What is a wayleave agreement?

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Introduction

Wayleave agreements can be confusing for those who know they need it but aren’t sure where to start. As a result, many landlords have to research the topic well before they know what to do to move forward. In this article, we will be talking about wayleaves, giving all the information you need as a landlord.

This article will discuss what a wayleave agreement is, when you should need them and why it is necessary to consider any wayleave agreement in detail. So, read on carefully and make sure you follow each step carefully.

A power grid installed as part of a wayleave agreement

What is wayleave

Wayleave refers to the rights granted to another company unrelated to the owner of the land to enter and construct or build new infrastructure on the premises. Typically it help provide services to the property such as WiFi or telecommunication but it could also relate to the piping or plumbing nearby too.

This would give them permission to either enter the property or to cross land and work on parts of the property that they don’t lawfully own. Almost like a form of planning permission but on land that isn’t owned.

What is a wayleave agreement?

A wayleave agreement is something a landlord or land owner agrees on with a service provider. They will usually give land or premises access to the provider in order to conduct repairs or install new facilities.

This is typical in the broadband sector where telecommunications providers are tasked with installing new routers in homes quite frequently and these generally are required to have maintenance more frequently too. Installing new wires and making sure masts are transmitting the right signal.

There can be multiple parties involved in a wayleave agreement too. As well as the landlord and the provider. There can also be wayleave officers,  planning consultants, land agents, landowners who are adjoining the property and solicitors.

The most complicated of wayleave agreements can take up to four months to process so good planning is necessary if you know what needs work in a property. 

How much is a wayleave fee?

Wayleave fees are usually charged on the basis that the landlord will be inconvenienced. The landlord’s use for the property and also the property value may be taken into consideration. For example, it may be the case that a provider is charged 2% of the value of a property for example in order to gain access. 

This charge should compensate the landowner for any inconvenience that doesn’t fit in with the planning of the property.

It is common for a landlord to hire a wayleave agreement surveyor who is better equipped at pricing these fees and knowing what kind of intrusion will happen at the property as well as what this will mean for the long term.

Wayleave fees are therefore a kind of compensation for the disruption caused by a provider as they get into a property and make changes. If the property is a commercial property for example and it results in them having to shut down the business for a day or so then this would be a good reason for a landlord to charge a higher fee.

What’s the difference between an easement and a wayleave?

An easement which can also sometimes be called a Deed of Grant is a document that gives providers access to a plot of land. However, it is different to a wayleave agreement because this is usually a one-off payment so the provider has permanent access to the land and a wayleave is always temporary, usually for a maximum of three months.

A landlord and provider deciding on a wayleave agreement

Sometimes, it is possible for a landlord to ask for a wayleave to be turned into an easement because this is easier for the landlord. They won’t have to keep resigning wayleave agreements as a result and once they trust the provider is competent they will be able to allow them to come in and out of the owned land when they want.

Why is a wayleave required?

Wayleaves are required because the introduction of new infrastructure can be extremely invasive and take a long time. As a result, a landlord needs to know what they’re getting themself into before they allow a telecommunications provider access to their site.

For example, imagine you owned a football field and a broadband provider like BT had to install a new telecommunications line nearby, they would need access to your land in order to do so. The construction of this new line may take weeks and during this time the owner of the football field will not be able to host matches or invite guests onto their property safely.

Therefore, it is the provider’s job to pay the landlord to conduct the works and sign a wayleave agreement detailing how long the works are likely to take and how much they are willing to pay in compensation for the inconvenience. Often, a wayleave actually benefits the landlord in the long term by providing better broadband or communication. 

However, it is still important to still have an agreement in case there are issues with the new construction or they have to revisit the land in the future.

Can you refuse to sign a wayleave agreement

As a landowner, it is completely within your rights to refuse to sign a wayleave agreement. Having said this, it is vital a landowner considers the consequences before doing so. This is because if they do not allow providers to work on their land, it could reduce the income of the land over time anyway and perhaps decrease the land’s value too.

The value of land decreasing is something that has the possibility of happening because the addition of infrastructure from a provider may serve as additional income in the future from future wayleave agreements. This means the next company or landlord that the current land owner wants to sell the land to may see the land as less valuable as they don’t have the option to charge providers wayleave fees for conducting works.

Either way, going over the legal details with a qualified professional such as a wayleave solicitor is crucial to make sure you make the most optimal decision as a landowner. The decision to sign a wayleave or not can have financial consequences well into seven figures for the most complicated of wayleave agreements.

