Current Issues in Cell Tower Leases and Lease BuyoutsAssociation of Construction and Development
April 4, 2013 — 2,215 views
With an explosion of technology, even a quarter million cell tower sites have not been enough to cater to the network needs of citizens in the United States. Every minute hundreds of companies are launching new applications, and people use cell network to access emails, websites, music, videos, games, and other applications. The government is working on acquiring new cell sites, and modifying existing ones to increase internet coverage and speed.
Existing Situation on Cell Tower Leases
It all begins with a property owner receiving a letter in his mailbox from a wireless company displaying interest in the property for a cell site. The company would offer what seems like a great deal of money to lease the property that would tempt the property owner into agreeing to the proposal. These property owners rarely receive the right value of their property from the companies. Every year the revenue on the sites increase because of the number of antennae and carriers on the site, but the owner would be underpaid on the lease. Also, he would not be able to use the site, take out a mortgage, or develop it.
There are other companies that approach property owners who have already leased their properties out to cell sites. They offer to buyout the leases for what seems like a good value to the land owners. Again, the land owners do not realize that they are selling their properties at a price well below the market value. This has become a big issue since there are many companies that are forcing tower owners and landowners to give up their sites. Cell site lease buyouts and cell tower leases have now become a matter of great concern for property owners.
The Cause for the Booming Problem
Cell tower and wireless companies are trying to expand their lease rights to use both ground and rooftop sites through legal methods by acquiring complete rights to the property. Once the leases expire, renewal would call for increase in rates since the land value has considerably risen in the past few years. Since there are so many cell sites in the country that have been acquired over a period of two decades, the tower companies have not been able to maintain proper records and keep tabs on lease expiration, and expenses.
If a lease has already expired, the tower companies would have to terminate, renew, or renegotiate the contract which would again require shelling out a huge sum of money. Lease buyout companies are in competition with tower companies to gain access to these cell sites. The tower companies cannot afford to negotiate terms with the lease buyout companies who have extensive knowledge about the telecommunications industry.
Protection of Property Owners
If property owners decide to lease out their land, they must first find out the true property value. Subsequently, the property owners should be informed about how lease payments are affected, and must be able to negotiate terms as and when the market value increases. Landowners also need to know that cell tower leases are like hitting jackpots, and should take advantage of their existing leases to avoid lease terms and make more money.
It is advisable to always have attorneys oversee cell tower lease documents before agreeing to the terms, and add clauses that protect the landowners in case things go wrong.