The biggest disruption of the decade in the telecom industry is happening right now. Major mobile operators like T-Mobile, AT&T and Verizon are focused on rolling out 5G connectivity from coast to coast.
As the 5G rollout accelerates, there will be massive demand for more cell towers across all states. And unlike previous generations of cell towers, 5G towers will be needed around densely populated cities and towns.
As a landowner, you’ve got numerous opportunities to capitalize on this demand for 5G cell towers. However, there are several things you should know before you sign a cell tower lease. Industry insiders caution landowners to avoid signing a cell phone tower lease contract unless they clearly understand what they are signing.
Very often, too many landowners get the short end of the deal, and they realize only when it’s too late that they’ve entered a contract that isn’t going to work in their favor. You can avoid this by consulting trusted cell tower lease buyout companies when you need to negotiate an attractive contract.
Understanding the nuances of a cell tower lease contract ensures that you get the best terms and rates. Here are a few things that all landowners should know before signing cell tower lease contracts:
1. A Cell Tower Lease Is A Long-Term Contract That You Sign With A Mobile Operator
A lease is a legal contract between the lessor (the landowner) and the lessee (the mobile operator). As per this contract, the landowner permits the lessee to construct and operate a cell tower on their property in exchange for a lump sum or structured payment. Usually, cell tower leases last for several decades. Unlike a land sale, where your relationship with the buyer is over once you sell the land, a cell tower lease places you in a long-term relationship with the mobile operator. Therefore it’s critical that you understand the terms and conditions of the contract, and you should negotiate it properly so it favors you.
2. The Company’s Agent Does Not Consider Your Best Interests
Usually, cell tower operators hire land agents to negotiate leases on their behalf with individual landowners. Keep in mind that the land agent is not on your side. Since the mobile operator hires them, they work to finalize a lease that favors the operator. So don’t get swayed by the smooth-talking land agent. Make sure you do your due diligence and analyze the contract before signing it.
3. Know The Differences Between Guaranteed And Non-Guaranteed Money
Generally, cell tower leases consist of three phases:
- Testing period
- Initial term
- Renewal term
Before the cell tower operator commences operations on your site, they conduct site testing to ensure the site’s long-term viability. Before the operator proceeds with the testing, they pay a one-time lump sum—the guaranteed money. If the testing reveals that the site is viable, they proceed to build various facilities on the site and pay you monthly rental payments until the lease ends.
However, if the testing operations reveal that the site is unsuitable for their needs, they can terminate the lease and make no further payments. Under this scenario, only the initial guaranteed money is paid to the landowner. So it’s in your best interest to negotiate the contract and secure more guaranteed money.
Cell Tower Leases Are Complex There’s no denying that cell tower leases are complicated, and several factors can be detrimental to the landowner if the least is not reviewed properly. Therefore, it’s highly recommended that you hire a legal representative or a trusted cell phone tower lease consultant to handle the negotiations on your behalf and ensure that you sign a contract with favorable terms.