Tuesday, July 17, 2012

Don’t Be Fooled By E-911 Language

The major U.S. wireless carriers are fast at work installing their 4G LTE upgrades and modernizing their networks to improve the speed and capacity. This is a massive project requiring carriers to touch all or most of their cell sites. Across the country, consultants hired by the carriers are contacting cell site landlords with Letters of Authorization, Letters of Consent or proposed amendments. Landlords should be sure to check their leases before signing any documents received from the carrier consultants. Often these documents are presented as “standard” and no reference to the specific types of modifications or their impact on the subject property are explained. Depending on your lease terms, some of the terms may be negotiable and/or an amendment may be required.

Recently, our clients have requested that we review many such amendments. What we are finding is that the carrier amendments many times include terms that are not tied directly to the modification, but go further to modify the lease terms more favorably for the carrier. For example, AT&T amendments we have seen include a provision entitled, “Emergency 911 Service”. At first glance, it seems neighborly to allow AT&T to make emergency 911 modifications to its cell site that are mandated by the government. However, a more careful reading reveals that the language proposed by AT&T is much more broad than strictly emergency services. AT&T’s language provides in part that, for no additional rent, the Landlord agrees that AT&T “may add, modify and/or replace equipment in order to be in compliance with any current or future federal, state or local mandated application, including but not limited to emergency 911 communication services”. Note some of the key words, “including but not limited to.” This language is not precise and is therefore open to interpretation. One could interpret AT&T’s language such that AT&T’s addition of a generator to the subject cell site is permitted, especially if it is part of an E-911 mandate. However, bringing a generator to a property can have substantial implications, including added land owner liability. What if there is a gas or diesel spill? Will the generator make noise? What if the generator emits strong odors? Where will the generator be placed? Will additional space be required beyond the lease area? Will the Landlord be obligated to yield such space without additional rent?

Another term Landlords may want to consider when reviewing AT&T amendments is whether the Landlord wants to require AT&T to remove the Memorandum of Lease from the title record of the subject property upon expiration or earlier termination of the AT&T lease. AT&T’s amendments often seek to permit “either party” the right to record a new Memorandum of Lease. While some property owners refuse to let such Memorandums be recorded on their property, another solution is to require carriers, such as AT&T, to cause the Memorandum of Lease to be released from the property via a quit claim instrument or as otherwise may be requested by the local recorder’s office. Such release should occur within a set time period after the expiration or termination of the lease. If the carrier does not remove the Memorandum during such time period, the Landlord should include the right to act as a power of attorney on behalf of the carrier, at carrier’s sole expense, to cause the Memorandum to be released from title.

Finally, pay close attention to when the increased monthly rent commences. In recent AT&T amendments, we have seen that rent commences when AT&T commences installation of its equipment, however, if AT&T is leasing additional space, then rent should commence when the amendment is effective (typically full execution). If you, as the landlord, are keeping space for AT&T’s use, but AT&T does not install its equipment for more than a year, you have kept the space for AT&T’s use without compensation for that year. Essentially, such language serves as a free option for AT&T to preserve space for its future modifications.

 All of the carriers have their own template amendments so be sure to read through the “standard” templates carefully. Remember, the carriers have their own attorneys looking out for their interests so you must be mindful to watch out for your own interests. If you would like us to review your lease to see if an amendment is required for the carrier’s proposed modification or review an amendment on your behalf and ensure you are adequately protected, please do not hesitate to contact us for more information.

Please note that “AT&T” is a registered trademark owned by AT&T Intellectual Property and/or AT&T affiliated companies. Cell Tower Attorney is not affiliated with AT&T in any way and the blog post above is offered strictly as an opinion. If you wish to learn more about AT&T, please go to www.att.com.