Of all the kinds of leases we have, cell tower lease agreements are perhaps the least familiar to most people. A cell tower lease refers to an agreement between two entities, a property owner who has some space for the installation of cell phone signal transmission equipment and a cell phone service provider. At times, the agreement is between a property owner and a tower company. These agreements grant cell phone service providers authorization to operate equipment on the land of the property owner in exchange for rent.
Before you decide to get into a cell phone tower lease agreement, there are certain things you need to be familiar with about the contract.
1. Types of Tower Leases
There are several forms of mobile tower lease agreements you should know, and cell tower lease rates will vary according to each type of agreement. A cell tower ground lease is the standard form of lease agreement and it spells out how much land shall be dedicated to the cell site construction. The contract also provides the operator access to and from the lease area.
The other type of phone tower lease is a lease expansion, which occurs when a wireless operator wants to expand the previously agreed-upon area. The third type of lease is an additional ground space lease, which typically entails leasing a new section of land to a different carrier.
Lastly, there is a tower collocation lease. This kind of lease is used whenever a carrier wants to use the ground space and cell tower on an already existing cell tower owned by a different tower company or carrier.
How Lease Rates are Determined
It is important to understand that lease rates usually tend to vary significantly from one location to another. For some property owners, the rental fees from one wireless operator can be over $150,000 annually, while in other locations the rates may barely reach $500 a month. These discrepancies arise due to several variables. The rates are fundamentally based on certain factors, including:
• The type of lease
• How critical the site is to network continuity
• The available alternatives for the operator
In summary, mobile tower leases are a great opportunity for property owners to earn some extra cash from their property. On the other hand, the leases provide wireless operators a great opportunity to expand their service without investing in land acquisition. There are different types of leases. The rates for leases will vary significantly from one location to another and depending on the type of lease agreement.
