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The Electric Vehicle Revolution: Charging Into New Territory Regarding Property Owner Liability

Fans of electric vehicles (“EV”) are in a buzz surrounding the launch of Tesla’s Model 3, tentatively set for July 2017. Industry analysts estimate that Tesla has 400,000 reservations for its hotly-anticipated entry-level EV, with the lion’s share of those reservations belonging to California residents. The Model 3 represents the first mass-market EV that is powered solely through batteries incorporated into the vehicle. As such, electric charging stations will become a necessity for owners of these EVs, as well as owners of Tesla’s Model S and Model X. Charging stations are a common sight at commercial parking structures, businesses, and workplaces. However, the United States Department of Energy’s Office of Energy Efficiency and Renewable Energy noted that a top concern of employers offering charging stations is the potential liability exposure arising from that amenity. The focus of this article is to discuss the pitfalls that property owners face as EVs move away from being a niche product and into the mass-market. An inevitable consequence of that phenomenon will be the installation, maintenance, repair, and use of charging stations in residential developments – where charging stations are currently a rare sight.

The State of California has fully embraced the EV phenomenon and has enacted laws mandating the installation of charging stations at a variety of locations. Civil Code § 1947.6 requires that for all residential leases signed, renewed or extended on or after July 1, 2015, the property owner cannot deny the tenant’s written request to install a charging station, subject to certain requirements. Civil Code § 1952.7 requires that for all commercial leases signed, renewed or extended on or after January 1, 2015, the property owner cannot deny the tenant’s written request to install a charging station, subject to certain requirements. Civil Code § 4745(a) renders void and unenforceable any restriction that prohibits or restricts the installation or use of charging stations in a common interest developments. Furthermore, California Assembly Member Chris Holden (District 41) introduced AB No. 1239 during the 2017-2018 Regular Session of the California Legislature. Among other things, AB No. 1239 would require that:

  • In proposing and adopting mandatory building standards, the Department of Housing and Community Development and California Building Standards Commission shall research, develop, and propose building standards regarding electric vehicle capable parking spaces that require existing multifamily housing and parking structures to meet building standard codes, regarding electric vehicle capable parking spaces during any additions, significant repairs, or alterations involving existing parking areas;
  • The California Building Standards Commission shall research, develop, and propose mandatory building standards regarding electric vehicle capable parking spaces for commercial buildings in the next triennial edition of the California Building Standards Code (Title 24 of the California Code of Regulations) adopted after January 1, 2018; and
  • In proposing and adopting mandatory building standards, the Department of Housing and Community Development and California Building Standards Commission shall consider revising electric vehicle capable building standards every 18 months.

If AB No. 1239 is passed in its current form, and we have no reason to believe that it will be substantially changed prior to final passage, California’s mandatory building standards will incorporate charging stations as the norm, and property owners should be prepared to consider the liability issues appurtenant to the installation, maintenance, repair, and use of charging stations.

EV charging stations are complex and technologically advanced products that carry large amounts of electrical current. Although tort liability case decisions related to the installation, maintenance, repair, and use of charging stations are in their infancy, the proliferation of charging stations will no doubt create circumstances that will affect the liability of property owners. Existing California case decisions provide guidance for the uncharted area of law relating to property owner liability as it pertains to charging stations installed by the property owner as an amenity, or by a tenant. Beginning with property owner installed charging stations, it appears that courts would deem the charging station as a nonessential amenity, and as such, subject to a waiver by tenants related to its usage. Lewis Operating Corp. v. Superior Court (2011) 200 Cal.App.4th 940 is instructive, as it involved the enforceability of waivers of liability related to a tenant’s usage of a treadmill in the fitness center. Lewis Operating Corp. held that although California law is clear that waivers of liability are void and unenforceable in residential rental agreements, non-essential amenities such as fitness centers do not fall within the class of items where such waivers are barred. Therefore, property owners are well-served by the inclusion of waiver of liability provisions in rental agreements pertaining to the use of charging stations located on their property.

An obvious solution to avoiding liability related to charging stations is to bar them from the premises entirely, but as noted above, property owners cannot prohibit the installation of charging stations on their property when certain requirements are met. Irrespective of the inclusion of waiver of liability provisions in rental agreements, property owners retain certain non-delegable duties for tenant-installed charging stations.

  • In Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, the Court of Appeals held that although it was not disputed that the property owner had no actual knowledge of the dangerous condition, that in and of itself was not sufficient to warrant summary judgment, because the plaintiff could have introduced testimony or evidence that a preliminary, reasonable inspection would have revealed the defective or unsafe condition.
  • In Alcaraz v. Vece (1997) 14 Cal.4th 1149, the California’s Supreme Court held that where a property owner is aware that a dangerous condition arises from land or fixtures owned by someone else, and is aware that his or her tenants or other third parties may be harmed, there is a duty to rectify the dangerous condition to prevent injury. As applied to charging stations, property owners should take all reasonable actions to ensure that the installation, maintenance, repair, and use of a tenant-installed charging station does not present a dangerous condition to tenants and third parties.

These case decisions, among others, will likely form the foundation for a case of first impression addressing property owners’ tort liability arising from a charging station located on their property. In sum, property owners face uncertain liability exposure arising from the mass-market adoption of EVs and the supporting infrastructure, including charging stations, and therefore should ensure that their written agreements and inspection procedures are updated accordingly.

Blog by: Jimmy Ly, Associate, San Francisco

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