Cell Tower Lease Amendments: Purpose and Types
What is a Cell Tower Lease Amendment?
Almost all cell tower sites involve one or more types of cell tower leases. With most leases lasting 25 years or more, there may be a requirement to “amend” the lease to change the terms or conditions in the lease. As technology, legal, and infrastructure requirements change, so must the leases, via an amendment.
Contact Us
The Purpose of Cell Tower Lease Amendments
The primary purpose of a cell tower lease amendment is to modify some of the terms of the lease without having to redo it entirely. Typical changes in an amendment may include:
- Lease Duration
- Lease Rate
- Lease Area
- Permitted Use or Permitted Equipment
- Adding a right of first refusal
- Removing termination rights
Generally, wireless carriers and tower companies prefer not to amend a lease unless the changes are favorable to them. For example, a carrier may want to change out equipment that isn’t allowed under the lease. Rather than telling you they need an amendment to do so, they will imply that the changes are allowed under the lease. In other words, if they are sending you an amendment to sign, you can bet that they stand more to gain than you do.
Type of Cell Tower Lease Amendments
Here are the most common cell tower lease amendments we run into.
Extensions or Lease Renewals: Most cell tower leases were originally set up to run for 20-30 years. Now that it has been 20-30 years since these leases commenced, it is also time to renew/extend them.
Early Extension Requests: Many cell tower companies are trying to encourage landowners to extend their lease far in advance of the actual expiration date. The tower companies may offer a small one-time sum ($10,000 or so) to encourage you to extend your lease. In 95% of situations, these early extension amendments are flat-out bad deals.
Lease Area Expansion: When the carriers originally built their towers or cell sites, they may not have planned for all their future needs. Whether they need to add a generator or expand the lease area for more equipment, or simply to add another wireless carrier to the tower, an amendment would be required to expand the lease area.
Equipment Modifications: Some leases allow a carrier to make equipment modifications without additional rent or an amendment. However, some do not. The problem for most landowners though is that a wireless carrier will almost always claim they can modify their equipment under the existing lease. In some cases, an amendment is necessary.
Rent Reductions/Renegotiation: There is an entire sub-industry in wireless dedicated to trying to trick you into negotiating a lower lease rate. Lease optimization companies love to try to convince you to lower the rent. They imply that the lease will be terminated if you don’t negotiate. But that rarely ever happens.
How Steel in the Air Can Help.
Over the last 20 years, we have seen it all. Our clients have collectively executed thousands of amendments that put them in a better position. If you don’t know whether the proposal you have received is a good one, chances are it isn’t. We can help you determine the best course of action. We will advise you on whether an amendment is necessary and whether it is beneficial.
Too many times, a landowner contacted us AFTER they signed an amendment. Sometimes they know they made a mistake and ask for guidance on how to correct it. Other times, they don’t even realize that they gave up hundreds of thousands of dollars over time. Below is an example of a recent scenario we reviewed. The client (an elderly person) signed an amendment extending their lease agreement at the same rate as they were then being paid. Had they used our services, they would have realized they could have easily doubled the lease rate without any risk.
This landowner would have received nearly $140,000 extra income over the first 10 years of the lease had they reached out to us BEFORE they signed the amendment. We can’t promise that every situation will yield the same results- each lease is different.
Before you sign any amendment or give approval to a carrier to make changes at the site, we recommend contacting us. The initial inquiry is free – we will review your situation and let you know if a cell tower lease amendment is required or recommended. If so, we will provide a quote to evaluate your situation and advise you on how to proceed.
