Cell Tower Lease Terminations

If you are a landowner or a building owner who is currently engaged in a cellular lease with Nextel, Cingular, or Alltel, it’s possible that you have already received a notice of termination due to their mergers with Sprint, AT&T, or Verizon, respectively. If you currently have a lease with MetroPCS, Clearwire, or Leap (Cricket), there is a chance that you may receive a termination notice in the upcoming years due to their mergers with T-Mobile, Sprint, or AT&T respectively.

How to Respond to Termination Notices:

If and when you receive a termination notice, your course of action depends upon what type of lease that you have.

Building Owners and Cell Sites. Termination notices from wireless carriers to building owners typically request that the carriers (e.g., the tenant) be allowed to leave equipment at the cell site. The tenant will suggest that the equipment is valuable and that agreeing to keep it will make your property more attractive to other wireless carriers. This is true only in the case where the original tenant had installed a steel platform; as for the rest of the equipment, including coaxial cables, we advise that you request its removal, as well as the restoration of the rooftop to its original condition. If not, you will end up removing it on your own dime.

Landowners and Cell Towers. If you are a landowner who is leasing ground space for a tower on your property and the tenant no longer is going to use the tower, you will receive one of two different requests.

However, what they don’t tell you is much more important:

  1. The tenant will ask if you want to leave the tower on the property. In this case, it becomes a bit more difficult to decide what to do. The downside is that the tower is never used by another wireless carrier and you become responsible for removing it. Many land use ordinances have clauses that require the landowner to remove the tower if it is not used for a fixed period, often 1 year. If you are required to remove the tower, you might end up paying $25,000 or more to remove the tower. However, there is upside to keeping the tower. It is possible that another wireless carrier might be interested in using the tower. While we can’t help you find another wireless carrier, we can advise you on whether there is a good probability of someone being interested in using it in the future, based upon the location of other towers in the area.
  2. The tenant will ask you to abate (pause) the rent for a period of a few years while they try to find another tenant. They will continue to market and maintain the tower, but you won’t get any rent during that time. If you don’t agree, they threaten that they will terminate the lease. As in the above situation, you might be better off having the tower removed, especially if there isn’t much probability of future users on the tower. In general, we don’t believe that a tower company should be entitled to keep the tower on the property without paying rent. If they know that another wireless carrier will be interested, they won’t terminate the lease regardless of whether or not you agree to abate the rent. Whatever you do, do not agree to an abatement if the amendment releases the tower company from removing the tower if they are unsuccessful at finding another tower.

If you have received a notice of termination, feel free to reach out to us. We are happy to take a quick look at your site and advise you whether it is worth your time to retain us to do further analysis. You can rest assured if we believe that your lease is worthless, we will tell you that without charging you. However, if we think they might be an opportunity to improve your situation either short or long term, we will provide a proposal for services and tell you what our services will cost and what we expect to review and find in our evaluation.

If you are worried about termination, but have not yet received a notice. You might have been contacted by a company (other than the company with whom you are engaged in a lease), who has suggested that your existing cell site lease might be terminated if you do not agree to certain amendments. This strategy is used to persuade landowners to decrease their rental revenue, and may or may not signify that there is a real risk of termination. Often times these third-party companies use scare tactics to frighten landowners into selling the rights to their lease. Steel in the Air can help you to determine the likelihood that your list might be terminated.