Approached by MD7 to Renegotiate A Cell Tower Lease?
If you are looking for the MD7 company website, please visit http://www.md7.com/. Cell Tower Attorney is an independent law firm that assists landowners with among other things, negotiating the terms and conditions of an Agreement with MD7.
MD7 is an independent company which specializes in cell tower lease rent optimization and reduction on behalf of cell phone carriers. As an agent for cell phone companies such as AT&T, T-Mobile and Sprint Nextel, MD7 is given authority to renegotiate the legal terms and lease rates of cell site leases with landowners. These renegotiations are almost always to the disadvantage of leaseholders.
More specifically, MD7 is retained by various carriers to help reduce operational expenses on a going forward basis. Historically, one of the reasons why cell phone companies have retained MD7 is to assist in eliminating redundancies in cell site locations as a result of industry mergers between AT&T and Cingular, and Nextel and Sprint and most recently, the pending merger between AT&T and T-Mobile. Frequently, the MD7 representatives use high pressure sales tactics to “scare” a leaseholder into believing that their cell site lease is at risk of termination.
Generally, we believe that the likelihood an individual cell site lease will be terminated is relatively low. However, MD7 representatives are accurate when they warn leaseholders that some sites will be “de-commissioned” or terminated as a result of mergers and/or technological advancements that may render certain sites obsolete. In fact, a small percentage of AT&T and Cingular cell tower locations have already been terminated, as well as a number of Nextel and Sprint cell tower locations. As with most acquisitions or mergers, one of the benefits to the merged company is the reduction of duplicate assets, such as cell sites.
If an MD7 representative has contacted you about renegotiating the rate and terms of your cell tower lease, be aware of their hard selling sales tactics. This is because their sales representatives are compensated, in part, based on how successfully they renegotiate a lease to the carrier’s advantage – not yours.
For example, MD7 typically proposes to reduce your monthly lease rate by a specific amount in exchange for extending the lease term for an additional period of time. In connection with the rent reduction, MD7 offers a “rent guarantee” for part of the extended lease term. To an unknowing landowner, this “guarantee” is tempting because most cell site leases allow carriers to terminate for any or no reason on short notice (30-90 days). The MD7 representative may imply that this is a more attractive option than losing the lease altogether.
In addition to changes to the lease rate and length of term, MD7 may also try to include additional lease entitlements for the carrier, such as the ability to expand the leased premises if necessary, or the right to sublease and/or make certain modifications to the existing site. Unfortunately, most leaseholders do not appreciate the consequences of these changes to the lease. As a result, they may unnecessarily grant additional rights to the carrier or lose out on an opportunity for additional rent.
At Cell Tower Attorney, we can evaluate all of the above-referenced factors and the legal impact of such changes to your existing cell site lease.
Other Lease Renegotiation Considerations
While we can provide you with legal advice, our related company, Steel in the Air, can assist you with an analysis of your property to determine how likely it is that your property may or may not be eliminated based on the availability of other existing or future cell sites.