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F.A.Q. • Transactional

By November 28, 2018 No Comments

F.A.Q. • Transactional

The following content addresses some basic questions and situations wireless landlords and perspective wireless landlords will have.

Have you been approached to LEASE YOUR LAND OR BUILDING for a wireless cell site?

Now what?

Have you been approached by a wireless firm (usually through a 3rd party intermediary) to lease a portion of your property for use as a cell site? Congratulations!

Do you speak ‘radio frequency technobabble’? Wireless companies are banking on the fact that you don’t.

Technobabble allows the wireless companies representatives tell you, the potential landlord, that certain terms in their standard agreement are ‘required for RF engineering reasons and can’t be changed because of federal regulations.’ Generally, there are very few real lease terms that fall into this category, but it’s unlikely you’ll know which terms they are.

We can help take the babble out of the techno, and help put you on an equal footing and help negotiate a reasonable deal.

Jonathan Kramer, Telecom Law Firm’s principal attorney, has over 30 years of wireless engineering experience. Holder of the highest-grade FCC commercial and amateur radio licenses, Jonathan has also been licensed as a telecommunications contractor in California for over 20 years. He’s member of the State Bar of California and the United States District Court (C.D. CA), as well as the Federal Communications Bar Association and the International Municipal Lawyers Association.

Jonathan and the staff use our firm’s technical expertise to negotiate wireless leases that reject the babble in favor of meaningful and understandable terms.

Some examples of recent successes we have achieved for our cell tower clients:

  • Increased the total lease payments for a client by nearly $60,000 by changing just one key term
  • Blocked a hidden land-grab in an innocuous request by a wireless tower company that would have deprived our client of the full use of portions of his land beyond the cell site leasehold
  • Produced a 6-figure increase in value for the cell lease after and cell company withheld rent
  • Generated a 4-figure per month increase in revenues for a client without increasing the leasehold area of the existing cell site
  • Assisted a land management firm to maximize future revenue potential for one of their clients selling a wireless lease to a third party

Are you a Wireless Site Landlord who may be BEING UNDERPAID on your existing Cell Tower Lease?

Don't leave money on the table.

In our experience, the number one reason wireless site landlords are being underpaid is because their wireless tenant has occupied more space than is allotted to them in the lease.

How much more space? We see overages from as small as 4% over-occupancy to as large as 70% over-occupancy.

How could this happen, you ask?  Sometimes a wireless carrier will simply decide that it must have more space for an extra cabinet or two so it constructs the addition without notifying the landlord.  Sometimes it’s a misunderstanding or misreading of the plans. Sometimes it’s a contractor mistake during the site installation. Sometimes it’s because the tenant, without telling you, moved the actual location of the site or reoriented the site (both of which really ARE an over-occupancy in most cases).

If the landlord is not attentive, the overage may go unnoticed.   Sometimes the landlord isn’t sure, or it seems like a small overage, so it goes uncontested.

That’s a potentially Really Big Mistake that only benefits your wireless tenant, and why would you want to do that?

Let’s look at some numbers, and you’ll see why you MUST keep an eye on your wireless tenant’s occupancy of your land.

To start, here are some basic facts in two different situations, based on matters we’ve recently handled for wireless landlord clients (the facts have been altered slightly to protect the identity of our clients):

_
Rent per Month per Lease:
over-occupancy/Underpayment:
Years of over-occupancy:
Years remaining on Lease:
Recovered Underpayment:
Recovered Back Interest:
Additional Back Payment:

Added Value for
Remaining Lease Term:
Value Recovered for the Landlord:

Case 1:
$915
4%
9
21
$3,900
$1,800
$2,500

_
$12,800
$21,000

Case 2:
$800
23%
14
11
$34,100
$25,000
_

_
$24,000
$83,100

Obviously we’re not talking about small numbers, here. As is always the case in legal engagements, and most of the time in life, every matter is factually unique. Accordingly, prior results do not guarantee a similar outcome in your matter. The examples above, however, should give you a basic idea of why you, as a wireless site landlord, should check the occupancy, and not leave money on the table when dealing with occupancy overages. We know where to look for money on the table, and how to negotiate the fair recovery.

