Are You Being Underpaid?


Lease Underpayment is a real issue. Don’t leave money …your money…on the table.

In our experience, the number one reason wireless site landlords are subject to a lease underpayment is because their wireless site tenant has taken and now occupies more space than is allotted to them in the cell site lease.

How much more space?

We often see overages from as small as 4% over-occupancy to as much as 70% over-occupancy.  That can translate to hundreds or thousands of dollars of lost revenue each month.

How might this happen, you ask?  Well, sometimes a wireless carrier will simply decide that it must have more space for one or more extra cabinets.  Knowing its need, the carrier constructs the addition without bothering to notify the landlord, much less get the landlord’s permission.

Sometimes  it’s a misunderstanding or misreading of the plans.  Sometimes it’s a contractor’s mistake during the site installation.  Sometimes it’s because the tenant, without telling you, moved the actual location of the site or reoriented the site (both of which really ARE an over-occupancy in most cases).

If you, the wireless site landlord are not attentive, the overage may go unnoticed.  That’s a ‘shame on you’ for not tracking your tenant.

Sometimes the landlord isn’t sure, or it seems like a small overage, so it goes uncontested.  Not contesting a known of suspected overage is a potentially Really Big Mistake that only benefits your wireless tenant. Why would you want to do that?

Let’s look at some numbers.  You’ll see why you MUST keep an eye on your wireless tenant’s occupancy of your land.

To start, here are some basic facts in two different situations, based on matters we’ve handled for wireless landlord clients (the facts have been altered slightly to protect the identity of our clients and the guilty wireless carriers):

(All numbers are approximate to protect client confidentiality.)

Case 1 Case 2
Rent per Month per Lease: $915 $800
over-occupancy/Underpayment: 4% 23%
Years of over-occupancy: 9 14
Years remaining on Lease: 21 11
Recovered Underpayment: $3,900 $34,100
Recovered Back Interest: $1,800 $25,000
Additional Back Payment: $2,500
Added Value for the
Remaining Lease Term:
$12,800 $24,000

Value Recovered for our Client:

$21,000

$83,100

 

 

 

 

 

 

 

 

 

 

 

 

 

In other matters we’ve handled for clients, we’ve recovered and/or created six-figures of value for underpayments or over-occupancy, but that magnitude of recovery is less frequent.

Obviously we’re not talking about small dollars, here.    The examples above, however, should give you a basic idea of why you, as a wireless site landlord, should check the occupancy, and not leave money on the table when dealing with occupancy overages.  We know where to look for money on the table, and how to negotiate the fair recovery.

So what’s your first step as a Wireless Site Landlord to see whether you’re on the short end of the occupancy deal? Actually, there are three steps.

Tips for Checking for Over Occupancy

Step 1: Pull out your wireless lease, including all of the exhibits.  You’ll need the entire lease to review after you’ve completed the third step.

Step 2 is grab (to go to your local hardware store and buy) a 100′ fiberglass measuring tape.  At Telecom Law Firm, when we do site measurements for our clients, we use a 100 foot tape measure like the one shown here.  It will set you back the princely sum of somewhere between $14 to $25.

tape-measure.small

This simple device is the landlord’s best tool to see if the lease rent is being underpaid.

Step 3 is to go out and measure the outside edges of your wireless tenant’s cell site.  For ground-mounted facilities, this will usually be the outside of the fence or wall.   While you’re at it, take lots of high resolution photos of the site from at least all sides.  This will be very helpful later if you find an over-occupancy and decide to you wan to pick up the money laying on the table.

(It gets trickier to properly measure the boundaries of a rooftop site…call us toll free on 855-Cell-Site and we’ll give you some helpful pointers specific for your site.  No charge. By the way, still take the photos before you call…we’ll want to look at them to give you the pointers.)

With the lease data and the actual measurements, you can figure out whether your wireless tenant is over occupying the leasehold, and if so by how much.   If you find that an over-occupancy exists, it’s time to pick up the phone can call your local attorney if your attorney is specifically knowledgeable about cell site leases and occupancy.

If you’d like to call us and discuss your findings and your lease terms, we’d be pleased to talk with you.  There is no charge or origination for the initial call.  As is always the case in legal engagements, and most of the time in life, every matter is factually unique.  Accordingly, prior results do not guarantee a similar outcome in your matter.  We’re at the other end of  our toll free number:  (855) Cell-Site.  For those of you who like to dial by digits, that’s 855-235-5748.

Good hunting!

PS: What about the case where the tenant has UNDER-occupied the lease space?  Most of the time its not an issue for the landlord.  If you find this to be the case, or if the tenant wants a rent reduction or refund because they are not occupying as much space as they agreed to in the lease, give us a call.  We’re pretty sure you’ll like our usual answer to this unusual situation.  (855) Cell-Site.