Cell Tower Lease Lawyer or Business Partner?

When you’re looking for professional help on your cell tower lease matter, you DO NOT want (or need) a new business partner…for decades

Some firms that claim to assist landlords in cell tower lease matters structure their fees to take a percentage of the landlord’s income as payment for their services.

In nearly every case, we don’t think that’s a very good idea.  In fact, it can be a rip-off.

Here are some reason why this is a bad idea:

  1. Commonly, the percentage taken from the landlord’s future cell tower lease income is not proportionally related to the services rendered. The percentage taken can represent a fee that is unconscionably too much for the services rendered.  Attorneys are not allowed to charge an unconscionable fee; consultants can (and some do every day).
  2. Even if the percentage fee taken from the cell tower lease is reasonable, the ‘advisor’ effectively becomes your silent business partner for years or decades to come, commonly and silently taking somewhere in the neighborhood of 25% (yes, 25%!).  As your rent increases, the amount you pay the advisor increases, too.
  3. The advisor who works for a percentage fee of the cell tower lease income has ‘skin in the game.’  Your game. Don’t do a deal and the advisor doesn’t get paid the long term fees.  Don’t you think that the advisor is motivated to see you do a deal…any deal…so that he or she can be assured of a long term payday.
  4. If you want to sell your cell tower lease down the road, you’ll have to first hope you can renegotiate the deal with the advisor.  When you sell the lease, you sell the income stream.  How do you think the advisor will react when he/she learns that you are cashing out and there will be no more income for the advisor?

The bottom line is that if you’re talking with an advisor that wants a percentage of your cell tower lease income going forward, make sure you understand what the total fee will be over the life of the percentage override.   Paying $50,000 to $100,00 in a percentage fee over 20 or 30 years for what should have cost $8,000 to $10,000 in current dollars simply doesn’t make sense.

No sense at all.

Worse yet, in some/many cases, a signing bonus may be available from the lessee to offset your cell tower lease transaction costs altogether.

Questions?

Give us a call.  We’re here to help, and help with honest answers and fees for cell tower lease matters.

Caveat Lessor.