News & Events

Responding to Cell Tower and Similar Lease Offers

by | Feb 25, 2017 | Industry News, Real Estate & Land Use, Wetzel, Jennifer Denchak

By: Jennifer Denchak Wetzel, Esquire

Responding to Cell Tower and Similar Lease Offers

Since agricultural land, almost by definition, is located in rural, sparsely-populated areas across the state, often in townships with loose, or even no, zoning requirements, many such landowners will be approached by a telecommunications company to lease a small portion of their land to construct a cellular tower and related equipment. Like the real estate market in general, location has a significant impact on the market rental price, with some geographic areas seeing significantly higher rental amounts. Having a proposed cellular lease negotiated and reviewed by an attorney who is familiar with these types of leases and aware of market values can be very important for ensuring fair terms and compensation for the landowner.

The standard lease presented to a landowner is written from the perspective of the cellular company tenant. It likely does not provide for the best rental payment and escalator, a signing bonus, payment of attorney fees for lease review and negotiation, and/or payment of a portion of the revenue received by the tower company for additional carriers that co-locate on the site. Further, if the property is enrolled in the Clean and Green program, the lease needs to contain language that requires the cellular company to cover any roll-back taxes attributable to the non-agricultural use of the property.

Agricultural landowners statewide have been, and continue to be, approached by telecommunications companies with leasing opportunities. In the counties bordering Philadelphia, telecommunications companies have entered into agreements with landowners to either lease space on an existing silo for placement of their antennae or to actually assist with the process and cost of constructing a silo for this purpose. In northern and central parts of the state, sites are often selected on the tops of wooded mountains. An optimal site in western Pennsylvania saw the use of a mobile temporary tower for immediate operation. No two telecommunications leases are exactly the same.

If a cellular company needs coverage in your geographic area, and if your site is preferable for any number of reasons, such as elevation, lack of other viable alternatives, preferable zoning requirements, etc., you will have a significant amount of bargaining power, and do not need to settle for the initial lease terms offered by the tower company. Since the duration of the standard cellular tower lease is approximately thirty (30) years, it is important to arrive at lease terms that will benefit the landowner into the future.

Aside from telecommunications leases, agricultural landowners are also often approached by companies to lease portions of their property for other purposes such as wind energy and solar energy. Most of the same concepts apply to the negotiation of the leases associated with these non-agricultural uses.

The attorneys at Mette, Evans and Woodside have experience representing landowners in the review and negotiation of lease agreements for all of the above-mentioned purposes, and are available to assist you in that regard.