So what’s your first step as a Wireless Site Landlord to see whether you’re on the short end of the occupancy deal?

Actually, there are three steps.

First, pull out your wireless lease, including all of the exhibits. You’ll need the entire lease to review after you’ve completed the third step. Step two is grab (to go to your local hardware store and buy) a 100′ fiberglass measuring tape. Step 3 is to go out and measure the outside edges of your wireless tenant’s cell site. For ground-mounted facilities, this will usually be the outside of the fence or wall. While you’re at it, take lots of high resolution photos of the site from at least all sides. This will be very helpful later if you find an over-occupancy and decide to you wan to pick up the money laying on the table. (It gets trickier to properly measure the boundaries of a rooftop site…call us toll free on 855-CELL SITE and we’ll give you some helpful pointers specific for your site. No charge. By the way, still take the photos before you call…we’ll want to look at them to give you the pointers.)

Finally, with the lease data and the actual measurements, you can figure out whether your wireless tenant is over occupying the leasehold, and if so by how much. If you find that an over-occupancy exists, it’s time to pick up the phone can call your local attorney if your attorney is specifically knowledgeable about cell site leases and occupancy.

If you’d like to call us and discuss your findings and your lease terms, we’d be pleased to talk with you.

PS: What about the case where the tenant has UNDER-occupied the lease space? Most of the time it’s not an issue for the landlord. If you find this to be the case, or if the tenant wants a rent reduction or refund because they are not occupying as much space as they agreed to in the lease, give us a call. We’re pretty sure you’ll like our usual answer to this rare situation. (855) CELL-SITE.

Are you a Wireless Site Landlord who just received a notice that your SITE BEING TAKEN OVER BY A NEW TENANT?

Be VERY careful about what you as asked to sign.

Over the course of the life of your cell tower lease, your tenant is very likely to approach you asking for things.

Somethings they’ll ask for permission to modify the existing site.

Sometime they’ll ask you to allow them to renew and extend their lease years before the lease is up.

Sometime they’ll ‘ask’ that you cut their rent…or else.

Our attorneys have seen virtually all there is to see in the way of tenant requests.

In our experience, many requests are reasonable (and some may even require the landlord’s approval under the terms of the lease). In that case, we’ll explain the true scope the request and recommend the landlord seriously consider approving the requested action…perhaps coupled with a request or two by the landlord to ‘true-up’ the lease and fix earlier problem language.

Sometimes, however, a seemingly innocent request by your tenant can open a Pandora’s Box of new problems that will last for decades, and cost the landlord tens- or hundreds of thousands of dollars in lost revenue. You’d be surprised how often this is the case.

It’s not unusual for a wireless tenant to hire third parties to contact the landlord to use high-pressure tactics to try and coerce the landlord into making concessions that are simply not necessary, and usually only in the best interests of the tenant. These third parties will demand you cut the rent…offer a rent vacation…change material terms in the lease, or else.

Or else what?

The usual ‘or else’ is that absent consent by the landlord, the tenant may trigger an early termination of the lease. Most of this time, this is simply a hollow threat made by a firm who has a financial stake in parting you from your best interests, all to benefit your tenant.

Even if you don’t know which requests are reasonable, and which aren’t, we can help guide you along a proper course, usually saving you substantial money in the process.
Have a question about a request? Give us a call and take advantage of our policy of giving a free initial consultation to potential new clients.

Are you a Wireless Site Landlord considering SELLING YOUR EXISTING CELL LEASE?

There are ways to increase the value of the sale.

Are you thinking about selling your cell site tower lease? Lots of site landlords do.

Have you been approached by someone offering to take control of of buy out your wireless lease? Probability, it was one of these firms:

  • AP Wireless
  • Communications Capital Group
  • Landmark Dividend
  • Lease Advisors
  • TriStar Investors
  • Wireless Capital Partners
  • Unison

Of course there are other firms out there in this market segment, but the list above represents the industry’s leaders in our perspective.

