Protected Tenants and the Electric Communications Code
The Court of Appeal has handed down its judgment in CTIL v Ashloch Limited and AP Wireless II (UK) Limited  EWCA Civ 90. This article looks at the most important implications of the judgment for business tenants protected under the Landlord & Tenant Act 1954 (“the Act”).
Background: The Telecoms Code
Under Section 2 of the Electronic Communications Code (“the Code”), the Code applies to all written agreements in existence on 28 December 2017 (when the Code came into force). However, under Part 5 of the Code (which concerns the termination and modification of agreements), the Code shall not apply if the written agreement is a lease protected under Part II of the Act.
CTIL was the assignee of a former tenant that – at the time of the assignment – was “holding-over” under s24 of the Act. CTIL wanted to renew the lease with favourable terms that incorporated new rights under the Code (“code rights”). Aware that Part 5 of the Code did not apply to protected leases, CTIL served a “Paragraph 20” notice under Part 4 of the Code. The notice requested that the Tribunal impose a fresh agreement with code rights. The landlord, AP Wireless, argued that CTIL could only renew the lease through the Act – not the Code.
The Upper Tribunal (UT) found that CTIL, as an occupying “Operator”, could not rely on Part 4 of the Code to renew its protected lease.
CTIL appealed the UT’s decision to the Court of Appeal, arguing that (notwithstanding the fact that the Code’s transitional provisions prevent Part 5 from applying) Part 5 did not expressly prevent an occupying Operator from relying on Part 4 of the Code.
Court of Appeal
The Court of Appeal rejected CTIL’s argument. Referring to an earlier decision in CTIL v Compton Beauchamp Estates  EWCA Civ 1755, the Court held that Part 4 code rights can only be conferred by an occupier for the time being – an operator in situ is precluded from relying on Part 4 and must follow the renewal process under the Act. CTIL was precluded from renewing its lease under Part 4.
The major implications of the Court of Appeal’s judgment are that:
- An operator occupying premises under a protected lease that was granted prior to 28 December 2017 can only renew that lease in accordance with the renewal process under the Act.
- Only occupiers for the time being can confer code rights; Operators in situ, however, are precluded under Part 4 of the Code.
Contact our Real Estate Dispute Resolution team today
If you would like to discuss any issue relating to this blog, please do not hesitate to contact a member of the Real Estate Dispute Resolution Team on 01895 207835 or 01895 207295, or email us at firstname.lastname@example.org
How can we help?
To speak to one of our specialist legal teams, please click the button below.03456 381381
Make an enquiry