What’s the difference between wayleaves and leases?

Trenches Law News   •   April 23rd 2021

As the UK heads towards a gigabit-capable future, more network providers will be required to connect homes, businesses, and schools with telecommunications infrastructure at pace – and in a cost-effective way.

However, it’s not always a simple or swift process, as regular readers of our blog will know. The first step requires you to obtain the right to proceed from a landlord or landowner, with them signing an access agreement – the most common ways to achieve this are via wayleaves or leases.

But when it comes to identifying which agreement is right for you, what do you need to know? And what must you consider, and understand, before taking those all-important next steps to ensure high-speed connectivity? We explain further…

Determining whether a wayleave or lease will be required depends on individual circumstances. Unfortunately, there isn’t a one-size-fits-all answer as in each case it comes down to what a landowner is comfortable with agreeing.

So, while this might seem incredibly complex, let’s firstly break down the two terms.

What is a wayleave?

This is a contractual licence over the land. In most cases it grants the rights to install and retain apparatus.

How does a lease differ?

Comparatively, these are contractual agreements which grant rights to the exclusive possession of a let property, for a specific period of time.

Knowing the difference between these two terms is important. As explained by Government guidance, there are some key issues to consider when negotiating an access agreement, which are:

  • What rights the network provider wants or needs to successfully install, maintain or operate their network
  • Whether the landlord/landowner is able to grant these rights
  • What the appropriate terms should be

There are many pros and cons to both agreements too. In summary:

Advantages of wayleaves

  • A wayleave tends to be a shorter document and can usually be prepared, and completed, in a more cost-effective way than a lease
  • There is flexibility as to termination of the wayleave (depending on its terms)
  • No Stamp Duty Land Tax is payable

Disadvantages of wayleaves

  • Typically, there is less security as they tend to be terminable and technically don’t ‘run’ with the land. An operator may, however, be able to rely on their Code rights
  • It doesn’t grant ownership rights, only the right to install and retain equipment. Therefore, an operator won’t have the same degree of control over the land
  • The Landlord and Tenant Act 1954 doesn’t apply, but it’s important to stress that operators could still benefit from Code rights

Advantages of leases

  • It offers security, and certainty, for operators and the lease “runs” with the land
  • Landlords have limited rights of access to the let property
  • There is flexibility for both parties via the insertion of ‘break rights’ in the lease
  • Security of tenure may apply (under the Landlord and Tenant Act 1954). However, see below for more on this subject and the interaction of the Act with the Electronic Communications Code

Disadvantages of leases

  • They’re longer documents and therefore take more time to negotiate and record terms
  • Costs will typically be higher
  • Stamp Duty Land Tax may be payable

With the pros and cons explained, let’s put this into context and relate to some of the situations you might come across as a network provider or landowner.

Which agreement do I need for exclusive possession?

A lease. This is because the operator becomes the owner of the land for the fixed term, and on the terms of the lease. Whereas wayleaves only grant rights to install and retain apparatus, not the exclusive use of an area.

Right to install or retain equipment – what should I have in place?

Both agreements apply in this instance. Wayleave consent grants operators the rights to install and retain apparatus. When it comes to leases, an operator will be able to do the same over the let property, but subject to terms and conditions. Additionally, a lease may also grant an operator any necessary rights to lay apparatus or access the let property over the landlord’s retained land, and a separate wayleave will not be required.

Is a wayleave the right option with regards to security of tenure?

No. A wayleave does not confer security of tenure under the Landlord and Tenant Act 1954, whereas it may apply to a lease if the primary purpose of the lease isn’t to grant Code rights. It’s important to note that operators can’t choose between the Act and their powers under the Electronic Communications Code, it all depends on individual circumstances.

Working with some of the UK’s largest telecoms operators, wholesalers and resellers – plus planners, construction companies and emerging brands in the sector – Trenches Law is established in its delivery of legal counsel, managed wayleave services, contracts negotiations, and more.

Have a specific query you’d like us to explore and provide our tailored support? Get in touch by calling 01256 856 888, emailing enquiries@trencheslaw.co.uk or visit our Contact Us page.