Four Practical Tips for Drafting Telecom Easements

Wireless services are a vital part of modern life. Without cell phone tower easements, most networks could not exist.

Telecommunications towers provide the structural backbone of wireless services. The antennas and transmitters installed on these structures allow for interpersonal, business, and emergency communications around the globe, including text messaging and mobile phone calls, as well as broadcasting, streaming services, and high-volume data transmission. The limited transmission power of mobile phone requires towers to be closely spaced to maintain reliable signal strength. The underlying legal framework for placing telecommunications tower sites can vary, from a ground lease with a landowner, to a direct purchase of the land by a provider or tower company, or a permanent easement from the landowner. We review some key terms and provisions to consider when drafting the grant of a permanent easement from a landowner to a telecommunications service provide or tower company.

Exclusive Use Easement

The permitting and hard construction costs for a telecommunications facility are substantial. The antenna equipment is expensive. Working on towers is dangerous. For these reasons, the telecommunications easement areas that encompass the tower, equipment pads and shelters, and electrical connections are typically fenced off and treated as exclusive-use easement areas. Your telecom client is likely going to expect to keep these areas practically exclusive. The problem is that easements are nonpossessory estates in land and presumed to be nonexclusive. Therefore, it is essential to expressly provide for exclusivity in the easement instrument. Note, however, that exclusivity is not necessary for the right of way to access the telecom facility.

Easement in Gross; Assignability

Another trap for the unwary telecom easement drafter is the default rule prohibiting the assignment of easements in gross. Typically, a telecom company will not own a nearby property to act as the dominant estate for an appurtenant easement. Therefore, the parties will typically negotiate an in-gross or personal easement rather than an appurtenance to a dominant estate. At common law and by default, however, easements in gross are not assignable. And, even if the parties are negotiating an appurtenant easement, such use rights are only assignable in that they run with the title to the dominant estate. An appurtenant easement cannot be severed from the dominant estate and independently alienated unless specific provision is made for assignability. Therefore, you must affirmatively contract around the common-law default rules so your telecom client will not be stuck with an easement that it cannot sell or transfer to a subsidiary. It is, therefore, essential to include provision for the assignability of the telecom easement.

Scope of Use Rights; Draft Broadly

Telecom technology changes rapidly and constantly. The physical infrastructure for cellular service is constantly evolving. An easement, however, is a rigid, nonpossessory estate in land that allows the easement holder to make specific and limited uses of another person’s land. Thus, there is an inherent tension between the telecom easement as a legal form within which to operate a telecom facility, and the nature of the telecom marketplace and the technologies employed. Given this tension, it is imperative to draft the scope-of-use provision in the telecom easement broadly to grasp changes in technology to avoid technical overburdening or misuse of easement in the future.

Real Estate Taxes; Allocation; Fixtures

In general, the person who pays the real estate tax bill is the assessed owner. In contrast, an easement holder typically does not owe real estate taxes for the servient estate. Often, the improvement of the servient estate with a valuable cell tower increases the taxes on the servient estate. Therefore, you may think if you remain silent on this topic you will saddle the servient estate owner with the tax bill increase. Setting morality aside, however, this is the wrong approach for a few practical reasons. Therefore, it is generally a best practice to negotiate a reasonable allocation of the tax bill so that the telecom company pays for the increase in value of the servient estate attributable to the cell tower. First, the telecom company will want to receive all tax bills and notices so it can ensure that owner is paying all real estate taxes. In some jurisdictions, a real estate tax lien could be a “super lien” and wipe out the telecom easement. Second, a fair and reasonable allocation of the real estate tax bill, apart from being the “right” thing to do, will justify provisions in the telecom easement for treating the telecom facility as the telecom company’s personal property rather than a fixture. Finally, a provision allocating responsibility for real estate tax liability avoids a common source of disputes in the future.