Cell Tower Lease

[Joey Hall]

I have acquired a piece of property that has an existing cell tower on it. The previous owner had already sold the lease about 10 years ago for a lump sum payment. I have requested a copy of the lease. From what I understand new carriers have been added to the tower since the lease was sold. I have been told by some people that the lease being signed over would only cover existing cell services at the time. Is this normal practice when selling a cell tower lease or was I misinformed?

Is there specific language I could look for in the lease agreement that would let me know if that is the case? Any help/guidance appreciated, I have never dealt with cell towers before.

Thanks,

[Ronald Rohde]

You have to read the lease. How many years are remaining? A copy should have been delivered at your closing.

[Joey Hall]

Thanks, I will locate the closing documents and review the lease. I did not expect to get anything from the tower as it was disclosed it was already sold so did not review that content closely. The original lease from the owner who owned it at the time it was installed had hand writing on it for payments that increased per 5 year term is what it looked like if I recall correctly. When the last owner sold the lease it looked to be a complete other document filled with 15-20 pages of information. I do not recall seeing the duration of the lease on any document. 

[Ronald Rohde]

Quote from @Joey Hall:

Thanks, I will locate the closing documents and review the lease. I did not expect to get anything from the tower as it was disclosed it was already sold so did not review that content closely. The original lease from the owner who owned it at the time it was installed had hand writing on it for payments that increased per 5 year term is what it looked like if I recall correctly. When the last owner sold the lease it looked to be a complete other document filled with 15-20 pages of information. I do not recall seeing the duration of the lease on any document. 

 Well, its likely in there somewhere. 5G is going up and adding equipment which warrants an increase in rent if the lease doesn't permit expansion.

[Brett Reall]

Joey, I just ran across this thread, were you able to get the answer for this cell tower lease?

[Jeffrey Abraham]

Common Practices in Selling Cell Tower Leases

1. Existing vs. Future Rights: It is common for leases to either:
   • Cover existing tenants and equipment: This means the lease covers only the equipment and tenants on the tower at the time of the sale.
   • Include provisions for future tenants: Some agreements might allow for new tenants and equipment to be added, potentially impacting the compensation.
2. Lump Sum Payments: When a lease is sold for a lump sum, it often includes a transfer of the right to collect future rents from existing tenants. However, future rights can vary.

Key Lease Terms to Review

To determine the specifics of your lease, look for the following clauses or terms in the lease agreement:

1. Assignment and Subletting:
   • Check if the lease allows for the assignment or subletting of the tower space to new carriers.
   • Look for language such as "the right to sublease or assign" or any restrictions on adding new tenants.
   • Scope of Lease:
     • Determine whether the lease explicitly states it covers only the equipment and tenants present at the time of the agreement.
     • Phrases like "existing tenants" or "as of the date of this agreement" can be indicators.