Telecoms agreements: clarity from Court of Appeal

A recent decision from The Court of Appeal provides welcome clarification on the distinction between leases and licences in the context of telecommunications site agreements.

The judgment in AP Wireless II (UK) Limited v On Tower (UK) Limited [2025] EWCA Civ 921  provides authoritative guidance on when a so‑called “minimum term” agreement fails to create a lease and instead takes effect only as a contractual licence, with consequences under both the Landlord and Tenant Act 1954 (“LTA 1954”) and the Electronic Communications Code (“ECC”).

For landowners, operators and advisers alike, the case is a reminder that careful drafting of term provisions remains critical, even decades after an agreement was completed.

The case: AP Wireless II (UK) Limited v On Tower (UK) Limited

The dispute concerned two telecommunications site agreements originally granted in the late 1990s. Each permitted the installation and operation of telecoms apparatus on land owned by AP Wireless’s predecessor in title. The relevant agreement dated 11 March 1997 provided for:

• A minimum term of 10 years; and
• A continuation thereafter until termination by either party on not less than 12 months’ written notice, expiring at any time after the minimum period.

After the expiry of the minimum term, On Tower (UK) Limited sought to argue that the agreements were licences, thereby falling within the regime of the Electronic Communications Code (ECC) and allowing an application for new Code rights. AP Wireless II (UK) Limited, by contrast, contended that the agreements were leases, bringing them within the more protective framework of the Landlord and Tenant Act 1954 (LTA 1954).

The First‑tier Tribunal and Upper Tribunal concluded the agreements did not create a valid lease. AP Wireless subsequently appealed to the Court of Appeal.

The issue before the Court

The central legal issue in this case asked whether an agreement which grants a right of occupation for a defined minimum term, followed by an open‑ended continuation terminable on notice, can satisfy the requirement of term certainty necessary for a lease.

This question re‑engaged long‑standing principles of English property law, particularly the rule that a lease must be granted for a term which is certain at its commencement.

The Court of Appeal’s decision: certainty of term in leases

The Court of Appeal dismissed the appeal and unanimously held that the agreements were void as leases for lack of certainty of term.

The Court reaffirmed that a valid lease must have a term which is either:

• fixed in duration, or
• periodic and capable of being identified with certainty at the outset.

An arrangement which continues indefinitely after a minimum period, terminable at any time on notice, fails this test. Despite the presence of a minimum term, the end date of the arrangement was not certain when the agreement took effect, rendering it incapable of creating a lease.

Why this judgment matters

The distinction between lease and licence is not merely technical, but also has significant commercial and procedural consequences, particularly in the telecoms sector.

Electronic Communications Code

Where an agreement is classified as a licence, it is capable of being treated as a subsisting agreement under the ECC. This enables operators to apply for new Code rights, often leading to lower consideration and more favourable terms for operators.

Landlord and Tenant Act 1954

Conversely, if an agreement is a lease, the landowner may benefit from security of tenure, statutory renewal rights, and stronger bargaining power under the LTA 1954. The Court’s decision therefore represents a clear win for telecoms operators and a cautionary tale for site providers relying on historic drafting conventions.

Practical implications

This decision from the Court of Appeal has wide‑ranging implications:

• Legacy agreements containing minimum‑term‑plus‑rolling‑continuation wording should be reviewed as a matter of priority.
• Landowners should not assume that historic arrangements confer leasehold protection merely because rent is paid and exclusive possession exists.
• Telecoms operators may find renewed scope to invoke the ECC in relation to long‑standing sites previously assumed to be protected by the LTA 1954.

The case also underscores the courts’ continuing insistence that substance, not labels, determines the nature of an agreement.

Conclusion

AP Wireless II v On Tower is a landmark authority on lease certainty in modern property law. By reaffirming orthodox principles while rejecting automatic conversion to periodic tenancies, the Court of Appeal has reshaped the legal landscape for telecoms agreements entered into both before and after the introduction of the new Code.

For practitioners, the message is clear: certainty of term remains non‑negotiable, and historic drafting shortcuts can carry significant consequences decades later.

How Hamlins can help

The Hamlins Real Estate Disputes team has expertise in both commercial and residential matters. We seek to obtain the best outcome possible for every client, no matter how big or small the issue may be. If you would like a conversation to find out how we might help you, please get in touch.