I. New Year, New EV Law
Lawmakers recently passed Senate Bill 1016, which is a clear statement by the California Legislature that it wants more electric vehicles (“EVs”) on the road. The new law went into effect on January 1, 2019, prohibiting common interest developments (“CIDs”) – which include condo projects, planned developments, stock co-ops, and community apartment projects – from effectively prohibiting or “unreasonably restricting” the installation or use of electric meters used in connection with EV charging stations (“EV Meters”).
You may be asking yourself, “I know about the EV charging station laws. What’s so special about this new law?”
The answer is that the legislation’s author believed that the existing law, found at California Civil Code § 4745 (“Section 4745”), while covering the installation and operation of EV charging stations, did not specifically extend its protections to EV Meters, which are a necessary additional piece of equipment for a efficiently-functioning EV charging station. In addition, the law’s proponents believed existing insurance requirements, described below, were onerous and should be abolished due to the lack of available options in the insurance market, which was an obstacle to the installation of EV charging stations.
Thus, this new law amends Section 4745 and adds a new Civil Code section by specifically extending the protections concerning EV charging stations to EV Meters and creating new benefits for owners – and additional oversight obligations for CID boards.
II. Existing Law
Existing law voids any part of a CID’s governing document that prohibits or unreasonably restricts the installation or use of an EV charging station within an owner’s unit or designated parking space, which might either be in the owner’s exclusive use common area or an assigned parking space; provided, that CIDs can enact “reasonable restrictions” on EV charging stations that do not greatly increase the cost of the station or decrease its efficiency.
For CIDs that have a process for approval of architectural modification, existing law states that applications for installing an EV charging station must be processed substantially in the same way. It also provides that an application to install an EV charging station that is not denied in writing within 60 days is deemed approved, unless there was a reasonable request for additional information.
Section 4745, as it existed before the start of 2019, placed the following financial obligations on owners of EV charging stations:
- costs of electricity used by their EV charging station;
- costs for damage caused by the installation, lack of maintenance and repair, etc. of the EV charging station;
- ongoing costs of maintaining and repairing the EV charging station itself until it is removed; and
- costs of maintaining liability coverage of at least one million dollars ($1,000,000).
CIDs have the following potential financial obligations:
- Any CID that intentionally violated Section 4745 were potentially liable to the applicant for costs incurred by the applicant by such violation and payment to the applicant of up to $1,000 in penalties.
- Also, if the applicant pursued legal action to enforce Section 4745, the CID potentially would be liable for the applicant’s legal fees.
III. How It Is Now
In order to remove what the new law’s author saw as an obstacle to more EVs garaged in CID lots, SB 1016 made some changes to Section 4745 and added a new Civil Code section – Civil Code Section 4745.1 (“Section 4745.1”) – which specifically extended Section 4745’s protections to EV Meters.
The amendment to Section 4745 with potentially the biggest impact is the removal of the heavy insurance requirements, including the required million dollars of insurance coverage. Instead, EV charging station owners are merely required to provide their HOA with proof of insurance covering the charging station. Section 4745 was also amended to clarify that EV charging station owners would be responsible for the costs associated with the installation of their charging station, as opposed to just the electricity used by the charging station. The remaining financial obligations found in Section 4745, as outlined above, remain intact.
New Section 4745.1 mirrors many of the charging station protections and is intended to prevent CIDs from distinguishing between the EV charging stations, which must in most cases be permitted, and the accompanying EV Meter, which, while impliedly covered within Section 4745, was not specifically covered.
Thus, new Section 4745.1 makes any provision in a CID’s governing document that effectively prohibits or unreasonably restricts the installation or use of EV Meters unenforceable, but permits CIDs to make reasonable restrictions on the installation of the EV Meters based on space, aesthetics, structural integrity, and equal access for all homeowners.
In sum, your CID board must generally attempt to find a reasonable way to accommodate the installation request.
In addition, an owner who desires to place an EV Meter in common area or exclusive use common area must coordinate and pay for the utility company and a licensed contractor to install needed wiring. The other financial obligations of the owner recited above have been extended to costs associated with the EV Meter – of course, with the noted exception of the insurance coverage minimum.
IV. What Does This Mean for Associations and Boards?
This new law means that boards should take a look at their governing documents and ask themselves a few questions:
- Do our governing documents have rules that would apply to EV charging stations or EV Meters?
- Do any of our rules prohibit or unreasonably restrict EV charging stations or EV Meters?
- Do any of our restrictions on EV charging stations significantly increase the cost of a station or significantly decrease its use?
- Are any of our restrictions on EV Meters based upon space, aesthetics, structural integrity, and equal access to those services for all homeowners?
- Do our governing documents provide a process for review and approval for architectural modification, alteration, etc.?
- Does our process require that an application be reviewed and approved/denied, in writing, within 60 days from the receipt of the application?
V. Conclusion
As more EVs hit the road, they will need to be parked – and charged – somewhere. If your board receives an application from an owner asking to install or use an EV charging station or a dedicated electric meter, check with your association’s attorney to confirm that your process is in compliance.
If you have further questions regarding this case or what you can do to ensure you are properly operating your LLC or partnership, please contact Louis J. Sarmiento, Jr., Esq. (ljs@sfcounsel.com) or William M. Scherer, Esq. (wms@sfcounsel.com).
– Written by Bill Scherer