If a landowner is approached to allow a cell tower or any other wireless equipment on their property, they must first establish what their bargaining power is in this transaction.
Cell tower lease negotiations are highly dependent on the typical features of the proposed location of the cell tower involved. And, in order, what the perceived value of the property is to the Cell Phone Company or cell phone operator with that apparent value that varies from site to site and cell Tower Company to cell Tower Company.
1. Monthly Rentals from Mobile Tower
The rent offered will be based on abundant and varied dynamics. The most significant factors are: a) The space conditions of a cell phone company or cell phone operator to install its equipment, and b) the utility and general functionality of the cell tower location for that cell phone tower.
The amount of space will depend on the type of equipment that will be located on a property. The cell tower company will look for enough space to install its equipment as well as enough space to accommodate potential subtenants / co-locators.
2. Co-location and Sublease Fees
Cell phone operators build cell phone towers for their functionality, but a cell phone tower company builds cell phone towers only for their revenue potential. Think of a cell phone tower as a shopping mall in the sky. So, a landowner must share this income, right? Along with the basic monthly rents, the landlord should be aware of the possibility of obtaining some bonus rent from the income sharing with the tenant as well.
It is to the owner’s advantage to determine precisely what options a cell phone tower company or phone operator may have and, more significantly, the value that the site will eventually obtain for the tenant in the form of income during the lease period. More details!
3. Termination and Commencement of the Cell Tower Lease
The owner is generally asked to commit to the long term when it comes to cell tower leasing a part of their property. These leases classically have an opening term of five years, with between three and five succeeding options of renewal terms and conditions at the sole discretion of the tenant. The intellectual behind the long-term nature of these leases stems from the costs involved in the installation of the tower and much other equipment installed at that location, and in the essential progress to the site itself.
So, a cell tower company should occupy and use the site long enough to be up to recoup a sensible amount of their investment. Due to the money and time involved, a cell phone company will never give the property owner a broad right to dismiss at the end of a lease or renewal term. Although this somewhat limits the property owner’s control of the location, this can also be good for the property owner as it relates to the term of the lease.
4. Termination of the Lease
The owner will normally notice that a cell tower company will request an initial termination clause in a cell phone tower lease only thirty days in advance per written. The general reason for this termination clause is that the carrier should be able to dismiss if it loses its license or permits to operate, or, more significantly, if it finds that the site of the tower is not suitable because of changes in economic conditions.
The owner of a property is able to work to negotiate terms that establish rights that are useful to the landowner while controlling the obligations that similar party can have under that same agreement. The first step for a property owner should be to establish the Real Value of their site and go from there. For more information, visit: https://www.fairbanksopenradio.org/do-cell-tower-lease-companies-pay-landowners-fairly/