousands – remaining unchanged until they come to an end, when the new rules will apply.”
But Moody warned that if poorly-informed landowners were led into accepting rents lower than the code suggested, this would set precedents for other agreements.
He said: “There has been so much misunderstanding of the new code that it would be easy to believe the rumours that rents are set to tumble, making for a self-fulfilling prophecy.”
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Jamie Younger, a partner with Saffery Champness, termed the move “a considerable challenge bringing most unwelcome additional red tape for business”.
He said that most farmers would need to get ready for the changes now, in order to be able to supply the quarterly updates from April 2018, with the level of detail required on the new submissions likely to be much greater than the current level for those who already supply information quarterly.
He said: “There is an urgent need for HMRC to deliver targeted support, guidance and online training soon. The system must also be secure and robust when it comes on stream in April 2018.”