Answer
Apr 14, 2016 - 04:17 AM
Typically, we advise landowners that enter into ground leases for towers to include language that requires that the tower is removed at the expiration of the lease. This includes removal of the foundation to a minimum of 3' below grade.
However, some landowners question what will happen if the tower owner is no longer in business or has gone bankrupt. Who will remove the tower then? Some leases are structured with a cell tower removal bond that requires that the tower company acquire a bond that essentially insures that there will be cash available to remove the tower at the expiration or earlier termination of the ground lease if the tower owner is not around to do the work themselves.
The issues with tower removal bonds are that the tower companies don't like to issue them because in essence they have to pay now for the removal of the tower later. Bonds aren't like insurance in that the smaller the tower company the larger the risk that they won't be around to pay for the removal and the higher the probability that the bond will actually end up being used.
However, some landowners question what will happen if the tower owner is no longer in business or has gone bankrupt. Who will remove the tower then? Some leases are structured with a cell tower removal bond that requires that the tower company acquire a bond that essentially insures that there will be cash available to remove the tower at the expiration or earlier termination of the ground lease if the tower owner is not around to do the work themselves.
The issues with tower removal bonds are that the tower companies don't like to issue them because in essence they have to pay now for the removal of the tower later. Bonds aren't like insurance in that the smaller the tower company the larger the risk that they won't be around to pay for the removal and the higher the probability that the bond will actually end up being used.
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