Commentary on provisions of Bill
Clause 1: Code rights in respect of land connected to leased premises
12 Clause 1 inserts Part 4A into Schedule 3A to the 2003 Act. Part 4A makes provision regarding code rights in respect of land connected with leased premises, in the case of unresponsive occupiers. "Code rights" is defined in paragraph 3 of the Code.
13 In particular, clause 1 inserts paragraphs 27A to 27I into the Code.
Paragraph 27A: Introductory
14 This paragraph states that Part 4A of the Code makes provision for the court to impose an agreement which provides that code rights are exercisable by an operator. Those rights are for the purpose of providing an electronic communications service (defined in section 32 of the 2003 Act) to leased premises in certain circumstances. Those circumstances include where the occupier (defined in paragraph 105 of the Code) or other person with an interest in the land has not responded to repeated notices given by the operator seeking agreement to confer or otherwise be bound by the Code rights.
Paragraph 27B: Circumstances in which an application for an order under this Part can be made
15 This paragraph makes provision in respect of the circumstances in which an application for an order under Part 4A can be made. Specifically:
a. there are premises (referred to in this Part as "the target premises") which are occupied under a lease;
b. the lessee in occupation of those premises requests an operator to provide an electronic communications service;
c. to fulfil that request, the operator requires a person (referred to in this Part as "the required grantor") to agree to either confer on the operator a code right in respect of "connected land" or be bound by such a code right exercisable by the operator;
d. the operator has given the required grantor a notice seeking that agreement (referred to as a "request notice"); and
e. the required grantor has not responded to the operator.
16 Sub-paragraph (2) makes provision for the premises which are within the scope of this Part. Those are (a) if they form part of a multiple dwelling building (defined in paragraph 27I(1)) or (b) other premises of a description specified in regulations. Such regulations are subject to the negative resolution procedure.
17 "Connected land" is defined in sub-paragraph (3) as meaning land which is (a) in common ownership with the target premises, and (b) held or used for access to, or otherwise in connection with, the target premises.
18 Sub-paragraph (4) makes provision for what constitutes a response by the required grantor. Any engagement in writing by the required grantor with the operator constitutes a response for these purposes.
Paragraphs 27C and 27D: Requirements to be met before applying for an order under this Part
19 Paragraph 27C makes provision about the requirements which an operator has to meet before applying for an order under the new Part 4A.
20 Sub-paragraph (1) provides that an operator may not apply for a Part 4A order unless it has given the required grantor: (a) two warning notices, and (b) a final notice.
21 "Warning notice" is defined in sub-paragraph (2) as being a notice in writing which (a) includes a copy of the request notice given to the required grantor, (b) states whether it is the first or second of the three notices that the operator must give before it can apply for a Part 4A order and (c) explains the effect of a Part 4A order.
22 Sub-paragraph (3) provides that the first warning notice may only be given once 7 days have passed from the date the request notice was given.
23 Sub-paragraph (4) provides that the second warning notice may only be given once 7 days have passed from the date the first warning notice was given.
24 "Final notice" is defined in sub-paragraph (5) as being a notice in writing which (a) includes a copy of the request notice given to the required grantor, (b) states that the operator intends to apply for a Part 4A order unless the required grantor responds within 14 days from the date the notice is given, and (c) explains the effect of a Part 4A order.
25 Sub-paragraph (6) provides that a final notice may only be given within the "permitted period", defined in sub-paragraph (7) as beginning once (a) 7 days have passed since the day that the second warning notice was given, or (b) 28 days have passed since the day that the request notice was given, whichever ends later, and ending once 28 days have passed since the day the second warning notice was given.
26 Sub-paragraph (8) provides for the making of regulations to specify any further conditions that an operator will need to satisfy before issuing a final notice.
27 In paragraph 27D, sub-paragraph (1) makes provision in respect of when an operator may apply to the court for a Part 4A order. This includes where the operator has given the required grantor a final notice and where the required grantor has not responded to the operator.
28 Sub-paragraph (2) provides that an application may not be made after the end of the specified period (as provided for in regulations made by the Secretary of State, pursuant to sub-paragraph (5)). Regulations made pursuant to sub-paragraph (5) are subject to the negative resolution procedure.
29 Sub-paragraph (3) provides that the operator must give notice to the required grantor that it has applied for a Part 4A order.
30 Sub-paragraph (4) makes provision for what constitutes a response by the required grantor. Any engagement in writing by the required grantor with the operator constitutes a response for these purposes.
Paragraph 27E: When a Part 4A order can be made and its effect
31 Sub-paragraph (1) provides that the court may make a "Part 4A order" if (and only if) (a) the requirements for applying for the order (i.e. paragraph 27C) have been met and (b) the required grantor has not objected to the making of the order. Sub-paragraph (2) provides that a Part 4A order is an order which imposes an agreement between the required grantor and the operator by which the former confers on the latter the code right identified in the request notice in respect of the connected land so identified.
