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red herring
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Anatomy Of A Cell Tower Lease (red Herrings
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Cell tower leases are fairly standard. They contain the obligatory one and 5 year options, lease payment amount, escalations % and frequency and of course the term of the lease, legal description and memorandum for filing. Let me break it down for you using my non attorney background. You may want to check with your legal eagle before acting on my dissertation.

Most leases start out with an option period of one year with a very nominal amount of option money, usually $100. This is the time the cell carrier spends in acquiring zoning, permits and construction. At the time of completion you'll receive a 'commencement lette'.

Most leases call for monthly payments (in advance). There are penalties for non-payment described in the cell lease document. There will be a clause that describes how much and how often the monthly rent will increase (escalate). Most leases I've red are 3% increases each anniversary (year from commencement letter). I've seen many that are 10% and 15% each 5th year anniversary.

Next you'll find the 5 or more 5 year option periods in which the carrier will deliver signed extension to you prior to the end of the prior extension. This is the RED HERRING. I spoke of earlier, as the next short paragraph gives the cell carrier the absolute right to cancel the lease for any reason with 30 to 90 days notice.

Other legally binding articles you may find in your lease are 'right of first refusal' and the right of assignment. The right of first refusal, referred to in the industry as a ROFR.

The right of assignment can be used by the carrier to be able to add additional carriers to the tower or rooftop. This is very important, depending on how this is written it can affect both the future footprint of your cell site. This is the right of way easement which will be recorded. Either a general easement (broad agreement to allow basically whatever the carrier needs) or a specific easement which is a well defined footprint for your cell tower or rooftop.

You, as owner of the cell lease may have to get the approval of a buyer prior to selling your lease. This is uncommon, but can have serious consequences if a carrier decides they don't 'feel' like granting their approval.

Keep in mind that you are playing on the cell carriers' turf, they know the language and most of you don't. Before signing anything, get a legal opinion. Just saying.


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