A carrier wants to put a cell tower on our HOA common area. How should the board evaluate the lease offer?

By OurHOA · General information · Revised October 18, 2026

How an HOA board evaluates a cell tower lease offer on common area: who can sign in TX, FL and CO, lease terms to fix, taxes on the rent, and owner RF questions.

Part of the HOA board handbook: vendors, projects and upkeep.

The short answer

Do not sign the carrier's first draft, and do not reject it at the first meeting either. A tower or rooftop lease can bring in steady income for decades, but the paper is written by the tenant's lawyers and usually runs 20 years or more once renewals are counted. The board's job is to answer four questions in order: does the board have the authority to sign, or do owners have to vote; what does the lease actually commit the association to; what is the rent worth after tax; and what will owners worry about, mainly radio frequency exposure and the view. This guide walks through each one. Whether a community can lease common area at all, and the vote thresholds that apply to a sale, are covered in our guide on whether an HOA can sell or lease common area property. Statutes and governing documents vary, so treat this as education, not legal advice, and have an attorney review the final lease.

Find out whether the board can sign

Start with the declaration, then the state statute, and follow whichever is stricter. Several states give the association the power to lease common area by default. In Colorado, C.R.S. 38-33.3-302(1)(i) lets the association grant easements, leases, licenses and concessions through or over the common elements, subject to the declaration. A separate section, 38-33.3-312, requires 67 percent of the votes, or more if the declaration says so, to convey common elements or subject them to a security interest. That section does not mention leases, so ask counsel whether a long recorded ground lease would be treated as a conveyance. In Texas, Property Code 82.102(a)(10) gives a condominium association, acting through its board, the power to grant leases over common elements unless the declaration says otherwise. Chapter 204 gives similar board power to property owners' associations, but only in the large counties chapter 204 covers. Most other Texas HOAs look to their own declaration. In Florida, section 718.111(4) gives condominium associations the power to lease the common elements. Chapter 720 has no matching power for HOAs, and section 720.303(1) points back to the governing documents. If the documents require an owner vote for leases over a certain term, the 20-year tower lease almost always crosses it.

Lease terms the board should push back on

Read the draft against this list and mark every item the carrier must change or explain. Term: how long is the initial term, how many automatic renewals, and can the association ever end it, or only the tenant. Rent and escalator: a fixed annual increase in writing, not tied only to the tenant's discretion. Assignment: carriers often assign leases to tower companies, so require notice and keep the tenant's obligations attached to whoever takes over. Expansion and collocation: a clause letting the tenant add other carriers' equipment should come with additional rent. Access: hours, notice, which roads or paths crews may use, and who repairs damage to landscaping or paving. Insurance and indemnity: the tenant names the association as additional insured, with limits your broker approves. Removal: the tenant removes all equipment, including foundations, within a fixed number of days after the lease ends, backed by a bond. Utilities: a separate meter in the tenant's name. Taxes: the tenant pays any property tax tied to its improvements. Our guide on responding to a utility easement request covers a related set of access and restoration terms.

Run the numbers after tax

Gross rent is not what the association keeps. Most HOAs file IRS Form 1120-H. Under the IRS instructions, exempt function income means member dues, fees and assessments, and payments from nonmembers are not exempt function income. Taxable income on Form 1120-H is taxed at a flat 30 percent for condominium and residential real estate management associations. Say the offer is $1,500 a month, or $18,000 a year. If the association has few deductible expenses tied to the lease, a large share of that rent is taxed, and the board should budget for roughly $5,400 of federal tax on it before state tax or deductions. There is a second test. At least 60 percent of the association's gross income for the year must be exempt function income to file Form 1120-H at all, and at least 90 percent of expenditures must go to acquiring, building, managing, maintaining and caring for association property. A small community collecting $90,000 in dues stays well above 60 percent with $18,000 of rent, but a tiny one might not. Give the lease to the association's CPA before presenting figures to owners. Our guide on whether an HOA has to file a tax return covers the two filing options.

Answer the RF and zoning questions before owners ask

The first question at the owners' meeting will be about health. Federal law shapes the answer. Under 47 U.S.C. 332(c)(7)(B)(iv), a state or local government may not regulate the placement of personal wireless facilities on the basis of radio frequency emissions if the facilities comply with FCC rules. The exposure limits themselves are in 47 CFR 1.1310. That limit binds the city, not the association, so the board can still say no for any reason it likes. What it means in practice: ask the carrier for its RF compliance analysis for this site, in writing, and share it with owners. The carrier will also need local zoning approval, and its schedule depends on that. Once a tower exists, 47 U.S.C. 1455(a) requires state and local governments to approve requests to add or replace equipment that do not substantially change the tower's dimensions. The duty runs to governments, so the lease is where the association limits what the carrier can add to its own property.

Sample notice to owners

Owners should hear about the offer from the board before they see a survey crew. A paragraph the board can adapt: "The board has received an offer from [carrier] to lease about [size] of common area near [location] for a wireless facility. The proposed initial term is [years] years with [number] renewal options, at a starting rent of $[amount] per month increasing [percent] each year. After estimated federal income tax, the board projects net income of about $[amount] per year, which it proposes to place in [reserves or the operating budget]. The board has asked the association's attorney to review the lease and has requested the carrier's radio frequency compliance report, which will be posted on [date]. Owners may comment at the open board meeting on [date]. Under our declaration, this lease [does or does not] require an owner vote." Fill every bracket with real figures, and do not describe the rent as free money.

A workable timeline

Week 1: the president logs the offer and the board agrees not to sign anything, including a letter of intent, without a vote. Week 2: the board reads the declaration and statute on leases and sends the draft to the attorney and CPA. Weeks 3 to 6: the attorney returns a markup, the board's negotiator sends it to the carrier, and the board requests the RF report and a site plan. Week 6: notice to owners. Week 8: open board meeting for comments, followed by an owner vote if the documents require one. After approval, the board signs, records any memorandum of lease the attorney recommends, and adds the rent to the budget and the 1120-H workpapers. Some carriers or tower firms later offer a lump sum to buy out the remaining rent. Treat that as a new sale of a long-term asset, with a fresh attorney and CPA review and the same owner approval the original lease needed.

Mistakes boards make

Signing a letter of intent or option agreement at the first meeting because the carrier says the offer expires. Letting one director negotiate alone without a board vote on the final terms. Forgetting the removal clause, so the association inherits a concrete pad and a dead tower in 30 years. Accepting rent with no escalator. Ignoring the tax, then telling owners dues will drop by the full amount of the rent. Skipping the owner vote when the declaration requires one, which invites a challenge to the lease. Spending the rent on operating costs in year one with no plan for the years after a carrier leaves. The fix for all of them is the same: slow the process down to a few meetings, get the professional reviews, and put every decision in the minutes.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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