The 2017 Electronic Communications Code and Security of Tenure under Part II of the Landlord and Tenant Act 1954
The new Electronic Communications Code ("New ECC"), which is set out in Schedule 1 to the Digital Economy Act 2017 ("2017 Act") and provides telecommunications operators with statutory rights in relation to their apparatus, came into force on 28 December 2017.
The New ECC replaces the original Electronic Communications Code (“Original ECC”), which is found in Schedule 2 to the Telecommunications Act 1984 (as amended by Schedule 3 to the Communications Act 2003).
One of the consequential amendments upon the introduction of the New ECC is to section 43 of the Landlord and Tenant Act 1954 (“1954 Act”). This article will discuss the interplay between the Original ECC and the 1954 Act and how the position has changed following the entry into force of the New ECC.
Position under the original ECC
A particular criticism of the Original ECC relates to the overlap between it and the 1954 Act. When the Original ECC was in force, there was no exemption for telecommunications leases from the security of tenure provisions of the 1954 Act. Those provisions operated alongside and in addition to the rights granted to the operator under the Original ECC. However, the protection afforded by the 1954 Act could be excluded in the usual way.
If a lease that was subject to the Original ECC was also protected by the 1954 Act, an occupier wishing to terminate the arrangement would not only have to serve the requisite notice under paragraph 20 or 21 (as applicable) of the Original ECC, but would also be required to serve a notice under section 25 of the 1954 Act. It was also arguable that an occupier to a lease protected by the 1954 Act was not “entitled” to serve a notice under paragraph 21 of the Original ECC requiring removal of the apparatus because the operator had the right under the 1954 Act to renew its lease.
Telecommunications leases granted after the entry into force of the new ECC
Following the entry into force of the New ECC, telecommunications leases granted after 28 December 2017 will not be protected by both the New ECC and the 1954 Act. Only one regime can apply. This is clear from the wording of both the 1954 Act and the New ECC.
Section 43 of the 1954 Act has been amended following the entry into force of the New ECC. A new subsection (4) provides that Part II of the 1954 Act does not apply to a tenancy which is granted after the New ECC comes into force and the primary purpose of which is to grant code rights within the meaning of the New ECC. The termination of such a tenancy will be in accordance with Part 5 of the New ECC.
Paragraph 29 of the New ECC provides that Part 5 of the New ECC does not apply to a lease that is protected by Part II of the 1954 Act (disregarding any agreement under section 38A of the 1954 Act to exclude security of tenure) and the primary purpose of which is not to grant code rights. The termination of such a lease will be in accordance with Part II of the 1954 Act.
Thus a lease granted after 28 December 2017 with the primary purpose of granting code rights under the New ECC will need to be terminated in accordance with Part 5 of the New ECC. A business lease granted after 28 December 2017, the primary purpose of which is not to grant code rights, will not be subject to Part 5 of the New ECC, whether it is contracted out of Part II of the 1954 Act or not. Termination of such a lease would be sought outside the New ECC, either in accordance with the 1954 Act if it is applicable, or through possession proceedings if it is not applicable. No definition or guidance is offered on the meaning of “primary purpose”.
However, in the New ECC, the termination of code rights and the removal of apparatus are distinct procedures. Notwithstanding whether Part 5 of the New ECC or Part II of the 1954 Act applies to the termination of the arrangement, the removal of apparatus is still governed by Part 6 of the New ECC.
Telecommunications leases subject to the transitional provisions of the new ECC
The entry into force of the New ECC has the effect of repealing the Original ECC. The transitional provisions set out in Schedule 2 to the 2017 Act provide that the New ECC applies to subsisting agreements under the Original ECC, subject to specified modifications.
Under the transitional provisions, the termination provisions in Part 5 of the New ECC apply to subsisting agreements with modifications, unless the subsisting agreement is a lease and:
- the lease is subject to Part II of the 1954 Act and protection under the 1954 Act has not been excluded by agreement under section 38A; or
- the primary purpose of the lease is not to grant code rights and 1954 Act protection has been excluded by agreement under section 38A.
In those circumstances, Part 5 of the New ECC will not apply to the subsisting agreement.
The New ECC has sought to deal with the criticism previously levelled at the overlap between the Original ECC and Part II of the 1954 Act, which placed a burden on the landlord to comply with both the Original ECC and Part II of the 1954 Act when terminating a telecommunications lease. While the New ECC and section 43(4) of the 1954 Act draw a distinction between those leases which are subject to Part 5 of the New ECC and those which are not, it will be interesting to see how in practice this plays out.
This article first appeared in Thomson Reuters Practical Law, January 2018.