|When it comes to cell tower site leases, there are two types: the original
lease that is put together before the site is built and then if you decide to
sell there is a lease that 'wraps' the original lease and often times extends
well beyond the original lease term.
An original lease for a cell site, whether it is a pole, tower, camouflaged,
steeple or a rooftop site, all contain provisions that are considered 'boiler
plate' (not normally negotiable). These 'boiler plate' provisions include:
the original term, right to sublet, easements ; legal descriptions of the site
and property; payment terms for electricity, insurance and real estate
taxes; the right to terminate with notice; and the tenant's obligations under
Items that will come up that are negotiable: an escalation clause; possibly
a 'right of first refusal' or ROFR; the carrier or tower company's
'permission' for you to sell your lease.
The original term for a typical cell lease is 5 years with 5 five years
options, although this 'red herring' is normally followed closely by the, non-
negotiable, right to terminate with 30, 60 or 90 days notice for any
reason. This 'right to terminate', from their point of view, makes a lot of
economic sense due to technological advances or mergers in the industry
that could make your site economically unfeasible.
The legal description of the property and specifically the description of
the site along with easements. This may seem okay, but the devil is in the
details. Unknowingly, if you grant them a 'general easement', you are
granting them the right to do whatever they need to do and whenever
they feel they need to do it. Your cellular lease consultant will probably
offer them a 'specific easement' with the proviso that since you are
sharing the sub-lease rents and if they need more space and “why would
you not grant them additional space?”.
Typically, the care, maintenance, insurance, cost of power and the
carrier's share of the real estate taxes are to be borne by them. There
are usually penalties if these provisions are not met in a timely fashion.
The tenant will not normally bring up the subject of co-location rents or
fees, but you, or better yet, your cellular lease consultant, should. Under
the tenant's right to sublet, they will try and entice other carriers or even
users that are not necessarily cell phone companies (police, military,
radio stations, etc). These rents or fees can often dwarf what you are
receiving, making the cell lease a money making proposition for the
tenant, besides the service it is offering their customers. Hey, the tenant
probably has a hundred thousand into the permit process and at least
twice building a tower, so don't begrudge them a little greed. You can
however, negotiate a share of those sublease payments.
“The right of first refusal' or ROFR, no matter what is said, is not in your
best interest. Your cell lease attorney or consultant will explain in detail.
This prevents outside buyout firms from being interested in ever giving
your cell site lease consideration, should you need to or decide to sell.
Without an outside offer for your cell site lease, why would the carrier
want to give you a bunch of cash when they already have control of the
cell site with a modest monthly payment? They will buy it if they have to,
but only if you can come up with a legitimate offer that is acceptable to
This pretty much covers the big provisions or an original cell site lease. I
hope I made you aware of the fact that you need to consult an expert who
is familiar with cell site leases. Your attorney is probably not a cellular
expert, no insult intended.
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