The future of vehicles is…almost here. “The US is the latest country to pass what’s become a critical EV [electric vehicle] tipping point: 5% of new car sales powered only by electricity. This threshold signals the start of mass EV adoption.1” EVs are poised to grow in popularity over the following years as people shift towards a more energy-conscious mindset. But, unlike the traditional cars that run on gas, EVs are powered by electricity — and charging stations are not easily accessible…yet. Not surprisingly, the popularity of electric vehicles has raised several challenges for property owners associations (POAs) including responsibility for and location of charging stations, maintenance, insurance, cost, and infrastructure to name a few. POAs should be preparing now for the EV future by developing strategies for charger construction/installation and the resulting policies that should be implemented along with such construction.
The implications for single family v. condominium communities are different. Most electric car owners own their own homes, and relatively few live in condos with shared parking areas, for now. One of the challenges an EV owner might face, as a member of a condominium association, is property parking type. Are there deeded or POA owned parking spaces? Why is this important? If the spaces are deeded, the cost of installation is typically borne by the unit owner. If the parking spaces are POA owned, then the POA may be responsible for all costs depending on whether those parking spaces are limited or general common elements.
Additionally, condominium associations must consider the long-term scalability of a charging network. Unfortunately, the infrastructure (physical or electrical) of some older condominium buildings may be prohibitive to improvements. Also, all buildings have a finite electrical capacity. This is even more of an issue in an older building; thus, network design, engineering and connectivity are all imperative.
A major challenge associated with installation of EV chargers, whether by an individual or the association, is cost. Installation, not including the equipment, billing for usage and maintenance, can be 70-80% of the cost. In addition, installing a charging station on common area/common element property will also require an adjustment to the POA’s insurance policy, which may come with a hefty price tag.
POAs have a host of restrictions that would require board approval for installation of a charging station on POA owned property. To date, some jurisdictions have passed “right to charge” laws – Florida, California, Colorado, Ontario, Oregon and New York. These laws are designed to prevent POA boards from stopping residents from installing charging stations.
Some of these challenges may not apply in the context of single-family communities where an EV owner has the option of using their own electrical outputs or installing an EV charger inside their garage. Either of these options are likely possible without architectural control committee (“ACC”) approval.
However, installation of a personal EV charger can also be costly.
There are many associations considering the idea of allowing the installation of EV charging stations, either on private lots, or as an amenity installed on a common area. Of course, since a POA is essentially self-governed, it would be prudent to create rules surrounding the use of the POA owned charging station.
Similar to any other policy or rules and regulations (collectively referred to as “policy”) related to a POA’s use restrictions, the practitioner should start by ensuring that the POA has the authority to promulgate and enforce rules and regulations governing the community. The POA should take care to specify what installation location is permitted, who will be responsible for maintenance and that all expenses will be the responsibility of the installing owner.
The policy should also require approval from the POA’s ACC. It is also recommended that the policy state specific items to be included in an owner’s application to the ACC.
It is imperative to include any required deposits or fees in the contents of the policy. There might be some after-installation considerations including providing the POA with a certificate of insurance, with a limit amount that covers the appliance and also names the POA as an insured if located within the common area/common element. Finally, the POA should include disclaimers and indemnification provisions where appropriate.
As the use of EVs continues to grow, now is the time for POAs to prepare for the future. By having policies in place today, POAs can have answers for residents on what is allowed, ensure the infrastructure of the community is protected and offer a roadmap to the legislature should a “right to charge” law be debated in Austin. POAs should contact their legal counsel to discuss drafting an EV policy and what further issues need to be addressed to prepare for the future.
1 Tom Randall, US Crosses the Electric Car Tipping Point for Mass Adoption, https://www.bloomberg.com/news/articles/2022-07-09/us-electric-car-sales-reach-key-milestone?utm_source=BenchmarkEmail&utm_campaign=Jul_19_2022_Email&utm_medium=email#xj4y7vzkg, Bloomberg, July 9, 2022.
Clint Brown is Shareholder and joined the firm’s real estate section in 2012. He currently leads the firm’s property owners association division with Sipra Boyd and Marc Markel. Mr. Brown represents community associations, developers, developer-controlled associations, and commercial associations throughout Texas and his practice area focuses on bankruptcy law, corporate law and all aspects of community association law.
Noelle G. Hicks is a Shareholder in the Property Owners Association Law Section of RMWBH. Noelle assists single-family residential, townhome, condominium, and some commercial associations with various aspects of property owners’ association law including the collection of delinquent assessments, complex deed restriction enforcement issues, developing and interpreting governing documents and drafting and reviewing contracts.
