Wayleave Agreement: How Much Do You Know?

You may not have heard of a Wayleave Agreement but they can have a huge impact on the cost of installing your connectivity if they aren’t considered early on in the tenancy occupation process.

What Is A Wayleave Agreement?

A Wayleave Agreement allows a service provider the right to install it’s equipment through or over a third party’s land. Historically these tended to be more relevant for property developers but the reliance on faster connectivity means that these are becoming more of a regular occurrence for tenants of commercial property.

Newer properties or recently refurbished buildings, developed by the more tech savvy, may have a fibre presence whilst older buildings tend not to. Many commercial leases allow the tenant to connect to an existing service but if there is no existing cabling in these areas it is of little use to the tenant. Unlike internal changes, more often than not the tenant does not have the right to carry out works in the areas surrounding their unit.

Installing Cabling

In the event of IT cabling not being readily available the tenant will need to instruct an IT service provider (like Korubu) for the installation of the cabling. When the cabling passes over or through common parts of the building or the exterior of the building, the tenant has no control. The tenant will therefore need to seek the landlord’s consent for cabling to be installed, unfortunately the landlord is under no obligation to agree to this nor to act reasonably with such application.

The process will involve the tenant commissioning the cabling, but the IT provider or OpenReach will need confirmation that the landlord has consented to the works. Contrary to popular belief it is in fact the landlord and the IT provider/OpenReach who enter into the Wayleave Agreement, not the Tenant.

Landlord Concerns

Any IT equipment which is installed is the property of the IT provider. The landlord will seek to ensure that the IT provider has not acquired any rights of possession as a result of the equipment being installed. The landlord will also want to ensure that the equipment is installed (and removed) at no cost to the landlord, that it is installed in accordance with relevant health and safety regulations and that there is no damage to the property.

Tenant Concerns

The obvious concern for tenants is ensuring that any IT equipment/cabling is installed and active in time to start trading. As the Wayleave Agreement is between the landlord and IT provider, the tenant has little control over the progress of completion.

As a tenant it is important to decide what your IT requirements are as early on in the process as possible. Establish whether or not there is existing IT capabilities within your unit as a first port of call. If not, the Landlord’s solicitor should be asked to confirm that its client is willing to enter into any required Wayleave Agreement and what the cost of that will be to the tenant. The Landlord’s solicitor and the IT provider will normally liaise direct to approve the installation works and agree the form of Wayleave Agreement but the Landlord will normally require its legal and agents costs to be paid by the tenant.

The need for a Wayleave Agreement is often overlooked or raised at a late stage. Failure to consider the need for a Wayleave Agreement may however have costly implications for a tenant who has entered into a binding Lease with its Landlord with obligations to pay rent but who cannot operate from the premises because it does not have the required IT infrastructure.

Legal Considerations

The Wayleave Agreement itself is not a complicated document and most IT providers have their own standard form. Some Landlord’s also have their own preferred standard precedent but most IT providers are happy to accept this. The costs for this can vary however and the Tenant should be made aware of this additional cost as soon as possible so it can be factored into the budget for the new premises.

Some Tenants may be cautious of entering into any contract with an IT provider before they have entered into a binding Lease with the Landlord. It is however advisable to make contact with an IT provider as soon as possible and to progress the application alongside the Lease negotiations so that the Wayleave Agreement can be completed at the same or as soon as possible after completion of the Lease.

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