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Cell Tower Lease Agreement | 7 Items To Look Out For

By Nick G. Foster

April 29, 2015

Cell tower lease agreements are unlike any residential, or commercial, lease agreement. This is due to the very specific use of a cell tower, also known as an unmanned communications facility. The cell tower lease agreements are typically presented by the tenant, not the landlord. This is the complete opposite of traditional residential and commercial leasing. Since the property owner is likely going to sign a lease agreement drafted by the tenant, it is imperative that the agreement is thoroughly reviewed by cell tower lease experts such as Airwave Advisors®.

Here are 7 Common Cell Tower Lease Agreements Items To Look Out For:

1. Premises Lease Only Lease What You Have To

It is absolutely alarming when we see cell tower lease tenants requesting 100′ x 100′ land lease areas (10,000 square feet). They simply don’t need that much space. Most cell towers only require a few hundred square feet of land, not 10,000 square feet. Don’t lease more property than you need to; you will be giving up more than just the rights to that land for the next 25 years.

2. Don’t Negotiate Rent Without An Expert

We often review lease agreements of previous deals negotiated by property owners without the help of experts. It pains us to see low rents, bad lease language, and unfavorable terms for the landlord. The cell tower lease companies have experts on their side, shouldn’t you? Have cell tower lease experts such as Airwave Advisors assist you in your cell tower lease negotiation and don’t leave money on the table.

3. Rent Escalations

Here again, we see many deals that were negotiated by property owners without the help of cell tower lease experts, which resulted in unfavorable lease provisions for the landlord. The value of money decreases over time, and so can your cell tower lease. Unfortunately, many landlords do not realize that they may leave tens, or even hundreds of thousands of dollars on the table, simply because they did not use a landlord advocate like Airwave Advisors. The cell tower lease companies have experts on their side, shouldn’t you? Have cell tower lease experts such as Airwave Advisors assist you in your cell tower lease negotiation and don’t leave money on the table.

4. Take Caution When Granting Options

Many new cell tower lease agreements are options in the beginning. The tenant writes the landlord a one-time check and they have the option of exercising the lease or passing on the opportunity. We have received some new leases agreements where tenants are asking for three (3) to five (5) year options in exchange for paying the landlord $100.00. Proposals like this are a red flag, how serious is this tenant to really rent your property? Be very cautious when granting anyone an option to lease your period for an extended period of time. What is that option worth to you?

5. The Minimum Amount Of Term The Better

Extension terms, while attractive to landlords in commercial leasing, are not in the landlord’s best interest in cell tower leases. That is because cell tower leases typically allow for the tenant to terminate with thirty (30) days notice, however, the landlord cannot terminate until lease expiration. So if the landlord agrees to thirty (30) years total in lease extensions, they are locking themselves into the lease for that period of time, while the tenant can terminate next month if they want to.

6. Remove The Right Of First Refusal

The Right of First Refusal, or Right On Sale, provision needs to be removed from any cell tower lease agreement. The tenants rights are significantly protected in the lease agreement and this provision is overreaching. By keeping this provision in the cell tower lease agreement, you significantly restrict your ability to sell the cell tower lease in the future. When many buyers see this provision in a lease, they will not waste their time on making an offer to purchase your lease. Why make an offer to buy something, if someone can just take the deal at the price you have offered? Don’t limit your options – have the right of first refusal removed from your cell tower lease agreement.

7. Tenant’s Have Experts On Their Side, Make Sure You Have Experts On Your Side

There is a reason cell tower lease companies use cell tower lease experts in every deal – results – it gets them better deals. If your tenant is using cell tower lease experts to negotiate against you, shouldn’t you have cell tower lease experts looking out for your best interests?

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17 Comments

  1. Aliu Aitsegame on November 14, 2018 at 7:25 pm

    We need to renew our lease agreement, but this property is in another country. Can we ask for consultation for this?

    • Nick Foster on November 15, 2018 at 10:40 am

      Hi Aliu,

      Which country is the lease agreement in?