Here are the most common lease buyout questions we get and answer for our clients:

  1. Why should I sell my wireless lease?
  2. When should I avoid selling my wireless lease?
  3. How much can you expect to make from the sale?
  4. What about the sales fees and legal fees?
  5. What about rent-sharing in the future after I sell the lease?
  6. How about the impact of a sale on my income tax?
  7. What’s the best way to sell my lease?
  8. How can I maximize the value of the sale of my lease?
  9. Don’t all of those firms offer the same basic terms and conditions?
  10. What if I have more than one cell tower lease on my property?
  11. What are the ‘gotchas’ I need to avoid?

If you are considering selling your wireless lease, or you just have questions, give us a call and take advantage of our free initial consultation offer.

Have you received a letter from your Wireless Tenant with a DEMAND TO CUT THE RENT on your existing cell site lease?

Fight off these baseless demands.

Are you a private or government wireless site landlord who has been approached by your wireless tenant, or a firm representing your tenant, demanding you cut the rent and/or significantly change the terms of your wireless lease?

This often-odious practice is called “Lease Optimization.” Not surprisingly, usually the only truly valuable optimization is for your wireless tenant.

The usual threat is that if you don’t give the concessions demanded, your wireless tenant may invoke a clause in the lease to walk away, perhaps in 30 days or less. The implication is that you’ll lose out on all of your future site income if you don’t give in now.

The larger wireless firms often use use third-party companies to do their lease optimization bidding. Two of the major players performing rent optimization on behalf of wireless firms are are Black Dot Wireless, Md7 and the Lyle Company, but there are others out there as well.

If you’re contacted, it’s quite possible that they’ll tell you something like this: Your wireless tenant has ‘many other sites in the area,’ or because of ‘economic conditions’ or because of ‘changes in the wireless industry’ so they no longer have a pressing need for the site they lease from you, but (and here’s the kicker) if you agree to cut the rent usually give other concessions, the tenant select a different site to close down instead of your site. Gosh, it’s your lucky day!

Sometimes in trade, the wireless tenant through the lease optimizer will offer a ‘rent guarantee period.’ During the guarantee period, the carrier will agree–essentially–not to walk away from the lease or try to reduce the payments again for a period time, commonly for a period 10 years. At the same time, you’ll usually be asked to give up other valuable rights, such as the right to sell your lease to whomever you want. You might be required to give a first-right-of-refusal on the sale of your property (which can reduce the marketability of your property…just ask us how).

This is a particularly good time to go out and take some measurements of your tenant’s cell site. If it is over-occupying your property this would be a particularly good time to know this as a fact, and to act on it. If your site is being over-occupied by your wireless tenant, you’ll want to be very, very careful about agreeing to a rent cut, and especially a rent cut based on an inaccurate occupancy. Click “Are You Being Underpaid?” (link/scroll back/open to previous section) for more information about over-occupancy and underpayment.

We have grateful private and government clients who have faced this vexing dilemma, and we’ve helped them survive this type of frontal assault on the value of their existing lease. We know how to determine if the story being told is true–and usually this is not the case–or if it’s just a ploy to squeeze the landlord using techniques that may well be legally improper.

We’re ready to help you, the wireless site landlord, fight off these often-baseless demands.

If you get a call from your wireless tenant, or their representative, let us help you, as we’ve helped many other cell sit landlords. For a free initial 30-minute consultation with one of our wireless lease attorneys, please call us toll-free on (855) Cell-Site or send us a message by clicking here.

Have you received or are expecting a TERMINATION NOTICE from your existing Wireless Tenant?

What NOT to do is as important as WHAT to do.

Some wireless carriers shuttering a number of their existing wireless site leases. If you’ve received a notice of lease termination, it means that the tenant had decided that your site is no longer necessary in light of some change in ownership or technology.

Lease terminations translate to the loss of anticipated and substantial lease income for years or decades. For savvy landlords, site lease terminations can contain nuggets of significant value that your terminating tenant will not want you to know about, or take advantage of.

Adding insult to injury, some carriers employ third-party vendors to call and ‘convince’ landlords why, on the way out, they should execute a novel “Lease Termination Agreement and General Release” document. This document can cost you many thousands of dollars (or more) if you don’t understand all of its legally-dense burden-shifting terms.

