May 21st, 2009
The Master of the High Court Edmond Holohan commented on the validity of ‘upward-only’ rent reviews in the present economic climate: “Fair rents have been a public policy objective since the days of the Land League. While the current Irish recession is not in the same league as the Great Depression, the public policy to secure early recovery is surely identical. The losses and burdens must be shared fairly.” Where he said that a legal decision on the actual case is a matter for the courts he argued that the economic downturn should be taken into consideration when ‘upward-only’ clauses governing commercial buildings are considered. The interpretation of rent agreements by the courts in the context of the recession will be ‘informed by public policy’.
Mr Holohan noted that there tend to be two types of upward only review clauses. Threshold clauses state the rent may fluctuate according to changes in market value, but never fall below the rent agreed at the outset. Ratchet clauses state the rent must never fall below the rent that applies at the time of the review. The case that prompted the comments, involving the Apollo Galery at 51 Dawson St, Dublin, contains a clause referring the “rent previously payable” as the base line, but this may not refer only to the rent payable immediately prior to review, Mr Holohan said.
He said that as a general principle, the bargain between lessor and lessee is one of long-term mutuality, and rent review clauses must be viewed in that light. There is no presumption in favour of constructing a clause so as to make it upwards only. A court will not be easily persuaded to accept an interpretation which will give the lessor a windfall in a time of recession. And the courts will surely never rubber-stamp any interpretation which clearly has the effect of unjustly enriching either party.
May 20th, 2009
Two of the world’s largest telecommunications operators have come together to sign an agreement which will see both operators sharing network infrastructure to deliver cost efficiencies of hundreds of millions of Euros for each company over the coming 10 years.
Under this agreement Vodafone and Telefonica propose to share network infrastructure in Germany, Spain, Ireland and the UK through the alignment of planned roll out and the consolidation of existing network infrastructure.
Specifically, in Ireland both companies are to open all network sites for sharing by the other party and new build will also be conducted jointly where roll-out plans are aligned.
The Irish subsidiaries of Vodafone and Telefonica are already stipulated to share the sites of their network infrastructure by way of their licences, this will mean that both companies will have to be ‘more pro-active’ about sharing in Ireland.
It is anticipated that the agreement will offer enhanced quality of service within the network to benefit the consumers experience and to increase mobile broadband coverage, it will reduce the environmental impact by reducing the number of sites and reduce network operating costs as well as jointly building sites where opportunities exist.
February 6th, 2009
Charterhouse has developed a profile of Development Contribution Schemes currently operating in the Republic of Ireland. The findings are alarming. Several local authorities are levying hard hitting contribution fees on new mast infrastructure and existing mast infrastructure where planning permission has to be regularly renewed. At the time of writing, Monaghan Town Council sets the highest rate at €51,480 per mast, irrespective of whether the mast is new or existing. Additionally, it levies a €20,590 change for each antenna installed on existing masts. We estimate that operators are paying approximately €1 million in development contributions annually. Now this surely is unsustainable. Operators can expect no relief from local authorities who desperately need the funding and have targeted ICT operators for soft money. Charterhouse has a strategy for tackling this issue. Contact us for more details.
January 29th, 2009
Section 47 of the Civil Law (Miscellaneous Provisions) Act 2008 extends the opt out (or contracting out) provisions to all tenants of business premises provided the tenant has obtained independent legal advice and signed a deed of renunciation. These changes came into force at midnight on 20th July 2008
The Civil Law (Miscellaneous Provisions) Act 2008 provides that any tenant (regardless of user) can contract out of its renewal rights under the Landlord and Tenant Acts. This option, which under the 1994 Act, was only available to office tenants, will now be available to all tenants. In effect this will mean that the standard four year nine month tenancies will cease to be used and parties will enter into longer term leases. To facilitate a valid contracting out of the Act, the tenant must receive independent legal advice regarding that specific matter and he must execute a formal renunciation.
It is acknowledged that in Ireland, unlike the UK, there is no reported incident of ICT operators enforcing rights to claim a new tenancy at the end of an old tenancy. Nevertheless, in the future no one can predict whether ICT tenants choose to avail of the tenancy rights granted to them under landlord and tenant legislation.
January 22nd, 2009
MBNL is a joint venture management company set up by T-Mobile and 3UK responsible for establishing and monitoring the new consolidated network between the two companies. MBNL will manage and operate all RAN infrastructure supporting T-Mobile’s 2G network and the combined 3G network.
The development is revolutionary and involves two mobile competitors making a strategic decision to utilise a single network for both companies. The merging of both networks will result in the decommissioning of 5,500 sites in the UK, a reduction from 18500 sites to 13000.
The merging of networks into a single vibrant infrastructure involves utilising a single set of equipment on the cell sites and splits the traffic in the RN controller at the switch site. This is not sharing of site infrastructure and so is referred to as network level consolidation. Sharing is more accurately described where the same tower or land is used to support multiple operators’ equipment.
The utilisation of a single RAN will lead to a reduction in operational costs, a reduction in capital expenditure, economies of scale from jointly managing and maintaining the consolidated network.
The first site was decommissioned in August 2008, a large volume of other sites are currently for sale. An average of 800 sites is being consolidated each month and it is anticipated that 78% of the network was consolidated by December 2008.
There will be some clear winners and losers in this deal, the operators and landlords fortunate enough to have their sites retained will be the winners, the clear losers are those 5,500 landowners with income lost. Did they ever think the termination clause would be invoked? Could the same happen here well with downward ARPU’s and hard hitting cost saving plans introduced by the major telecommunications operators it certainly is a matter to keep a close eye on.
