Electric vehicles are not as recent an invention as you might think - electric vehicles have evolved from as long ago as the 1800s. Through a series of breakthroughs, refinement by different manufacturers and designers, accompanied with socio-economic changes and public policies, electric vehicles have slowly through a span of 200 years, become the more popular choice compared to diesel vehicles.
It is projected by The Society of Motor Manufacturers and Traders (SMMT) that by the end of 2022, electric vehicles will outsell diesel vehicles[i].
It is encouraging to see how quickly buyers in the UK market are embracing the use of electric vehicles. For some this is due to seeing EVs as the latest trend or for lower running costs, but for many consumers this is coupled with environmental concerns and climate change issues that need attended to on a national level, as well as globally. Following the COP26 conference in Glasgow, we see nations joining to work towards zero emission globally by 2040, and by no later than 2035, in leading markets[ii].
My colleague, Rory Alexander shared his views on EV charger points from a planning perspective at a national and local level[iii]. I would like to share some thoughts arising from the increasing number of tenant clients coming to us with proposals to install EV charger points at car parks within let commercial buildings. There are a number of legal points to consider on such a proposed installation.
Firstly, bearing in mind that electric vehicles were still considered a niche market in the past few decades, our existing leases are not "EV-vehicle-ready". In a standard commercial lease, tenants normally have a non-exclusive right to take access and use a number of car parking spaces in a car park relative to a commercial building. Works carried out by a tenant are subject to the landlord’s approval, and with works being carried out in the premises exclusively let to a tenant, often the landlord will not be allowed to unreasonably withhold or delay its approval to non-structural works. But when the proposed works are EV charger points and these are not located in an area exclusively let to a tenant, the landlord will most likely have absolute discretion whether to withhold approval. The reasons for a refusal of consent could be down to considerations a landlord may have with regards the redevelopment, planning, management or access issues related to the building. There will be various valid practical considerations for a landlord in considering whether to permit one of their tenants to install EV chargers in a car park where other tenants have rights which may be impacted.
Assuming however that the landlord agrees in principle with the proposed works, this brings us to the consent documentation process in which legal advisers will prepare and agree a licence for works. As the car parks in commercial buildings are generally not let exclusively to the tenants, the formal documentation of consent to these works will involve the landlord granting additional rights to the tenant in order that the tenant and its contractors can take access and carry out installation works in the common car parking area.
A landlord's legal adviser might also consider that lease terms should be varied to grant the tenant the necessary additional rights to maintain the EV charge points in place and use them and repair them in the future. They might also want to add in provisions to deal with the additional utility costs involved in using the EV charger in this common area of the building. The landlord will also want to ensure there is an option to have these removed or left behind at lease expiry. A landlord might want to document this in a lease variation rather than a licence for works - or require that both documents are agreed and signed.
Another possible issue is that a complex lease structure in a commercial building could add to the length of time in parties agreeing the necessary consent to works - for example where the tenant occupies under a sub-lease and a head landlord also requires to be a party to the licence for works. The more complex a lease structure may mean more time will be spent on this legal work before commencement and completion of works.
Hand in hand with this previous point is the issue of costs. In terms of a tenant’s works in general, the tenant who proposes the works would pick up the legal and surveyor’s costs incurred by the landlord and any head landlord. The legal and surveyor's costs involved in agreeing a licence can add up to a significant amount - which unfortunately might even exceed installation costs.
It is my hope that commercial landlords will consider taking the initiative to install EV charger points in their car parks. However, spaces converted to EV charger points would also mean reducing spaces for fuel vehicles - as well as cycle racks - competing demands would need balanced. Tenants may also face increasing service charges to cover installation costs, but hopefully as the number of these vehicles increase and with the resulting environmental benefit, that would still be welcome change. Once installed, the building and availability of EV charger points would also be more attractive to prospective tenants.
The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Morton Fraser LLP accepts no responsibility for the content of any third party website to which this webpage refers. Morton Fraser LLP is authorised and regulated by the Financial Conduct Authority.