Thinking of installing EV charging stations – Legal considerations for commercial landlords

According to the latest data, more than 840,000 fully electric cars and a further 520,000 plug-in hybrids are now on UK roads – and the number is increasing rapidly.

As more drivers go green, the demand for electric vehicle (EV) charging points has made them a notable feature in locations like retail parks, hospital car parks, and various commercial premises.

Their increasing prominence is a testament to the burgeoning shift towards electric motoring and reflects the demand for EV infrastructure.

As the EV landscape transforms, a multitude of EV charging point providers have emerged. Their primary responsibility lies in operating these charging stations.

They take charge of installation, maintenance, connection to electricity grids, and even the management of driver payments.

However, in instances where charging is offered as a free service to visitors, these providers often bill the landlords in return for the potential higher footfall that comes from the draw of having free charging on-site.

Leasing your property to EV charging providers

If you intend to provide space within your commercial property site for EV providers it is important to have a clear lease that lays out the obligations and expectations of each party.

To harmonise the requirements of both landlords and EV charging point operators, it is paramount to draft leases that contemplate the present and prospective needs of both parties.

Standard features in these negotiations encompass:

These should all form part of the negotiation process before the signing of a lease, to ensure that your interests are protected.

Given the hefty infrastructure expenses involved in setting up an EV station, operators tend to lean towards lease durations spanning 10 to 20 years.

Naturally, operating revenues are tethered to variables such as usage, electricity supply, and its pricing (and are likely to be subject to change in future).

It would seem more appropriate for landlords to anticipate a performance rent, which is determined based on the EV operator’s net profit garnered from the EV station. However, this can differ from one location and provider to the next and must be determined during negotiations.

Incorporating flexibility into leases

As EV adoption advances, operators might necessitate additional parking spaces. Conversely, landlords might entertain the thought of relocating the EV station within the car park.

Thus, leases must delineate whether such relocations would incur costs for the landlord and if they entail a rent-free interval during the EV station’s downtime.

Leases should also enshrine provisions that allow operators to terminate them under certain conditions, such as diminished traffic due to external factors.

Provisions for equipment removal post-lease termination, possible purchase of said equipment by landlords, and associated decommissioning expenses should also be integrated.

Beyond these points, providers are likely to want exclusivity within a site. Therefore, it’s imperative for leases to allow EV operators the ability to modernise their equipment, enhance power supply capacity, and even revamp the EV station’s design to remain competitive.

The dynamism of the EV market necessitates that both parties embed ample flexibility in their negotiated lease terms.

If you have been approached by an EV charging station operator or would like to entertain offers from those looking to develop your commercial property, speak to us for lease advice.

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