32 Sub-paragraph (4) provides that the terms of an agreement imposed by a Part 4A order must be those specified in regulations. Those regulations will be subject to the affirmative resolution procedure. Sub-paragraph (5) states that those regulations must in particular provide for an agreement to include terms relating to a number of matters, including:
a. restricting the operator’s right to enter on the connected land to specified times except in cases of emergency;
b. imposing requirements on the operator relating to insurance cover and indemnification of the required grantor; and
c. relating to the maintenance or upgrading by the operator of apparatus installed on, under or over the connected land in the exercise of the Part 4A code right.
33 Sub-paragraph (6) provides that, before making regulations, the Secretary of State must consult various parties, including operators and persons appearing to the Secretary of State to represent owners of interests in land who are likely to be affected by the regulations.
Paragraph 27F: Exercise of Part 4A code rights
34 This paragraph provides that code rights may be exercised by the operator in respect of the connected land for the purpose of providing an electronic communications service to the target premises. By virtue of sub-paragraph (1)(b), a Part 4A code right may also be exercised in respect of premises other than the target premises but only if the provision of the service to those other premises imposes no additional burden on the required grantor.
35 Sub-paragraph (2) makes provision for what an additional burden includes.
Paragraph 27G: Expiry of Part 4A code rights
36 This paragraph provides for the circumstances in which a Part 4A code right ceases to be conferred on the operator by, or otherwise to bind, the required grantor. That includes if a replacement agreement comes into effect, in accordance with that agreement. "Replacement agreement" is defined in sub-paragraph (2).
37 Another circumstance is where the right has not ceased to have effect before the end of "the specified period" beginning with the day on which the agreement imposed by the Part 4A order comes into effect, at the end of that period.
38 Sub-paragraph (3) provides that "the specified period" is the period of no more than 18 months specified in regulations. Such regulations are subject to the negative resolution procedure. The effect of sub-paragraph (3) is that Part 4A code rights will in those circumstances cease to have effect at the end of a period lasting no more than 18 months.
Paragraph 27H: Compensation
39 This paragraph provides that the court may order an operator to pay compensation to the required grantor for any loss or damage sustained, or that will be sustained by the latter, as a result of the exercise by the former of a Part 4A code right.
40 Sub-paragraph (3) provides that the court may make an order to pay compensation at any time after the Part 4A order has been made.
41 Sub-paragraphs (4) to (6) make related provision in relation to an order to pay compensation. Sub-paragraph (6) in particular provides that such an order may provide for the operator to do certain things, including making a lump sum payment or periodical payments.
42 Sub-paragraph (7) provides that paragraph 84 of the Code (compensation where agreement imposed or apparatus removed) makes further compensation in the case of a Part 4A order. A related amendment to paragraph 84 is made by clause 2 and paragraph 3(10) of the Schedule to this Bill.
Paragraph 27I: Interpretation of this Part
43 This paragraph sets out the interpretation of various key terms in Part 4A of the Code, including "multiple dwelling building", "required grantor" and "target premises".
Clause 2 and Schedule: Related amendments
44 Clause 2 and the Schedule provide for related amendments to the 2003 Act and the 2017 Regulations.
45 Paragraphs 1 to 3 of the Schedule make various amendments to the 2003 Act.
46 Paragraph 2 amends section 402 of that Act. The effect of that is to provide that regulations under paragraph 27E(4) of the Code (i.e. the power to specify in regulations the terms of an agreement imposed by a Part 4A order, as inserted by clause 1 of this Bill) are subject to the affirmative resolution procedure.
47 Paragraph 3 makes various amendments to the Code. Those include (in sub-paragraph (7)) an amendment to paragraph 26 of the Code, so as to provide that an operator may not make an application for interim code rights under that paragraph if there is a "relevant Part 4A agreement" in effect between the operator and the person. "Relevant Part 4A agreement" is defined, in general terms for the purpose of these Notes, as an agreement imposed by an order under Part 4A.
48 Paragraphs 4 to 6 of the Schedule amend the 2017 Regulations. Paragraph 4 in particular amends those regulations to add Part 4A of the Code to the definition of "relevant proceedings" in those regulations. The effect of that is that proceedings under Part 4A must be commenced in the Upper Tribunal (in relation to England and Wales) or the Lands Tribunal for Scotland (in relation to Scotland). Such proceedings are also transferable from the court to (in relation to England and Wales) the county court or (in relation to Scotland) the sheriff court.
Clause 3: Extent, commencement and short title
49 Clause 3 makes provision in relation to the extent, commencement and short title of the Bill.
50 These provisions are explained in territorial extent and commencement sections of these Notes.