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Cell Tower Leases – What Does Your Bank Say?

Be sure to check with your bank or other mortgage holder before you sign a cell tower lease.  That’s because the lease may violate your mortgage, which could put you in default, even though your payments are up to date. Being in default on your mortgage is not good.

The reason for concern is that banks (or whoever holds the mortgage on your property) don’t want the value of your property decreased, as this reduces the security for their loan.  A poorly drafted cell tower lease can harm property values by restricting your ability to develop or use the property for years in the future, or otherwise “sell off” too many rights to your property.

For this reason, mortgage holders will sometimes veto cell tower leases – at least until the objectionable terms are removed. Getting rid of those terms is usually beneficial for you.  And even if the veto stands, you will have avoided a mortgage default.

So a word to the wise – always check with your bank or other mortgage holder before you enter into a cell tower lease.  It may improve your lease terms or prevent you being in default on your mortgage.

© 2022 Varnum LLPNational Law Review, Volume II, Number 1
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About this Author

John W. Pestle Telecommunications Attorney Varnum
Counsel

John represents property owners nationally (35 states and counting) on cell tower leases. Since 1996, he has led the firm’s practice in this area.

Most of John’s work is on the sale of cell tower leases and future leasing rights, which as of mid-2022 sold for around twenty times annual revenues. He brings his experience to bear on helping clients decide whether to sell, getting bids for the best price and terms, and negotiating the document (typically a long term “easement”) selling the lease and future leasing rights. He also represents clients...

616/336-6725
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