HCBA Lawyer Magazine Vol. 28, No. 4 | Page 44

ev Charging stations: CoMMerCial lease Considerations
Real Property Probate & Trust Section
Chairs: Kristin Morris – Shutts & Bowen & Anthony Diecidue – Genders Alvarez Diecidue
A
ccording to the U.S.
Department of Energy,
there were 47,011
electric vehicle (EV)
charging stations in the United
States as of January 5, 2018. With
experts predicting that EV sales
will outpace sales of gas-powered
cars by 2040, the expansion of EV
charging infrastructure will keep
pace accordingly. All those new
charging stations will sit on real
property, and many will be a part
of commercial real estate projects.
EV charging stations — commonly
known as “EV supply equipment”
or EVSE — present both new and
familiar challenges to commercial
landlords and tenants alike.
It is important for attorneys
confronting EVSE issues to be
familiar with some basic
terminology. EVSE generally
comes in Levels 1, 2, and 3. Level
1 looks like a short extension cord,
plugs into a standard 120-volt
outlet, and can charge most EVs
overnight. Level 2 requires a
dedicated circuit with a 240-volt
outlet, and charges in about four
to six hours. The current state-of-
the-art — Level 3 or “DC fast
charging” — typically uses direct
current and can give most EV
batteries an 80 percent charge in
around 30 minutes.
EVSE arises in two leasing
situations: where a tenant is leasing
real property solely for the purpose
42
While many
of installing
EVSE companies
EVSE, and
are providing
where EVSE is
low-cost or even
an ancillary part
free charges for
of a traditional
now, others are
commercial
developing local,
lease, akin to
regional, and
an alteration.
national charging
This brief
networks. Many
article focuses
Level 3 chargers
on the former.
include small
Leases
LED screens
involving only
that are potential
EVSE are
ev charging stations
sources of
becoming
advertising
more common
present both new and
revenue.
as property
familiar
challenges
to
Experienced
owners,
EVSE tenants
particularly in
commercial landlords
can take
the hospitality
and tenants alike.
advantage of
and retail
unwitting
industries,
landlords by
realize their
keeping revenue
customers view
sharing provisions out of the lease.
charging stations as a necessary
Two trends will affect the future
amenity. Certain public-private
of EVSE in unknown ways:
partnerships, such as parking
regulation and technology. In
garages and toll plazas, may also
California, commercial landlords
involve a subtenant that installs
are prohibited from denying a
and maintains EVSE.
tenant’s requests to install EVSE.
Leases for EVSE differ from
As EV adoption increases,
traditional leases in these respects.
attorneys should expect regulations
First, landlords often attempt
to increase. Attorneys should
to treat EVSE companies as
also be mindful of impacts on
licensees, though the clear
EVSE and real estate. Finally,
possessory rights that such tenants
technological evolutions will likely
need to operate makes a license
affect leases because of changes
a risky move for both parties.
in electricity and space utilization
Second, the tenant frequently pays
by EVSE, requiring landlords,
no base rent and limited, if any,
tenants, and
pass-throughs, such as operating
their attorneys
expenses, insurance, and taxes.
to respond
Third, the small size and the
creatively.
nature of the leased premises
alters the traditional division of
rights and obligations between
landlords and tenant.
Author:
Savvy landlords will make sure
Tyler J. Hudson
they understand how the EVSE
– Holland &
tenant plans to make money.
Knight LLP
© Can Stock Photo / finallast
MAR - APR 2018
|
HCBA LAWYER