Power lines installed as part of a wayleave agreement

How to obtain a wayleave

A broadband provider or telecommunications company will usually reach out to the landowner. In order to obtain a wayleave agreement from them, take your time and hire the right professionals to guide you through the process as it is a big decision and the agreement can cost a landowner lots of money and perhaps reduce the value of their land over time.

If you’re not sure if the land you have recently bought or the land you are interested in buying has a wayleave attached to it, you can look this up by going to the government website and searching the land registry here.

In addition, it is possible for someone to go to the OFCOM website and fill out a form here if they want to talk to Openreach in particular about the status of any wayleave on a plot of land.

When is it not necessary to have a wayleave

Sometimes, if a landlord is asking for the service from the provider and it is not the telecommunications engineer reaching out to the landlord, there is no need for a wayleave agreement.

Other times, there are only minor works that are needed on the land and there is no permanent change to the land either. As a result, the landowner may just grant access to the telecommunications company. However, it is always within the rights of the landowner to refuse permission if they want to.

How does wayleave work?

So if a wayleave is an agreement between a landowner and a provider, how would this actually work? In addition, what are the details you have to know about them in terms of equipment and the compensation available to landowners?

What kind of equipment is used by network operators?

The reason why wayleave agreements have to be signed in detail is that the equipment that network operators have to install on private land is often very intrusive and there is a range of types of equipment a provider may want to install.

First of all, there is the need for new cables, poles and power lines that may have to be installed in networks already set up to stabilise the wires or potentially add additional wires to the grid already in place.

However, sometimes mini pillars or steel towers may also be installed because there needs to be a rerouting of electricity or broadband. This is the most common reason for a wayleave to be signed as the implementation of a new steel tower can cover a lot of lands.

If you are unsure about what these types of equipment will involve, then you can look at the energy network website here or also contact the wayleave officer at the electricity provider who is looking to build on your land as a landlord. It may be the case that the wayleave officer has to give you more information or you negotiate back and forth about the size of the equipment in question.

As well as this, don’t assume that you know what the type of equipment is by comparing it to equipment on other lands as equipment can vary in size depending on the county that the wayleave agreement is being signed in.

        Electricity being checked in a property as part of a wayleave agreement Electricity being checked in a property as part of a wayleave agreement

        How much compensation does a landowner get for a wayleave?

        It is common for a landlord to charge anywhere from 1% – 4% of the value of the land of the property. 

        What’s more, a network provider will often have to revisit a property so the amount a landlord can earn over decades is a lot. As a result, some landowners make so much from wayleave agreements and fees they have to include wayleave payments on their tax bills.

        Wayleave agreements, therefore, become an official piece of income and the landowner has to include this when they sign up for corporation tax in the tax year. 

        Who pays for a wayleave?

        Wayleave is paid for by network providers or telecommunications companies. They will pay this 1% – 4% value of the land to the landlord as a wayleave fee to give them permission to conduct the necessary works on a plot of land.

        Sometimes, these companies have government funding in order to spread out the national grid as far as it can go as well as provide broadband for much of the UK. As a result, it is often easy for landowners to negotiate a good price for wayleave fees whenever there is a wayleave in negotiation.

        What is a necessary and voluntary wayleave?

        For electricity and voluntary providers only,  there is something called a notice for a necessary wayleave in the Electricity Act of 1989. This is where a provider will apply to the Secretary of State which will grant a wayleave, usually for a period of 15 years but this could be more or less.

        Reasons for this could be to install new equipment or to cut down trees that are interfering with power lines around the grid.

        Primarily a provider will first apply for a voluntary wayleave but sometimes a landlord or landowner will refuse this from happening. A necessary wayleave grants legal action for the provider to enter the property no matter if a landlord doesn’t want to or not.

        In conclusion

        To conclude, wayleave agreements are vital contracts between landlords and network providers to ensure there are no regrets from either side in the future. A poor wayleave agreement could result in court action in the future or even potential bankruptcy of the owner of the land.

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        andreas gerazis

        Andreas Gerazis

        Experienced landlord

        Andreas is a certified landlord with extensive knowledge about the UK property market as he has been actively investing for half a decade. Founder of the first three-in-one property management software, Lofti Proptech, Andreas has a brilliant understanding of the details surrounding what it takes to grow and run a thriving property portfolio.