In this second blog in our series on sustainable real estate we discuss the legal challenges around one of the legislative developments following from the updated Energy Performance of Buildings Directive: the obligations for property owners and property developers regarding the implementation of an electric charging station infrastructure.
The revised Energy Performance of Buildings Directive (the Directive), as entered into force on 28 May 2024, aims to put Europe on track to achieve a fully decarbonised building stock by 2050. One of the topics addressed in this directive is the further roll-out of recharging points for electric vehicles in the buildings. Recharging in relation to buildings is considered particularly important since this is where electric vehicles park regularly and for long periods of time. The revised Directive requires member states to simplify, streamline and accelerate the procedure for the installation of recharging points, and remove barriers to the installation of recharging points in multi-apartment buildings. However, at this moment the installation of recharging points still involves several legal considerations that need to be taken into account. This blog post will explore some of these challenges.
Legal requirements
The Directive requires member states to set the targets regarding the number of recharging points to be present for car parks that are inside or physically adjacent to the building. The targets set by the Directive differentiate between residential and non-residential buildings and between new developments (or buildings subject to major renovation) and existing buildings. Under Dutch law, the following targets have been set:
- Firstly, since 1 January 2024, new non-residential buildings (or non-residential buildings subject to major renovation) with more than 10 parking spaces, must have at least 1 recharging point available. In addition, ducting needs to be installed for at least 1 in every 5 parking spaces. The Dutch legislation is less strict than the EU target at this point. The Directive that states that for parking facilities with more than 5 parking spaces, at least 1 recharging station per 5 car parking spaces (and for offices 1 recharging point per 2 car parking spaces) should be available, as well as pre-cabling for at least 50% of the parking spaces and ducting installed for the remaining car parking spaces.
- Secondly, from 1 January 2025, all non-residential buildings with more than 20 car parking spaces need to have at least 1 recharging point available per 10 car parking spaces. For the years 2025 and 2026, the Dutch legislation is stricter than the Directive requires. The Directive states that from 2027 only all non-residential buildings need at have least 1 recharging point available per 10 car parking spaces or ducting installed for at least 50% of the car park.
- Thirdly, since 1 January 2024 new residential buildings (and residential buildings subject to major renovation) with more than 10 car parking spaces, need to have ducting installed at each of the car parking spaces. The Dutch legislation is less strict than the EU target at this point. The Directive states that new residential buildings with more than 3 car parking spaces need to have at least 1e recharging point available, pre-cabling for at least 50% of the car parking spaced and ducting for the remaining car parking spaces.
As it stands, Dutch law is currently not yet fully aligned with the requirements of the Directive. The legislation effective per 1 January 2024 (as referenced above) was to implement the second recast of the Directive from 2018. It must therefore be expected that more strict regulations are imposed in the (near) future to also implement this third recast of the directive.
Enforcement action
No proactive reporting obligations as regards to the availability of recharging points exist under Dutch law. We expect that for new buildings, the number of charging points envisaged will be checked in case of a permit application. For both existing and future situations, enforcement will likely take place through checks or inspections (site visits) by public officials.
The requirements are typically enforced through public law. In practice, enforcement action usually includes an order under penalty payment. This order aim to have the violation ended within a mandatory grace period. The penalty payment is forfeited for the duration that the violation continues to exist after the grace period. There is no legal maximum, but the penalty payment amount should be effective and proportionate in relation to the violation.
In addition to the order, an administrative fine could be imposed by means of a punitive sanction. The amount of the fine should be determined based on the circumstances at hand and taking into account the principle of proportionality. Per 1 January 2024 the amount of the fine is capped at EUR 25,750 per incident.
Permit requirements
In principle no environmental permit is required for the installation of recharging points. However, for particular locations, permit requirements may apply (e.g. in protected nature areas and highways).
Property law
Recharging points can be installed by the property owner, but it could also be that the recharging points are installed by the tenant of the building or a third-party service provider. In these latter situations it is good to keep the strict Dutch law rules regarding accession in mind. Upon installation of the recharging points, this equipment will become part of the building and/or the land and ownership will transfer to the owner of the real property. To avoid loss of ownership, it is advisable to establish a right of superficies. Alternatively, parties could decide to enter into a contract addressing topics such as the allocation of building liability and/or the right (or obligations) to remove the charging points at the end of the term.
Regulatory laws
Recharging points require a grid connection with sufficient capacity. If sufficient capacity is available, the user of a building may (if preferred) enter into more than one power supply agreement per connection point based on the ‘multiple suppliers on one connection’ scheme. This scheme does however not apply in the event of different users, which is the case if, for example, the recharging points are installed and/or operated by a third-party service provider. Due to growing grid congestion issues in the Netherlands, having a new grid connection installed for a separate user may not be straightforward. Also, grid operators will charge a connection fee to cover the cost of the realisation of the grid connection point.
Also, under the Electricity Act any connection for the transport of electricity and the related facilities is considered to be a network, except if such connection is part of the installations of the consumer (in this case the consumer being the third-party operator of the charging point). If the third-party operator uses the grid connection of the property owner, questions can be raised on whether a network is created between the installation of the property owner and the installation of the third-party operator (i.e. the charging point). The risk of creating a network should be assessed on a case-by-case basis. Qualification of the connection as a network would entail several obligations and liabilities for the owner of the network, such as appointing a network operator, ensuring safety and access for third parties, and complying with other requirements of the Electricity Act.
Defect under the lease agreement?
In the market standard general terms and conditions for Dutch law lease agreements, the landlord is to ensure that leased building complies with applicable laws and regulations. Tenants could therefore claim that an insufficient number of charging points being present, qualifies as a legal defect under the lease. In general, legal defects commence to exist if enforcement action impacts the tenant. However, a defect may also exist if the tenant has an objectively justified expectation that the building complies with the minimum requirements for the number of available recharging points. Which expectations are justified can vary significantly depending on the specifics of each case. For example, the tenant’s expectations may be justified when renting a new building marketed as state of the art on sustainability aspects. However, the same tenant expectations may not be justified when renting a building for which the landlord has indicated that energy performance measures are still to be implemented. We note in this respect that the landlord is liable for legal defects irrespective of whether such defect is attributable to the landlord. In the event of a legal defect, the tenant may claim damages, rent reduction or termination of the lease. The landlord may avoid this risk by making clear to the tenant what the possibilities (or the lack thereof) are of installing recharging points prior to entering into the lease agreement.
Safety, Maintenance and Liability
If (additional) recharging points are installed at a leased property, the lease agreement should specify whether these recharging points are part of the leased property or not. This will firstly determine whether the tenant has the right to remove or modify the recharging points. The lease agreement should also define the obligations and liabilities of the landlord and the tenant with respect to the maintenance of the recharging points as well as regulate the allocation of liability between parties for any claims or damages arising from the use or the malfunction of the recharging points. In this respect it is also important to check if the recharging point is (sufficiently) covered under the property insurance and/or impacts the fire insurance of the building.
Conclusion
Recharging points for electric vehicles are becoming an essential feature of modern and sustainable properties in the Netherlands, as well as a legal obligation for certain types of buildings. Property owners and developers should be aware of the legal challenges and opportunities that recharging points entail and should seek professional advice and guidance to ensure compliance and optimisation of their investments.
What’s up next?
Stay tuned for our next post, where we will discuss the latest on green leases. Green leases are agreements that incorporate environmental or social performance requirements and goals for both landlords and tenants. We will explain the benefits of green leases for both parties, the topics that can be included in a green lease, the provisions on sustainability included in the model agreement created by the Council for Real Estate (Raad voor Onroerende Zaken) and the difference between light green and dark green clauses.