      All the best,

      Nick G. Foster

  2. Bradley Hinson on September 19, 2018 at 5:01 pm

    Buying land but there is a 50year lease contract on microwave tower is there anyway to get out of it. two people that I’m buying the land from passed away and it’s was given to daughter. Seems like they took advantage of them

    • Nick Foster on October 2, 2018 at 8:33 am

      Hi Bradley,

      In the event you would like to find a way to terminate the contract, please contact an attorney to advise you of your legal options.

      All the best,

      Nick G. Foster

  3. Joyce on August 19, 2018 at 8:04 pm

    Can we ask consultation even our property is in the other country? We need to renew the lease agreement.

    • Nick Foster on August 20, 2018 at 7:24 am

      Hi Joyce,

      Thank you for reaching out. I will send you an e-mail to discuss further.

      All the best,

      Nick G. Foster

  4. Gary on June 15, 2018 at 3:11 am

    How similar would you find easement or license of use agreements for fiber in exchange for internet service to tower leases? Are there any templates out there for modification?

    • Nick Foster on June 15, 2018 at 8:40 am

      Hi Gary,

      I would have to review the specific agreement you are mentioning to provide you an assessment on the similarity of that document to a cell tower lease. There are no templates that I am aware of available to the public for modification. Typically property owners hire consultants or legal counsel to assist them in the review and revisions of the proposed document.

      All the best,

      Nick G. Foster

  5. Judy on April 14, 2018 at 8:03 am

    What is the fee to review a proposal and provide consultation?

    • Nick Foster on April 19, 2018 at 8:21 am

      Hi Judy,

      Please give us a call to discuss fees to review a proposal and to provide consultation. We can be reached at (888) 443-5101.

      All the best,

      Nick G. Foster

  6. danny katindig on January 9, 2017 at 8:59 pm

    how many yrs did the cell site must be reconstruct! the cell site beside my house is already 15yrs old.im wondering if the cell site still in good condition !

    • Nick Foster on January 9, 2018 at 10:26 am

      Hi Danny,

      This is a tough question to answer without getting eyes on the tower. Typically cell towers have a life span of over 30 years dependent on construction, load/stress on the tower, wear and tear, etc. It is very rare for towers to be torn down and replaced. Most towers constructed in the 1980s and 1990s are still standing today.

      All the best,

      Nick G. Foster

  7. Dayanand on November 17, 2016 at 9:45 pm

    I want to give my land to rent for tower

  8. Parker on September 9, 2016 at 8:32 pm

    Your insight is very informative, I would love to see a more extended list.

  9. janine on May 18, 2015 at 1:25 pm

    I am volunteering with my daughter’s school for some property issues. One of them is a cell tower lease which seems to provide outs for the cell phone company but nothing to the school. The first term on the expired last month and automatically renews for 4 additional 5 year terms unless the cell phone company notifies the landlord. It is completely one-sided and the school would like to get rid of it. Any suggestions would be greatly appreciated.

    • Nick Foster on May 18, 2015 at 1:31 pm

      Hi Janine,

      Thank you for your message. I understand the school’s frustration – cell tower lease agreements are completely one-sided, unless they are negotiated with the help of a cell tower lease expert. Given the school’s situation, and without the benefit of actually looking at the lease agreement, I am guessing the only mechanism to terminate the lease agreement will be upon a monetary default (non-payment of rent) by the cell phone company. If the school is serious is pursuing a termination they should have the lease reviewed by an expert, however the outcome is likely there will not be an opportunity to terminate.

      ***Please note the above suggestion is not a substitute for legal advice.****

      All the best,

      Nick Foster

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Nick Foster Airwave Advisors

About Nick G. Foster

Since founding Airwave Advisors® in 2014, Mr. Foster has added value to over 400 clients ranging from the State of Nevada, City of Beverly Hills, to Habitat For Humanity. Mr. Foster focuses on cell tower lease renewals, buyouts, new lease negotiation, and cell site lease management. Prior to starting Airwave Advisors® Mr. Foster founded and led the Cell Site Services Group within nationwide commercial real estate services leader Cassidy Turley (now known as Cushman & Wakefield).

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