Bodies corporate and telecommunications providers – don’t be railroaded
By Frank Higginson29 May 2014
The race for market share in both the 3G and 4G domains remains constant amongst telecommunications providers (‘Providers’). We have had quite a few body corporate clients comprising tower buildings in recent times approached by Providers – from Telstra down to smaller market participants – seeking to place antennas on the roof.
The approach of the Providers is inconsistent. Some do not understand the strata concept and in that context the form of consent that needs to be delivered. As we all know, a body corporate consent process is different from that of a normal commercial building with one owner. Some Providers also tend to exaggerate their rights and descend into legal threats fairly quickly if there is any resistance to their proposal.
Providers have rights under Commonwealth law to access property. This extends to the right to install and maintain certain ‘low impact’ telecommunications equipment irrespective of whether consent from the owner of the land is provided.
The owner of the roof area in a body corporate is almost certainly going to be the body corporate itself, meaning that the body corporate is entity that must provide that consent. Even if the roof area was subject to a grant of exclusive use, the body corporate is still the actual owner of the area. Exclusive use just means the body corporate has just given an owner the right to use the area – it has not transferred legal title to it to that owner.
Providers can not simply install equipment without first giving an access notice to the body corporate in the appropriate form. There are notice provisions under the Commonwealth legislation that must be followed. A body corporate then has a right to object and the Provider must then take reasonable steps to respond to the objection. The ultimate test is referral of the matter to the Telecommunications Industry Ombudsman. We have not had a single matter that has needed to go that far yet. They are all usually resolved through negotiation.
The key thing for bodies corporate is that its rights to object may be lost if it does not object within the required timeframe. Therefore it is important for anyone who receives an access notice to deal with it immediately. Delay can arise at times because of the confusion of Providers about who the owner of the land actually is. We have had the odd resident manager on site accept a notice without understanding what it is. Sometimes the body corporate letterbox may also remain unchecked for a period.
If a body corporate is served with a notice it needs to consider whether it is going to object. If it is it needs to issue an objection notice within the statutory timeframe. This may well need to be by vote outside committee, as the timing for objection notices is relatively short. Parallel with that objection it should consider what it wants to do with respect to the request for the installation.
The installation of any equipment needs to be treated like a lease of common property (which is the form it will usually take). This means that the commercial terms of that arrangement need to be negotiated. Some of the bigger ticket items with one of these styles of lease include:-
- A description of the area to be leased and what can be installed there;
- The rent to be paid and the mechanisms for the review of that;
- Whether any part of the area can be sublet or the lease can be assigned to other Providers;
- The rights to access to the area – if the area is on the roof access has to be via the building itself, so there may need to be some access mechanism for a secure building;
- The make good provisions on expiry or termination of the lease;
- Insurance and / or indemnities for any risk;
- Payment of an upfront ‘access fee’ or similar as compensation for any disruption caused to the body corporate; and
- Payment of the body corporate’s legal and administrative fees by the Provider.
In Queensland the creation of a legal right with respect to the use common property like this is almost certainly a restricted issue, meaning it is not within the lawful ability of the committee to grant.
Approval of the lease needs to go to owners in general meeting. The tenure of the proposed lease is a critical component which dictates the level of consent required. A lease for more than 10 years under the Accommodation Module or 3 years under the Standard Module means a resolution without dissent must be obtained. If the term is under those thresholds then the consent needs to be provided by special resolution. Of course, the costs of the meeting should be borne by the Provider too.
Don’t get railroaded. If you do receive a notice take positive, and immediate, action in response to it. In relative terms, it is rare for a body corporate to be able to earn anything other than interest income, and rent from an area that is not otherwise used is a sure fire way to reduce levies.
We have negotiated quite a few of these with various Providers. Let us know if you need help.