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With the government’s strategy to end the sale of new petrol and diesel cars by 2030, it estimates that there will be a need for around 300,000 public charging points (as a minimum) for the charging of electric vehicles. In response to this, there has been an increase in the installation of electric vehicle charging units in car parks, service stations, retail parks and any other ‘spare’ land suitable for a car park, which is good news for electric car owners, but also good news for land owners seeking to capitalise on this rising demand as a means to extract value from their landholdings, whether in the form of an additional income stream, driving up footfall on retail or other shopping outlets or for residential buildings, improving saleability by providing an additional amenity for residents. In all cases, it will also help improve the ‘green’ credentials of the landowner, and potentially attract more environmentally conscious tenants and customers.
Wendy Martin, Legal Director at Ellisons Solicitors, discusses what landowners should be considering when installing electric vehicle charging units, and why the structure of the provision needs to be considered carefully at the outset.
Do you want to install and operate the charging points? This is challenging without the necessary technical skills, but there are specialist suppliers and contractors who can assist with the installation and ongoing maintenance and operation.
A landlord may be approached by their tenant who wishes to install charging units within their car park or spare land. This would usually require the landowners’ consent for the works and any subletting to a charging operator.
The most common option is to lease the land to an EV charging operator. There are a few of these, and no doubt competition in this section will only increase, but a landowner will need to research which operator would suit them and their landholding.
Where the decision is made to sublet space or contract with an EV charging operator there are several issues to be considered:
Substations
Is there sufficient power available on site for the operation of the charging points? If not, it may necessitate the installation of a new electricity substation near the site. This will require a separate lease to the local distribution network operator with associated cabling easements and land for the substation. Regardless of whether a new substation is required, where the power is coming in from does need to be considered and necessary easements and wayleaves entered into, particularly where such cabling runs over a third parties’ land.
Lease terms
Many EV operators require a lease of 25 years or more to ensure they can recover their initial investment. Whether the operator is given protection under the Landlord and Tenant Act 1954 is a key consideration, particularly where future development of the site may be contemplated and ‘lift and shift’ provisions are required.
Rental values will be a point of negotiation between the parties. Many operators work on a profit sharing basis, although a landlord may prefer some form of fixed rent, eg. per charging station, subject to the usual open market or RPI review.
Landlord’s will want to ensure that the operator is responsible for keeping the parking spaces and charging units in good repair and condition throughout the term of the lease/agreement. What happens at the end of the term also needs consideration and whether the charging operator will be required to reinstate and remove the charging units. This could be an expensive exercise and the landowner may wish to consider some form of security from the charging operator to cover these costs, which could take the form of a bond or retention.
The operator will require rights of way over the estate roads to access the charging units, but this must be qualified with a requirement to ensure that the estate roads are kept clear, to avoid any obstructions on the estate roads for other users, and the operator contributes to any repair and maintenance of such roads.
Consents
Third party consents may be needed before a lease for EV charging units can be granted. For instance, the consent of a local distribution network operator for the substation and grid connections, consent of superior landlords or lenders to the letting and/or consent from adjoining or neighbouring landowners if easements or wayleaves are required. A landowner will want to ensure that they have the benefit of these consents, as well as the charging operator, so they can be utilised by the landowner on future charging stations, should they decide to contract with a different operator. Consideration also needs to be given to whether planning consent is required from the local authority. The landowner may decide this is something the operator needs to obtain.
Exclusivity
The charging operator may require exclusivity for a period of time or in relation to a particular site. This needs careful consideration where a landowner has a large car park or several sites nearby, where there may be existing EV charging units installed, and also where issues of competition law may impact. It’s worth considering whether the exclusivity should be limited to a particular type/voltage of charger, or to a specific time period.
This is a small selection of the many issues that need to be considered by any landowner and/or landlord when navigating the installation of electric vehicle charging units. Each site and installation will need to be considered on an individual basis and should not be entered into lightly, but where implemented correctly could be beneficial to all parties involved. It shows commitment to being more environmentally responsible which in turn should attract more environmentally conscious tenants and businesses.
If you are a landlord or tenant considering whether to install electric vehicle charging units get in touch with Wendy to discuss this by emailing wendy.martin@ellisonssolicitors.com
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