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Beware of multiplying mobile equipment

September 21, 2021
Author: JD Stride

Sometimes letting mobile carriers come and go as they please might seem like the stress-free way to manage your property, but that approach could be costing you hundreds of thousands of dollars in lost rent. 

Mobile carriers have contractual rights and statutory powers to install their equipment. However, if you’re a landowner or property manager, you’ll know that keeping a record of carrier contractors’ comings and goings can be a major headache.

Background 

Our client, a Real Estate Investment Trust (REIT), had lost track of the multiple carrier requests and proposals impacting their properties. 

The REIT wasn’t sure if it was missing out on back rent and approached siteXcell to re-establish a clear understanding of the telecommunications equipment currently occupying its assets.

This type of situation is not uncommon. For organisations with large portfolios of prime assets, the comings and goings of carrier contractors is an almost daily occurrence.  Prime assets often have multiple data carriers present and a full suite of mobile carriers operating in-building coverage systems (IBCs) and macro sites on the rooftops or poles.  Understandably, busy managers often don’t have time to scrutinise every line of multiple proposed work plans.  

In addition, carriers present property managers with multiple Land Access & Activity Notices (LAANs); notifications of proposed upgrades and installations are frequently misplaced; and it’s not uncommon for lease agreements in hold-over to disappear from internal management systems.

Making matters even more complicated, carriers, either deliberately or by default, love to provide ‘For Construction’ drawings in the form of previous ‘As-Builts’. These documents contain all manner of red mark-ups and strikeouts, ensuring it is almost impossible for most people to understand the proposal.  Whether this is a carrier tactic or a cost-saving measure is for another time. However, because of this practice, landowners and managers often don’t know whether the proposed works should trigger an increase in rent or constitute an expansion of the lease area.

Our approach

To better understand the state of telecommunications equipment and the activity on our client’s assets, siteXcell conducted a whole of portfolio audit. 

This audit involved a four-step process designed to establish a baseline of equipment and whether any back-rent was owing. Specifically, our approach involved:

  1. Reviewing all current leases, licences and other agreements that had been entered into and historical tenancy payment registers
  2. Conducting physical audits across all the REIT’s assets to uncover and identify any carrier equipment installed without a formalised agreement or LAAN, or equipment installed in contravention of an existing tenure agreement
  3. Identifying any WHS issues caused by the carrier’s occupation of the asset
  4. Providing a comprehensive Site Audit Report for each asset, including the carrier tenants within them. 

This approach was critical because all carrier equipment should be documented either by a formalised tenure agreement or service of Land Access and Activity Notice (LAAN). Any unauthorised equipment on the client’s assets was simply undermining their commercial position, posed potential risks to daily operations, and was taking up valuable space and management time.

A successful outcome 

After cross-referencing the tenure agreements with our audit findings, we identified $1.2 million worth of outstanding rental claims.  With both the carrier agreements and audit findings in hand, we demonstrated the breaches to the carriers and collected the entire $1.2 million on behalf of our client. We were also able to put in place new tenure agreements at current market rates, which yielded another $300,000 in annual revenue across the portfolio.   

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