Considerations for Managing Agents, Landlords & Leaseholders when thinking about electric vehicle charging
In Taking charge: the electric vehicle infrastructure strategy, the government set out that sales of all new petrol and diesel cars and vans would end in 2030. Alongside Government plans to introduce targets for sales of clean vehicles from 2024, the public discourse on zero emission motoring has now firmly shifted from if it will happen, to when.
With considerable investment from both vehicle manufacturers and government in developing zero emission vehicles and a viable charging infrastructure, vehicle owners are also converting from petrol and diesel in a shift which not only provides a more environmentally friendly solution, but a more cost-effective means of travelling as the cost of fuel crisis continues to challenge household budgets.
There is little doubt that Electric Vehicle Charging will increasingly become an everyday expectation of leaseholders, and the source of many questions to landlords and managing agents on their policies, and strategies for implementation.
Many existing and older leases will not make provision for this relatively new technology and that each residential site will present individual logistical challenges that require bespoke solutions for both individuals and wider groups of residents. In addition to this, there is the question of cost – who pays for licenses to alter, installation and maintenance, and the actual and proportionate use of electricity.
Taking the lease as a common starting point, generally if a parking space is included within the demise of the property it may be possible install a charging unit in that parking space subject to the appropriate consent being granted by the freeholder. However, parking spaces often form part of the freeholder’s title or leases may restrict the construction of additional structures necessitating a licence for alteration before any charging unit can be built. In some situations, a lease may require variation to mitigate any potential breach of lease terms and to factor any new covenants or easements in relation to the installation.
A point to note is whether your leases contain an obligation on leaseholders to pay the building owners fees in relation to any consents or licences, variations to the lease or the potential cost of works.
Consideration should also be given to whether communal parking facilities would require engagement with all leaseholders, for example it may be advisable to initiate a section 20 notice and consultation process to outline the intention to install, the cost (service charge) implications and to garner resident feedback on both the individual and collective impacts of works proposed. A further issue, of potential considerable significance, is whether the works involved amount to an improvement. If they do, the lease will need careful perusal to ensure that improvements are recoverable via the service charge mechanism. If they are, both the decision to make the improvements and the associated costs should be rational and reasonable in order to ensure the costs can escape successful challenge . If they are not, the costs attributable to the improvements would stand as irrecoverable from lessees.
Given the inherent complexities of cost control, management and supply, a number of options can be considered: Where electrical supply connection is to a communal electric meter, consideration then has to be made as to how electricity will be paid for by the leaseholder.
Similarly, attaching EV’s to a leaseholder electrical supply brings practical considerations, and this will only work if the leaseholder has a car parking space close to their own electrical supply and if
Another option is for fully funded systems. Some installers will meet the upfront costs of installation and ongoing management. This will likely recoup costs through rental charges and separate charges to leaseholders for electricity usage. Unfortunately this may cost more or restrict choice in supply and ongoing services being added to the service charge.
An alternative option being widely discussed, is the option of establishing a pay as you go style system, as increasingly seen in many public and retail environments, which could be considered as a stand-alone or hybrid option alongside elements of the options addressed above.
Billing systems adopted will reflect the nature of the installation reflecting the options above. There is an emerging consensus that “cost vs control” will be a key factor, in that the more upfront capital cost is paid, the more control individuals will have over aspect such as supplier and technical integration – and notably – that any party involved in the billing of electricity in relation to electrical vehicle chargers comply with OFGEM’s rules and regulations as the supply of electricity is a licensable activity
In summary, it would be advisable to undertake initial research and scoping into the options available. Of course within the framework of technical, building and infrastructure requirements, providers, costs and billing, licenses and supply. Issues of lease review, potential variation, service charges, cost recovery and wider consultation requirements?