A wireless site tenant, when terminating a lease, wants to save lots of money by not removing most of the equipment, wiring, conduits, cables, and the other things it installs. Removal of these items is typically required by most wireless leases, as is returning the leasehold to the landlord in the same basic condition that existing just prior to the lease. Some tenants now want to abandon their nearly-valueless equipment in place and transfer title of the abandoned equipment to the site landlord with no warranties whatsoever. With the abandonment go all of the legal liabilities, as well, which may include liabilities imposed by the local governments on your departing wireless tenant, but are then transferred by this agreement to the landlord.

‘Just sign right here on the dotted line and you get to take on all of your departing tenant’s discarded stuff and legal risks, and you save them a boat-load of money, too!‘ is just one way to think about this type of proposed deal.

Even worse, sometimes the third party contacting you on behalf of the departing tenant will suggest in writing that they can likely find a replacement wireless tenant quickly because these decommissioned sites will be “plug and play” solutions for other carriers…IF…you give up a 25% commission for the life of the revenue stream the vendor can negotiate. We’ve never seen a decommissioned site that’s really “plug and play” especially since the the valuable radio equipment is removed before abandonment of the junk cables, antennas, etc.

What to do: If you are a wireless landlord and you’ve received a notice of termination, go back and pull out your lease documents, including amendments.

Look at the termination terms and restoration terms, then give us a call for a free no-obligation initial 30-minute consultation. Our toll free telephone number is (855) CELL-SITE.

Have you just RECEIVED A LEGAL LETTER from your existing cell site tenant or its legal representative?

It could be nothing; it could be a real issue. We can tell you the right answer.

It’s a great day.

You’ve just returned from a trip to the bank. You just deposited your monthly cell site lease payment and you’re feeling mighty happy about that check. You decide it’s such a nice day that you’ll stop on the way back to enjoy a cone of ice cream. Ah, two scoops of creamy decadent French Vanilla in a traditional sugar cone. The sprinkles on top are just the way you like them.

It is delicious!

Having finished your treat, you drive off and reach your driveway.

You get out of the car and walk to your door. Just as you start to push open the door you hear your Letter Carrier call out your name. You turn and wave, returning her greeting. She says she needs your signature for a delivery. You smile at her. You say, “Sure.”

You watch while she fishes through her letter bag. After a moment she pulls out a while envelope and looks up at you. As she extends her arm, you spy what she’s holding to be about the size of a Number 10 business envelope. You see a green bar across across the top that says, “CERTIFIED MAIL.” Your heart flutters. Then you see the return address starting with, “Law Offices of…” Your heart skips a full beat.

The Letter Carrier turns over the letter and hand you a pen, pointing to the receipt you are to sign. You dutifully sign the receipt, and she removes it from the back of the envelope. Finally she hands you the letter. You stare down at it. She gives you the rest of your mail and says goodbye. You manage to mumble your thanks as she retreats from your doorway.

Clutching the Certified Letter and the rest of the day’s mail, you go inside.

Rather than ripping open the envelope, you find a letter opener and carefully slice open the top. Ever-so-gently you pry apart the front panel from the back allowing you to peek inside. The letter is folded over on itself. No text is visible.

Resigned, you remove the neatly-folded letter, unfold it, and start to read:

Cell Site Lease Landlord:

This law firm represents your cell site lease tenant in the matter discussed below. Your immediate attention to this matter is required…

You read, then re-read the letter and as your heart sinks to somewhere near your ankles.
Not understanding why you got this letter, or how to respond, you put the letter aside.

Later, you pick up the letter again and realize that you need to talk with a competent lawyer who knows about the wireless industry, what the letter says, and what it means. . .

Over the course of a 20 or 30 year cell tower lease, it’s likely that you receive an ominous-looking certified letter or two from your tenant’s law firm, or even your wireless tenant. Most of the time, there is some issue that requires that you be formally notified of something that is happening, or something that has happened, in connection with the cell site lease. We frequently deal with these matters on behalf of our clients and explain what’s going on and how to deal with it from a legal and business perspective.

If you have received a legal letter from your wireless tenant’s law firm or directly form the tenant, let us explain what’s going on. Initial consultations free and without obligation. For a free no-obligation initial 30-minute consultation, give us a call on our toll free telephone number: (855) Cell-Site. A thirty-minute call might save you 30 nights of nightmares, all for nothing.