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Electric vehicles: think before charging ahead

Posted: 29/03/2021

With the Government recently announcing that the ban on the sale of new petrol and diesel cars and vans is being brought forward from 2040 to 2030, electric vehicle charging station companies have seen a surge in enquiries from both land owners and tenants looking to get ahead of the curve and install rapid chargers on their properties.

It is widely accepted that if electric vehicles are to become the standard, the charging infrastructure across the UK needs significant improvement. In order to meet the expected demand, real estate owners and occupiers are keen to future-proof their properties and EV infrastructure companies want to capitalise on early opportunities to obtain the best locations.

The rollout of electric charging infrastructure to date has been relatively slow and coverage gaps mean that the needs of a growing user base are not currently met. The charging solutions needed will vary depending on the property type; a business park owner looking to provide charging points for its tenants will have different considerations to a drive-thru unit tenant looking to incorporate charging facilities within its existing parking spaces. From a user perspective, long-distance drivers need to know there are sufficient rapid charging points available to meet their needs and drivers whose housing arrangements would prohibit them from having a connecter installed at home need convenient and cost-effective options.

Encouragingly, with growth in global sales of electric cars and an increasing shift towards sustainable living, there is finally impetus for the installation of EV charging stations across a range of locations and portfolios.

Title, planning, insurance and legislation

A careful check of title and letting documents is needed. Consider existing title restrictions/covenants to ensure that your ability to install the charging points and to charge for the consumption of electricity is not prohibited/restricted. Questions to consider include:

  • Do you have all necessary rights to install the charging points, associated cabling and equipment?
  • Is the installation area demised to a tenant or is it a common part? If the latter, are you able to alter the extent of the common parts? Are you able to reduce the number of spaces available to tenants and their visitors? Can you close the common parts to carry out works?
  • If the property is subject to occupational leases, will the availability of charging points impact future rent reviews? Seek a surveyor’s advice where necessary.
  • Will a wayleave be required for cable routes connecting the charging points to mains electricity?

Also identify what consents are required. If the property is leasehold, is the superior landlord’s consent needed to install charging points? What about the bank’s consent if the property is mortgaged? Is consent from the distribution network operator needed? Also remember to check permitted development rights and their associated conditions/limitations. If these cannot be met, express planning permission will be required.

Remember that charging points need to comply with the Alternative Fuels Infrastructure Regulations 2017 (these establish a common set of standards for publicly accessible charging points).

What about existing insurance arrangements? Does the charging point installation affect the building insurance policy/any third-party liability cover in place?

Dovetailing your documentation

Read documentation carefully and ensure you can grant the rights you are being asked to and can comply with your obligations. EV infrastructure companies want their standard form lease adopted across all of their sites, but understandably the requirements of a charging station lease are different to a normal occupational tenancy or business lease. The rights needed to operate these charging points can easily clash with existing tenancies and rights.

Maintenance and cost issues

Who will be paying for the installation and maintenance of the charging points? Are you able to recharge these costs to the tenants through the service charge? Who will pay for infrastructure upgrades as technology advances?

Consider how users will be charged for the use of the charging points. Who will benefit from the charges collected? Will they be offset against the service charge or retained by the landowner?

Government assistance may be available to help offset costs (see EV charging infrastructure). The prime minister’s 10-point plan for a green industrial revolution pledged investment of £1.3 billion in charging infrastructure over the next four years, so watch this space.

Electricity supply

Is the current electricity capacity to the property sufficient for both the occupier’s needs and to run the charging points? If additional infrastructure is needed, who will pay for these costs and are they recoverable through the service charge?

Also, who will supply electricity to the charging points? If the landlord supplies the electricity themselves, bear in mind that there are licensing requirements which could increase the cost/complexity of the installation.

Usage rights

Establish who will have rights to use the electric charging points, ie will it only be the tenants of the building/estate (and their customers) or will it include the general public?

Security of tenure

Where it is an EV infrastructure company installing, operating and maintaining the charging points, consider the structure of the arrangements to ensure security of tenure issues are properly addressed.

With the current pace of change and the accelerated transition from petrol and diesel vehicles, there’s an opportunity for real estate owners and occupiers to grasp by putting in place the infrastructure to make long-lasting, sustainable changes to their properties. Embracing this rollout early will support jobs and accelerate the UK’s path to net zero.

This article was published in Estates Gazette in March 2021.   

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Penningtons Manches Cooper LLP