New Law Encourages Electric Vehicle Charging Stations at California Commercial Properties | Practical Law

New Law Encourages Electric Vehicle Charging Stations at California Commercial Properties | Practical Law

Under a new California law, commercial landlords are prohibited from entering into leases or other occupancy agreements that include an unreasonable restriction or prohibition on the installation or use of an electric vehicle charging station in a parking space associated with the commercial property.

New Law Encourages Electric Vehicle Charging Stations at California Commercial Properties

by Practical Law Real Estate
Published on 03 Mar 2015 • California
Under a new California law, commercial landlords are prohibited from entering into leases or other occupancy agreements that include an unreasonable restriction or prohibition on the installation or use of an electric vehicle charging station in a parking space associated with the commercial property.
Effective January 1, 2015, a new law precludes commercial landlords in California from unreasonably prohibiting or restricting the installation of electric vehicle charging stations (EV stations) in parking spaces associated with the commercial property. Section 1952.7 of the California Civil Code was enacted to encourage the use of EV stations, and renders void and unenforceable any provisions in a lease, lease agreement or other occupancy agreement that unreasonably restricts the installation and use of EV stations.
A commercial tenant may install the same number of EV stations at their leased property as allocated parking spaces it has under its lease. If a tenant has not been allocated any parking spaces under its lease, the number of EV stations allowed is determined by multiplying the total rentable square feet at the property by a fraction, the denominator of which is the total rentable square feet at the property and the numerator of which is the rentable square feet leased at the property by the tenant (Cal. Civ. Code § 1952.7(a)(3)).
Under this law:
  • A commercial landlord may impose a reasonable monthly fee for an unreserved parking space that a tenant uses for installation of an EV station (Cal. Civ. Code § 1952.7(a)(4)).
  • If the terms of the lease indicate that landlord approval is required for installation of an EV station, the landlord must return the approval or denial of the application in writing which may not be wilfully avoided or delayed (Cal. Civ. Code § 1952.7(e)).
  • A landlord may condition its approval of a tenant's EV station upon compliance with reasonable requirements, such as the tenant:
    • bearing all responsibility for the costs of installing the EV station and its infrastructure including the cost of permits, supervision and construction;
    • being responsible for any electrical usage, damage, maintenance, repair, removal or replacement of the EV station; or
    • providing proof of insurance within 14 days of the landlord's approval of the EV installation.
    (Cal. Civ. Code § 1952.7(f).)
This new law is meant to encourage EV station installation at commercial properties. It does not, however, require landlords to install or maintain EV stations at their properties at their expense. Nor does the law apply to a commercial property that:
  • Already has EV stations for use by tenants in a ratio equal to or greater than two stations for every 100 parking spaces.
  • Has fewer than 50 parking spaces.
(Cal. Civ. Code § 1952.7(b).)

Implications for Landlords

Commercial landlords should update their lease forms in response to this new legislation by including provisions that:
  • State the terms and conditions for EV station installation by a tenant or the landlord.
  • Set the maximum number of parking spaces that may be converted to EV stations and the monthly rate per space.
  • Designate particular areas of the parking facility for installation of the EV stations.
  • Give the landlord the right to relocate EV stations in the event of future development of the property.
  • Specify that any parking spaces used for EV stations are included in the total parking allocation for the tenant.
  • Confirm tenant obligations relating to the installation and removal of the EV station.
  • Update existing rules and regulations to include EV stations.

Implications for Tenants

Before installing EV stations at their leased properties, tenants should confirm the costs associated with installation and maintenance. Tenants should also consider how these new requirements may affect existing parking rights under the lease when negotiating parking provisions.