December 8th, 2018 | Updated on May 25th, 2021
Owning a cell tower comes with a lot of problematic scenarios that may be too much for you to handle. First of all, there is limited information on cell tower lease agreements. It is simply just not common knowledge.
Most business moguls have probably not even heard of it. And while it is easy to research about it now, given that we are living in the digital age, it would simply just be futile to learn about an entire industry. Besides, there is a very small chance of being contacted by a wireless carrier company.
If you do get contacted by one, the best way for you to do is to learn the ropes and then find an expert, such as Terabonne cell tower consultants, who are experienced in the field of cell tower lease agreements.
This ensures that you do not get lowballed by the wireless carrier companies and that you agree to amicable terms.
Don’t be overconfident and think that you can outsmart businessmen who have been in the industry for years. They are trained to give you as little as they could. If you’re interested in cell tower lease agreements, read ahead and learn the basics.
Is a Cell Tower Lease Agreement different than Residential and/or Commercial leasing?
Yes. While the gist of it is the same – you let them stay in your property in exchange of an agreed upon amount of cash, cell tower lease agreements are just quite different.
In the case of Cell Tower Lease Agreements, it is the tenant that brings forth a list of terms and guidelines to be followed. This differs from the usual terms handed out by the landlord.
Components Of a Cell Tower Lease Agreement
Cell Tower Lease Agreement has a lot of parts — some of which you would want to pay attention to.
1. Rent Explanation
As the landlord, it is only natural that you place a lot of emphasis in this part of the agreement. The rent that a landlord receives have varying amounts.
There are no pricing matrix when it comes to Cell Tower Leasing. It will depend on a lot of factors like competitors around the area location, logistics and the number of customers using that cell service.
Even if you are in an ideal location with the right conditions, companies will still try to offer you a low amount, especially if they know that you are not well-informed about their industry.
Having a professional consultant by your side would be helpful, especially when negotiating with the price of rent.
Don’t settle for the first price even if it may be huge already for you. You can always get more with a knowledgeable person beside you.
2. Agreement over co-location fees and Subleasing
This simply means a carrier pays another carrier i.e. the original tenant, to rent some land off the other.
This can get complicated really quick so having a consultant to help you will save you a lot of trouble and make sure that you do not lose out.
3. Duration Of The Lease
The usual duration of a typical lease starts at five years. Of course, the option to renew the lease is available for up to the maximum of 25-30 years.
You do not have to be a landlord to know that 25-30 years of rent is very appealing.
However, before signing that long-term agreement, know that the wireless carrier company has the option to leave anytime they want. That’s right.
They can just choose a random day and decide to cancel the contract and stop paying you rent. This is called the Early Termination Clause and the reasons vary like lessened population of users around your area, changes in technology, etc. There is no predicting if the wireless carrier will stay or not.
Unfortunate for the landlord, you will also be left with the “cleanup.” Demolishing the remaining structures that were left behind by the carrier is left to you — that is, if you want your property to look nice again.
Without a professional guiding you through the fine print, you can easily lose out on a lot of clause. This can go from low rent to unethical demands.
The assistance would help you get to a better vantage point where you can negotiate for better terms and pricing. With the expertise of one at your disposal, you can discern other revenue opportunities to enjoy!
4. Access to the properties
Wireless Carrier Companies will usually request for carte blanche. This means full discretionary power to the cell tower and by extension, your property.
A consultant will ensure that you get favourable agreements like carte blanche limited only to business hours. Of course, negotiations still depends on how valuable your property is to carriers.
5. Interference
The absence of interference is extremely crucial for carriers. After all, the reason that they are paying you rent is to provide quality wireless cell phone service to their customers.
Interference can drive out cell towers away from your property. Obviously, wireless carrier companies don’t want the burden of costs for removing the interference.
This will then rely on how your negotiations go. Best case scenario would be if they agree to take responsibility in fixing what causes the interference but this can be quite difficult without a well-informed consultant by your side.
The importance of having a professional during the negotiation is quite vital. You might think that you can outsmart and win against businessmen but you can’t. The assistance will make a difference and help you gain more favourable terms.
6. Early Termination Clause
As explained above, there is an Early Termination Clause on Cell Tower Leasing Agreements which allows cell towers to just up and leave even before the contract is finished.
Innovations in technology such as the invention of a higher, more advanced cell tower or the eradication of the need for such is one valid reason for companies to suddenly end their contract with you.
Another more common reason is the availability of a “better property”, though usually it’s just a cheaper, alternative location.
You cannot just remove the Early Termination Clause as it also benefits the landlord should he no longer wish to continue renting out his property. A good negotiator can mitigate the problems a landlord will face should a wireless carrier company decide to jump ship.
They can make it difficult by adding terms like a 6-month notice or a premature end of contract payout. This usually makes companies think twice before transferring to another property.
7. Explanation of Use
The title is almost self-explanatory, however. The way it can be written can mean two different things. One such way is merely stating how the land and/or rooftop will be used.
On the other hand, it can also be written in a more comprehensive way — describing what they can and can’t do in regards to the property; typically this part is written a little bit more detailed going into depths in regards to the limitations.
This is more in benefit of the landlord. Moreover, this component applies to the sub-lessees for them to respect.
Before you go down the rabbit hole, check out this link to know more. It wouldn’t hurt to do a little bit more research before heading to battle.
