Rural Water - Quarter 3, 2008 - (Page 21)

While these leases are considered a good source of revenue with minimal obligation, you should balance the need for the revenue against the protection of your entity’s other interests. After you have decided to lease your property for the installation of wireless equipment, you may be asked to review and sign a lease that governs your relationship with the tenant. The lease will contain some familiar and common lease terms, but it may also include technical provisions related to the wireless equipment. In reviewing the lease, it is important to clarify the meaning of the “technojargon,” to identify negotiable and nonnegotiable issues, and to understand the obligations of each party. Here is a general overview of issues to consider in the landlord-tenant relationship; however, you should seek legal advice from an attorney before you make any promises to the tenant: • Term. Generally, tenants want a longterm lease, from 10 to 20 years, to ensure that their investment is paid for by the provision of years of cell phone service in a community. If you don’t want to be locked into a 20-year relationship, consider a lease with four renewal periods of five years. Be sure to specify how the relationship is renewed, and if the rent increases during each renewal period. Also, the lease should specify if/when you or the tenant can terminate the lease early. If the tenant terminates, will a penalty or termination fee apply? Also, what will happen to the equipment when the relationship ends? Will the tenant remove it, or will you assume ownership of it? • Rent. The key to the appropriate rental rate is the same as the familiar mantra of real estate: “Location, location, location.” The rental rate will vary depending on the size of the population served, the coverage area, the type of lease (land or structure), and the amount of space leased. If possible, contact neighboring and similar communities to determine their rental rates. Also, ask the lease representative why your property was selected for installation of wireless equipment. Is the property desirable in a unique way (for example, atop a hill or near a busy highway)? Is the purpose of the equipment to increase capacity, improve coverage, or both? • Premises. The lease should specifically describe the “premises” — where the tenant’s wireless equipment will be located on the parcel, building, or water tower. You should ensure that the installation on the premises will not damage your structure or interfere with your use of it. Also, consider whether the tenant will have exclusive use of the area, or whether you want to keep space available for other tenants. Tall water towers are attractive locations for wireless antennae, and they can often accommodate more than one tenant’s equipment. Don’t limit yourself — and your revenue stream — unless you need to do so. If your lease is non-exclusive, meaning that you can lease space to other tenants, you may not want to be required to seek the tenant’s permission before you sign a lease with a different tenant. In fact, each tenant should be required to move its equipment, if necessary, to facilitate the placement of other wireless equipment or to preserve your use of the site. • Access to premises/equipment. The tenant may require 24/7 access to the premises in order to install, inspect and maintain its equipment and respond to equipment failures or emergencies. However, you may specify the way the tenant may access its premises (through a particular service entrance, for example). The type of access will depend on the premises. For example, you may not need to limit a tenant’s access to an undeveloped parcel of land, but you may want to accompany a tenant who wants to access the top of your water tower. Also, you should narrowly tailor the tenant’s access to the wireless equipment, and prohibit access to and interference with other parts of your property. • Installation/maintenance. The lease should specify what equipment the tenant may install on the premises, and the tenant should prove compliance with all laws in the installation process. You may also impose other structural or construction guidelines for the equipment to ensure the quality and safety of the wireless equipment, such as requiring compliance with local building or electrical codes. In the case of a freestanding cell tower, you may require that the tower is designed and constructed to collapse on itself, or require that the tower is set back from property lines within a designated “fall zone,” to prevent damage to neighboring properties. To ensure the continued integrity and safety of the wireless equipment, the tenant may be required to routinely inspect, maintain, or upgrade the equipment. • Collocation. To minimize the number of freestanding towers in your community, you can require collocation — location of more than one cellular provider on a single wireless structure. The number of providers that can reasonably locate on a tower is determined by the height, location and type of tower. Your lease should specify a method for you to determine if collocation has occurred — or if the tenant has made reasonable attempts to facilitate collocation. Also, the lease should specify if you will share in any rent paid by other providers, or if your rent with the tenant includes collocation rent. Note that collocation is probably not possible for a tenant who is placing wireless antennae atop a water tower — in that situation, you should maintain your ability to rent the remaining portion of the water tower to other providers (see previous). >>23 The burden on towers and antennae has increased dramatically in the past few years — not only do more people use cell phones, more people use the multi-tasking “smart phones” that receive a streaming signal for text messaging, e-mail and Internet access. Third Quarter 2008 • 21

Table of Contents Feed for the Digital Edition of Rural Water - Quarter 3, 2008

Rural Water - Quarter 3, 2008 Contents From the President From Hypo to Gas - A Forward Leap If You Lose All Your Data Today... Would You Still Be in Business Tomorrow? Weaving the Wireless Web Rural Water and the Farm Bill Ensuring Your Water System's Security Guarding Against Becoming a Victim of Fraud 10 Ways to Improve Utility Efficiency New Technology Making a Difference By Being Involved Regulatory Update Source Water Protection Corner Throwing My Loop Cub Scouts Visit Alliance of Indiana Rural Water's Spring Conference Advertisers.com Index to Advertisers From the CEO

Rural Water - Quarter 3, 2008

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