Cellular Tower Lease: Are You Getting What You Deserve?
Cellular tower companies are in need of real property for their celluar tower activities. Their activities involve serious kinds of equipment from the tower pole, electrical units, cables, wiring, electrical generators. It not safe in some cases to spend much time near the facility. In their lease negotiations they send out field representatives to tie down property and secure a lease, much like in wildcatting days of oil and gas in getting an oil and gase lease from the real property owner. They can locate a “general area” for the cellular tower then ask the owner to sign a one-sided lease in their favor and then promise to survey the property later. These leases are form leases from large communications companies. Make sure you know what is agreed upon in the lease with regard to the size of the leased premises, the rent paid, the escalation of the rent, and the rights of the landlord. Be wary of provisions that tie down a certain area. The tenant could claim that it means something else. If you agree on a common area don’t let the cellular tower use any more property than what is allowed in the lease. They have been known to move the boundary lines to make room for sublessees. Watch the permitting process to make sure that they don’t use incorrect surveys with the city that is permitting the property. The cellular tower companies like to set up separate companies just for the individual site so they can limit the risk of the activity. They like assign the lease to another entity to “manage” the property, which means – deal with the new entity who is not looking out for the landlord. Then the companies are always reorganizing, assigning and subleasing the property and also subleasing to affiliated entities without the landlord’s knowlege. The landlord never knows who is actually running the property or what is truly going on the property or the amount of revenue that is really being made off of the property. This is part of the cellular tower’s effort to keep this information quiet while they contend that you should only get the rental value of the real property itself. By all means – let’s not let a landlord participate in the revenue. If we did that then all landlords would want a slice. Be careful with the cellular tower lease and don’t let the company dictate the terms. They need the space and there is no reason to bargain away your rights to a one-sided lease that has no real rights to the landlord except to sit through a bad lease until it ends. That is another effort – to get the lease spread out for many years. Some sublesses have even come on the property and claimed “adverse possession” to property that is under lease. If you are asked to sign a lease amendment, a ratification document, memorandum of lease, to acknowledge a new arrangement, consult with an attorney. While a memorandum of lease is common in all transactions sometimes they are used to increase the size of the lease.These can be signs that something else is in the works and the tenant is seeking to correct things in their favor. Make sure there are default provisions that allow the landlord to terminate the lease. The cellular tower company could have a different copy of the lease than what the landlord is given. This has happened. If you get into litigation with celluar tower companies get ready for quite a dispute. They typically claim that everything is “confidential” and want court orders prohibiting the use of information. The best time to protect your interests is before signing the cellular tower lease.