Electric vehicles are becoming an increasingly common sight on our roads. As EV ownership increases, so too must the availability of EV charging points ("EVCPs") to keep up with demand.
Retail and office car parks offer hugely convenient charging locations for EV owners allowing shoppers and staff to charge their vehicles whilst going about their day. As a result, many shoppers and tenants are looking to landlords to make EVCPs available; and many landlords are now rising to that challenge as part of their own ESG credentials.
Many landlords will choose to install their own EVCPs but in a retail context, where customer demand is far greater, landlords are increasingly seeking to enter into leases with specialist EVCP operators allowing the operators to take on the responsibility for operating the EVCPs directly.
Here are the top 5 considerations that commercial landlords should have in mind when considering the installation of EVCPs.
Existing Leases
Where EVCPs are being installed within established developments, do the existing leases contain any restrictions on the installation of EVCPs?
Many retail leases will prescribe a minimum number of car parking spaces for customers and many retail tenants often benefit from "no-build zones" in retail car parks. Tenants also often benefit from the right to use and occupy specified parking spaces which can restrict development opportunities.
Where spaces are being let to an EVCP operator, do the existing leases allow for the common parts to be varied to allow for this?
Landlords should check the terms of their existing leases for any potential restrictions and to confirm whether any tenant consents might be required. The time and cost implications of obtaining these consents should be factored into any future development proposals.
Repair and Maintenance
Who will be responsible for maintaining and repairing the EVCPs?
As EVCP technology continues to evolve, the costs of servicing, upgrading and replacing EVCPs should be considered. Where spaces are being let to an EVCP operator, these costs will be borne by them under their lease.
In some cases, it might be appropriate for landlords to include EVCPs within the common parts and recover these costs via the service charge. The extent to which these costs can be passed on to the tenants will depend on the terms of the leases and any existing service charge caps. Landlords should work closely with their lawyers and managing agents to ensure the correct obligations are captured, particularly in established developments.
Charging Costs
How will the costs of charging be met?
Ultimately the end user should pay for what they use. Where spaces are being let to EVCP operators, this is a matter for the EVCP operator and the end user.
Thought should be given as to how the costs of charging will be met in practice to ensure the landlord isn’t left out of pocket. EVCP technology is new and complex and there are a variety of different EVCP systems available on the market each with different payment technologies.
The position is perhaps quite simple where EVCPs are being used exclusively by certain tenants. Where EVCPs are available for general use, how will the landlord keep of track of which tenant is making use of the EVCPs? Most EVCPs require users to pay-as-they-go but some EVCPs may require separate metering to be installed within the landlord's property. Ultimately, the position will depend on the type of EVCP being used.
Landlords and their managing agents should carefully consider the type of EVCP being installed to ensure that the charging costs can be monitored and attributed to the relevant users. The key points for landlords is to ensure that (i) their leases allow them to recover the costs of any electricity used, and (ii) appropriate collection measures are in place.
Third Party Consents
Are any third party consents required?
Once EVCPs are installed they'll need to be powered up via a grid connection. EVCP operators will likely take on the responsibility of securing their own grid connection but landlords should consider whether a grid connection can be secured within the landlord's property or whether additional servitude rights might be required over neighbouring land. A review of the title is prudent.
Securing the cooperation of third parties can be a costly and time consuming exercise and this should be factored into any future development proposals and avoided where practicable to do so.
EVCP Leases
As always, the commercial terms of a lease are subject to agreement between the parties but most EVCP operators will have a bespoke style of lease which reflects their operating model.
Commercial terms aside, what are some of the key terms that landlords should consider?
Service Charge: to what extent should the EVCP operator contribute to towards the service charge? What services will they benefit from and which part of the common parts will they need to use to operate the EVCPs?
Relocation: are “lift and shift” provisions required to allow the EVCPs to be relocated in the event the landlord wants to redevelop their property?
Expiry: should the EVCP operator be obliged to remove the EVCPs at lease expiry or should those remain in place allowing the landlord or another EVCP operator to make use of those in the future?
Key takeaway
There's lots to consider when installing EVCPs and giving early thought to these considerations will help to ensure that the journey to EV charging is as smooth as possible. If you are considering installing EVCPs, seeking early advice from your solicitors will help you to identify and resolve any potential bumps in the road.
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Legal Director
