240: Top tips for leasing land for electric vehicle charging points
The UK Government has announced a ban on the sale of new petrol and diesel cars from 2030 and by 2050, to try and target every vehicle having zero emissions.
Electric vehicles are becoming increasingly popular, so existing infrastructure is having to be upgraded to enable charging. Public and private charging facilities are having to be increased to ensure that the UK market can grow in line with the Government’s expectations.
There are currently two charging point models:
- Stand-alone installations where the land is leased or owned directly by the charging point provider; and
- Charging points are installed by the charging point provider under a licence arrangement on land owned or leased by third parties (for example, in supermarket, pub or service station car parks).
There are several points to take into account when faced with an electric vehicle charging point proposal:
- Profit arrangement: Where a charging point lease is granted, the landlord will need to consider how to monetize the charging points. For example, will the customer be charged on a pay-per-use basis or will they have free to use charging points (with a lower powered charger) to encourage customers to stay longer on site?
- Length of term: Generally, electric charging point leases are granted for terms of 10-15 years with either fixed rent or turnover rent (calculated on the turnover generated by the charging point). Where you are a leaseholder (rather than a freeholder, for example, a shopping centre tenant), you should consider if you have sufficient term remaining in your lease to grant the arrangement for the charging points to the provider. You should also consider whether landlord consent is required to put the arrangement in place.
- Combining with other technology and allowing for updates: Where development works are involved, developers may want to combine the car charging points with other technologies to maximise potential revenue streams (for example, locating them together with solar panels or battery storage facilities). As the technology develops, existing charging installations may need to be updated. The legal documents will therefore need to enable the electric provider to undertake upgrade works. A landlord will be particularly keen that the facilities on site do not become outdated as power capacity increases but will also want a degree of control over alterations. A licence to alter from the landlord is likely to be required.
- Capacity of existing supply: Developers may need to pay for reinforcement works to achieve connections with higher capacity where the location is only suitable for a small number of charging points. Sometimes substation leases will be required for the construction of additional substations to provide sufficient capacity for the charging points. You will need to ensure substation leases also contain “lift and shift” provisions allowing the substation to be moved in the event of redevelopment of the land on which the substation is located. Generally, substation providers tend to want leases with a term of 99 years, and if you are a leaseholder, you will need to ensure sufficient term is left in your lease.
- Reservation for future development work: You are likely to want to reserve the opportunity to carry out further development work at your site or otherwise temporarily suspend the use of the charging facilities while development is carried out. The operator will need to ensure they recover their costs and is unlikely to agree to relocation within 2-3 years of the charging points first being installed. They may also want reimbursement from the landlord if the charging facilities are unusable. You should therefore consider the location of the spaces and manage the risk of potential redevelopment or temporary suspension causing a problem later down the line.
- Wayleaves and easements: These are not often required as the charging points are likely to be located near to existing grid connections where the site is a car park, service station or business premises.
- Licences to alter and underlet: Where you are a leaseholder, you will need to consider whether landlord consent is required for alterations and the underletting of the charging point itself. If the charging point is to sit outside of your lease term, then additional rights for access and maintenance may be required, along with an obligation to repair.
- Reinstatement at end of lease term: The substation lease/licence will need to include clear provisions as to who will reinstate at the end of the term, how the rent is to be reviewed, whether equipment is insured, and security of tenure.
Planning issues for charging points
There are also planning points to take into consideration where electric car charging points are being discussed.
The Town and Country Planning Order 2011 introduced permitted development rights for EV charging points on public and private car parks. Planning permission may be required for charging points installed elsewhere.
Local authorities are now introducing an obligation on developers to include EV charging points on new developments and the Government’s strategy has made clear the intention to make it an obligation to include charging point infrastructure in all new homes.
From 2025, the Government is proposing a requirement of at least one charging point in existing non-residential buildings with more than 20 car parking spaces.
Planning permission is not currently required for installing wall-mounted electric vehicle charging points in areas lawfully used for off-street parking, provided the outlet does not exceed 0.2 cubic metres and is not within 2 metres of a public highway. It is also not required for upstand outlets not exceeding 1.6 metres in height.
Please get in touch with your usual BDB Pitmans’ contact if you require legal advice on charging point leases.