This is the final article in our EV chargepoint series in which we look at the documents that may be required or may need amending on installation of an EV chargepoint. In Part one of the series, we looked at the regulation of EV chargepoints in the UK and in part two which looked at the practical considerations when installing an EV chargepoint.
Ultimately, it is the circumstances of the installation that will direct any amendments needed to existing property documentation or requirements for additional documentation, for example whether it is a new or existing development, who is paying for the installation and who will be responsible for running the chargepoint. Any amendments needed will also depend on what is set out in any existing documentation, for example, whether the area selected for the chargepoint to be located is within the tenants demise, is on land exclusively retained by the landlord, is part of the common areas or whether it is covered by any current service charge provisions.
Specific agreements may also need to be negotiated if the chargepoint is to be installed on an industrial or business park where electricity is shared with other companies in order to protect the amount of electricity needed by the business. If the electricity cables cross land owned by someone else, the landowner's permission will be required and a legal agreement (for example, an easement) may be needed to provide for the installation and maintenance of cables.
When installation is complete, further consideration should be given to the agreement of relevant leases with the provider of the chargepoint or electricity.
Lease clauses to consider
As discussed above, the inclusion of clauses will depend on the nature and extent of the premises demised. Clauses to consider are:
- Rent: The amount is best determined by an appropriately qualified surveyor, but the rent provisions could state that the rent is:
- An annual fixed sum; or
- A profit rent (where the landlord receives a fixed percentage of the net or gross profit of the chargepoint).
The tenant may also be required to pay transactional costs such as fees to the payment terminal provider and charging platform operator, operations and maintenance fees, and insurance. There could also be a requirement for the tenant to upgrade or replace the chargepoints after a certain number of years or where it is commercially prudent and economically viable for them to do so.
- Service charge: Calculation of the service charge in accordance with the square footage of the leased area is unlikely to be suitable where EV chargepoints are installed. Two alternative options are:
- The tenant is required to pay a fixed percentage of the total service charge costs for the site.
- The tenant is responsible for a fair and reasonable proportion as the landlord decides (or, if there is a dispute, for the landlord's surveyor to decide).
- Repair covenants: If appropriate, a requirement for the tenant to keep the premises in good, substantial and safe condition and repair to the standards required by the relevant legislation and regulations should be included.
There could also be a requirement for the tenant to upgrade or replace the chargepoints after a certain number of years or where it is commercially prudent and economically viable for them to do so.
- Reinstatement: The landlord should consider whether reinstatement will be required at expiry or early termination of the lease. This clause could exclude any equipment situated a certain level below ground.
- Additional costs: Specify who will be responsible for paying the costs in connection with the supply of electricity to or from the chargepoints.
- Insurance: Consider the extent to which this is included in the service charge. For example, the tenant could be liable for procuring insurance to operate the business and installing, operating and maintaining the equipment, and the landlord could be responsible for insuring the premises to the full reinstatement value.
Service charge provisions in residential leases
In existing residential leases, the landlord will need to consider whether the existing service charge provisions are broad enough to cover the costs of installation and maintenance of the chargepoints to the tenants. If they are, as the cost is likely to be over £250.00 per tenant, it is likely a section 20 notice will have to be served on the tenant. If the current provisions are not sufficient, the landlord may have to cover these costs him/herself.
Further, consideration needs to be given as to how the landlord will charge for the use of the chargepoint. For landlords with properties in city centres, it may be difficult to isolate the electricity used in charging individual cars that can then be billed to the appropriate tenants. Instead, most properties will find the cost of charging will fall to the whole building to be recouped in the service charge. This disadvantages residents who do not have EVs and do not use the chargepoints.
One solution is pay as you go offerings, similar to those being installed in public spaces, so that electricity used by individuals can be monitored, logged and paid for. Flat owners could then pay back these costs to the building on a monthly basis.
For any additional queries, or if you are looking to install an EV chargepoint and need advice, email Annie Long or your usual Howard Kennedy contact.
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