AT&T Cingular Lease Amendment
Since the merger between AT&T and Cingular closed in November 2005, many landowners with Cingular cell tower leases or AT&T Wireless cell tower leases have been notified, via letter or telephone call, that as a result of the merger between the two carriers, land leases must be renegotiated. The letter and/or phone representative will go on to state that in the event the landowner does not renegotiate, Cingular will be forced to terminate the existing lease. Before agreeing to the AT&T Cingular Lease Amendment, Cell Tower Attorney can assist you.
The proposed AT&T Cingular Lease Amendment typically incorporates one or more of the following provisions:
- Purpose - the AT&T Cingular Lease Amendment states in the Recital that the landowner’s property is no longer consistent with the operation of its network and rather than terminate the Agreement, Cingular’s intent is to sell and transfer its equipment on the property and assign the Agreement to a yet-to-be determined third party at some time in the future. In exchange for Cingular’s effort to sell its equipment and assign the existing Lease to a third party, the Landowner agrees to an abatement of the rent by as much as half or more.
- Rent Abatement Period - the AT&T Cingular Lease Amendment establishes a time period in which the Rent abatement will commence and expire, usually 3 to 5 years, during which Cingular will attempt to sell its equipment on the land and assign the existing Lease to a third party. It also states that the landowner automatically consents to the sale and assignment of the Agreement to the unidentified third party and that during the rent abatement period, the landowner may not terminate the existing Agreement for any reason whatsoever.
- Sale of the Lease - the AT&T Cingular Lease Amendment states that in the event of a sale of the Cingular equipment and assignment of the Agreement, the third party will be responsible for all of Cingular’s obligations under the Lease, including the obligation to pay the rent going forward from the date of the sale and assignment. In addition, it states that the Assignment Agreement between Cingular and the third party will increase the rent under the existing Lease by ten 10% going forward. It further states that upon such Assignment, Cingular will be relieved of any liability and obligations under the Lease.
- Necessary Approvals - any purchase and assignment by a third party under the AT&T Cingular Lease Amendment is contingent upon the landowner’s property being suitable for the third party’s use as well as the third party’s ability to obtain any necessary government approvals and permits. Accordingly, the landowner automatically authorizes the third party to file necessary applications, order utilities, perform a title background of the property, and perform various environmental studies to determine, in the third party’s sole discretion, if the landowner’s property is suitable and compatible for its use.
- Failure to Assign the Lease to a Third Party - the AT&T Cingular Lease Amendment provides that in the event the Lease is not sold, the Lease will automatically terminate at the end of the rent abatement period and Cingular may leave all permanent fixtures and personal property on the landowner's property and title will transfer to the landowner. Notwithstanding the stated intent of theAT&T Cingular Lease Amendment , Cingular retains the right, prior to the expiration of the rent abatement period, to avoid the automatic termination of the Lease and elect to keep the site for its own use. If it so chooses, the Lease is reinstated, however, the rent is increased by 10% of the rent due prior to the rent abatement period.
This Amendment is undoubtedly confusing to a landowner that is not familiar with the telecom industry or does not negotiate these types of agreements for a living. More importantly, it may seem quite unsettling to one that has grown used to or even relied upon the monthly payment from Cingular. Unfortunately, the harsh reality is that one of the stated goals of the merger is to eliminate cell site redundancy or duplication by terminating existing cell sites that are no longer necessary. Our partner company Steel in the Air, Inc. can specifically review your location and help you make an informed decision. They specialize in outlining the risks involved with specific AT&T / Cingular cell tower lease locations using their proprietary cell tower database.
In the face of losing a valued source of revenue, how should a landowner respond to such an AT&T Cingular Lease Amendment with the above-stated language? Merely ignoring the request may buy the landowner some time and keep the “status quo”, however, it may ultimately result in more frequent phone calls and letters and ultimately, the landowner may risk losing the site completely due to termination.
This is where Cell Tower Attorney can help. We can assist you in negotiating an AT&T Cingular Lease Amendment that:
- Maximizes your return on the leased property in light of Cingular’s goal to reduce its operating expenditures.
- Protects your rights under the AT&T Cingular Lease Amendment as well as the existing Lease by narrowly defining the obligations of the parties and contingencies.
- Protects you and your property from further liability and the likelihood of unanticipated circumstances or uses occurring on the property.
If you have been approached, please consider contacting us for assistance in your lease negotiation.
*** If you are looking for Cingular's website, please visit www.att.com. We are not affiliated in any way with Cingular.***