If you get one of these, be very careful to protect your rights…and your property’s value!
Lease Terminations are Bad News
Some wireless carriers are in the process of issuing cell site lease terminations for legacy sites they no longer need. Sprint has announced that they plan on terminating a significant number of their private property leases in favor of new leases on government property. The seem to think that governments will rent them property at lower rental rates.
In shuttering sites, some carriers, such as Sprint Nextel, are trying to shift significant legal liability and costs to their soon-to-be former landlords. In other cases, T-Mobile is shutting down sites because of its acquisition of MetroPCS.
Regardless of your tenant, read this page very carefully if you have received a termination notice!
For the balance of this page we’ll focus on Sprint Nextel, since they are shuttering a substantial number of legacy Nextel iDEN tower sites, and seem poised on shutting down even more Sprint sites.
For a Sprint Nextel tower site landlord, a lease termination translates to the loss of anticipated and substantial lease income for years or decades.
To add insult to injury, Sprint Nextel has employed third-party vendors to convince landlords why, on the way out, they should execute a novel “Lease Termination Agreement and General Release” document. This document can cost you–the site landlord and property owner–many thousands of dollars (or more) if you don’t understand all of its legally-dense burden-shifting terms.
Sprint Nextel, when terminating a lease, wants to save lots of money by not removing most of the equipment, wiring, conduits, cables, and other things it installs. Removal of these items is typically required by most wireless leases, as is returning the leasehold to the landlord in the same basic condition that existing just prior to the lease.
Sprint Nextel’s preference now seems to be to abandon the equipment in place and transfer title of the abandoned equipment, with no warranties whatsoever, to the site landlord. With the abandonment goes all of the legal liabilities, as well, which may include liabilities imposed by the local governments on Nextel, but transferred by this agreement to the landlord.
‘Just sign right here on the dotted line and you get to take on all of their discarded stuff and legal risks, and you save them a boat-load of money, too!’ is just one way to think about this proposed deal.
Jonathan L. Kramer
J.D., LL.M, FSCTE, CBT
Attorney and Counselor at Law
One of the Cell Site Lawyers
Even worse, at least one of Sprint Nextel’s vendors is suggesting in writing–but does not warrant–that they can likely find a replacement wireless tenant quickly because these decommissioned sites will be “plug and play” solutions for other carriers…IF…you give up a 25% commission for the life of the revenue stream the vendor can negotiate.
‘Plug and play?’ Huh? As a radio frequency engineer as well as an attorney, I don’t think much of the pitch is even remotely believable, but it might sound good to the unsuspecting landlord.
By the way, if you think that the pitch is good, check with me about buying a bridge in New York. I have a few priced for quick sale.
Why not take a look at a redacted copy of an actual Nextel Termination Agreement …here’s one.
Even if you’re not an experienced wireless lawyer, you’ll see why this deal is a terrible deal at for the Sprint Nextel Site landlord. Don’t let yourself get ‘kicked’ while they’re on the way out the door.
What to do: If you are a Sprint Nextel landlord and you’ve received a notice of termination (as have some of my clients), go back and pull out your lease documents, including amendments. Look at the termination terms and restoration terms. (They may be in several places in the lease.)
Even if you don’t get the follow-up sales pitch call to do the exit agreement, talk with your attorney. If you don’t have one, or your attorney doesn’t work on specialized telecom lease matters, please give me or one of our experienced cell lease attorneys a call for your free initial 30-minute consultation.
-Jonathan Kramer, Esq.
For a free initial 30-minute consultation with Jonathan Kramer, Esq. or one of our other experienced telecom attorneys, please on the link button or call us toll-free on (855) Cell-Site. For those of you who prefer dialing by numbers, it’s (855) 235-5748.