A cell tower lease can be an asset for a property owner, but most property owners accept unfavorable terms because they don’t understand the real value of their property to the tower company. For the most part, tower companies will attempt to pay as little as they can get away with, while still trying to extract maximum access rights from property owners.
Here are 3 Common Misunderstandings About Cell Tower Leases:
False: All cell tower leases are the same
This is a position commonly presented to land owners by tower companies and their proxies when they are first attempting to secure property for construction of a cell tower. This proposition should be rejected. If all leases were the same, then carriers would simply present a stock form that is all but complete except for the signature.
All leases are not the same, and any lease you are to sign must pertain strictly and accurately to the property you own. The tower company is seeking a lease on your property for a specific reason, and that reason will determine the value of the lease. Good cell tower leases are negotiated carefully line by line and section by section, and each lease will be unique and particularized.
False: Cell tower leases are easy money with no liability to the property owner
In fact, a primary objective in lease negotiation for property owners is to ensure that lease rental will adequately pay for any contingent liabilities. Risks for landowners in a cell tower lease include complaints from neighbors or the neighborhood, possible lease transformation into an easement, the certainty of ongoing financial solvency of the cellular tower tenant, and the possibility of an ultimate loss in property value. Most tower owners will carry adequate liability insurance to guard against risks, but this will be an essential part of any negotiations with a carrier before entering into a lease agreement.
False: A Cell Tower Lease Will Be Easy to Negotiate
It is true that a cell tower lease will be easy to negotiate, so long as terms proposed by, or even demanded by, a carrier are simply, blindly accepted. Carriers often seek leases through third party lease acquisition agents, and those agents will probably lack any authority to enter into a lease using anything other than the contract template drafted in the carrier’s name. However, there are many particulars to a lease that must be carefully negotiated, including those already mentioned. You may wish to use a cell tower consultant during the lease negotiation.
At Vertical Consultants, we have negotiated lease agreements for individuals, businesses, and organizations across the country since 2010. As former tower company attorneys, we have inside knowledge on their negotiating tactics and how to combat them.
Contact us for a free lease review and initial consultation.
