Cell Tower Leases: Boon or Bane

Although many people object to the way cell towers look in the landscape, a cell tower lease can provide a welcome source of additional revenue for the landowner.  Most cell towers exist by virtue of a lease between the landowner and the cell tower company (although cell towers can also exist through an easement).  The lease is ordinarily prepared by the cell tower company and presented to the landowner for review.  While the leases are usually rather simple, the landowner should consider the following issues before they sign the lease:

1.         The landowner should make sure that the cell tower company has agreed to comply with all applicable laws concerning the use and operation of the cell tower.

2.         The cell tower company should agree to remove the cell tower at the end of the lease term.  If possible, the landowner might want to negotiate an escrow fund of money to be made available in the event the cell tower company fails to remove the tower at the end of the lease term.

3.         The cell tower company should agree to indemnify the landowner against any injury that is caused by the use or operation of the cell tower.  In addition, the cell tower company should agree to provide the landowner with evidence of insurance.

4.         The cell tower company should agree to obtain all permits required to maintain and use the cell tower on the property.

5.         The cell tower company may seek to sublet space on the tower to a variety of different cellular service providers.  If this is the case, then the landowner should negotiate the right to obtain additional rent for each sub-tenant that co-locates on the tower.

6.         The landowner should be aware that most cell tower leases provide that the cell tower company may terminate the lease at virtually any time.  The landowner does not have a similar right.

7.         The landowner should understand how electricity is billed and paid for by the cell tower company.  The best practice is for the cell tower to obtain its own electric meter and have the cell tower company pay the electric company directly for usage consumed on the tower.

8.         The cell tower lease will usually prohibit the landowner from conducting uses on the property that interfere with the operation of the cell tower.  Accordingly, the landowner needs to make sure that the current or future uses of the property are not likely to interfere with the cell tower.  This is more important when the cell tower is located on a business or industrial property.

9.         Make sure that the location of the cell tower on the property does not unreasonably interfere with the ability to sell the property in the future.  For example, the landowner would not want the cell tower to be located in the middle of a large parcel which would prhibit the development of the parcel for any other use.

For more information on leasing or other real estate matters, contact Todd K. Helwig, LEED Accredited Real Estate Attorney at Mirick O’Connell at 508-791-8500.

About Todd Helwig

Todd is a real estate attorney at Mirick O'Connell who assists clients with buying, selling and leasing business and commercial real estate. Todd is a member of Northborough Conservation Commission and the Northborough Community Preservation Committee. He lives in Northborough with his wife and three daughters.
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