CABLE TV ACCESS EASEMENTS: ISSUES AND PITFALLS

by: Jeffrey A. Goldberg for CONDOLAWYERS.com

Many associations are being approached by telephone and cable television companies seeking access for the purpose of wiring their buildings for digital cable and broadband internet services. This new generation of telecommunications services sometimes involve a complete upgrade to the wiring and equipment. Many companies are working hard to install new equipment in an effort to be competitive in the emerging technologies of the internet. Because previous equipment and agreements may be inadequate, the companies typically submit a form access agreement to the board, which is usually named an "easement" "right of way" or "license" agreement.

It is urgent for associations to understand that they must not sign these agreements unless they have first had their attorneys review them. This article will touch on some of the trouble spots. However, it is necessary for you to have your attorney review and negotiate these types of agreements. You can be sure that a very high-priced and very competent attorney wrote the agreement in favor of the cable company and against you. These agreements contain problems, pitfalls, and traps that are best avoided.

Almost every agreement, regardless of what the cable companies might call it, provide for the board to grant an easement over the premises, in favor of the cable company. The first issue that all association boards must understand is that an easement is a permanent property interest in the association for the cable company to enter upon the premises. This property right can be sold or transferred and once it is granted it usually cannot ever be revoked by the association. The first question we must ask ourselves is why we would want to grant a valuable property right to a cable company for free? What is in it for the association? Also, does the board even have the authority to grant such an interest without unit owner approval (probably not)? If the board does grant an easement, it cannot ever remove the cable company from the premises, even if the cable company refuses to conduct itself properly.

Why not simply grant a revocable license?

The cable companies would prefer to have an easement because it is an enforceable property interest, but it is not necessary for them to have an easement just so they can provide digital cable or internet service. The appropriate agreement would be a license. This is not a property right. Rather, it is a personal contractual right of access over property for a limited time and for a limited purpose. Since no property interest is being conveyed, it usually does not require unit owner approval, and it should not be recorded..< More importantly, the board can revoke the license at any time and have the cable company removed

What if the access right is not called an easement?

It makes no difference what the access right is called. They might call it a right-of-way or a license, or perhaps a "service agreement." If it cannot be revoked by the board and the agreement provides for it to be recorded, then it is probably an easement. For this reason, you must have your attorney review it.

What if you want to terminate access rights?

You cannot throw the cable company out unless you have a license that permits the board to terminate at will the cable company's access rights. In order for the right of access to be a license, it must be revocable. The cable companies don't want to invest money by installing equipment and wiring only to have the board kick them out before they can recover their investment. They will argue that the board may not revoke the agreement until their costs and expenses have been recovered. To avoid this argument, it is a good idea to specifically agree that, while the board has the power to revoke the license and remove the cable company from the premises, the board will have to reimburse the company for its investment of costs and expenses for the installation work, if the board chooses to prematurely exercise its right to revoke before the expiration of a certain time period. That way, the board retains its power to cancel the license while the cable company's investment remains protected.

What are they going to do and who is going to repair the damage?

Usually the companies conveniently fail to mention that they will be performing construction on the premises and that the equipment and wiring installation will involve some damage to the property. It is absolutely essential for the agreement to provide that no installation or maintenance work, and no sales and marketing efforts may be conducted on the property except with the prior approval of the board. In addition, the agreement must provide that the cable company, at its own expense, will promptly and fully repair all damage to the premises caused by the work. This is the only way for the board to remain in control of what may occur and to make sure that the board does not incur unexpected maintenance costs. In addition, the board should be careful to remove from the agreement any promise on the part of the association to protect the cable company's equipment, prevent vandalism or theft of service, or to ensure payment by the unit owners. The board simply need not take on any such responsibilities to the cable companies.

Can the board permit access to the units?

The board has no power at all to grant any right of entry to the individual units. Therefore, the board must take care to ensure that the agreement is clear on this point. Of course, it would be most economical for the cable company to wire the entire premises all at once. However, only the unit owners can permit access to their units.

Do we have to grant exclusive rights?

The cable companies usually want an exclusive right to provide service in an effort to minimize their competition. There is no reason to grant this. Considering how rapidly the technologies are changing, the board would be foolish to limit its options. Perhaps a new company will come along that promises to provide superior services. Of course, the board should be free to permit others to have access (unless the association is being suitably compensated for exclusive rights).

Why do they want the board to agree that their equipment may be removed upon termination?

Because federal regulations have created certain rights in telecommunications providers to existing inside wiring, we believe many cable companies attempt to have associations waive these rights under the law. There is no benefit (and only a possible detriment) to the association by waiving any rights it may have under federal regulations.

What about bulk service agreements?

Some companies will agree to provide certain cable services to all of the unit owners at a significantly discounted rate, with the association paying for the basic service as a common expense. Whether or not this is lawful for your association depends on the law of your State and the provisions of your association's governing documents. We urge associations to obtain legal advice before entering into any bulk service agreements.

Far too many associations enter into long-term and oppressive agreements without first consulting an attorney. When there is a problem and they finally do seek the advice of an attorney, it is usually too late to help them because they have already signed away most of their rights into a binding agreement, or they are faced with expensive litigation in order to remedy the situation.

In conclusion, don't sign the easement agreements before calling the association's attorney.