California is a leader in promoting clean and renewable energy technologies.  In January 2018, Governor Brown issued Executive Order B-48-18 (“EO”) calling for 5 million zero-emissions vehicles by 2030 and the installation of 250,000 electric vehicle chargers by 2025.  As stated in the EO, “California increased the number of zero-emission vehicles in the state by 1300 percent in six years – growing from 25,000 in 2012 to more than 350,000 – and zero-emissions vehicles now account for approximately 5 percent of all new car sales in California.”

As the number of electric vehicles “(EVs)” increase, HOAs will see an increasing number of homeowners seeking to install electric vehicle charging stations and related equipment.  All HOAs must understand the law as it pertains to such requests to avoid civil penalties and exposure to attorney fee awards if they fail to comply.

In 2011, Civil Code Section 4745 (formerly Civil Code Section 1353.9) was enacted to support the proliferation of clean electrical vehicles and the policy of the state to promote, encourage and remove obstacles to the use of electrical vehicle charging stations.  The law has been amended several times since its enactment with the most recent changes going into effect on January 1, 2019.

The following changes to Section 4745 went into effect on January 1, 2019:

    • Section 4745(a) expanded the scope to allow homeowners to install charging stations within their units (i.e., garages).
    • Section 4745(f)(1)(D) clarifies that the homeowner has to pay for the electricity usage associated with the charging station and the costs of installation of the station.
    • Section 4745(f)(3) was amended to eliminate the $1,000,000 homeowner liability coverage policy requirement (no limit is now specified) and delete the requirement for the HOA to be named as an additional insured under the policy.[1]
    • Section 4745(k) was amended to allow recovery of attorney’s fees only by a prevailing plaintiff homeowner seeking to enforce compliance with the law. The HOA cannot recover attorney fees even if it is the prevailing party.

[1] Although the requirement to name the Association as an additional insured on the policy was deleted, 4745(f)(1)(c) still states that within 14 days of approval of a request to install a charging station the owner must ‘provide a certificate of insurance that names the association as an additional insured under the owner’s insurance policy in the amount set forth in paragraph (3).”  We anticipate there will be a bill introduced to clean up this obvious conflict and error in the statute as currently written.

Section 4745 provides that any provision of the governing documents that either: (1) effectively prohibit or (2) unreasonably restrict the installation or use of an electrical vehicle charging station within an owner’s unit or in a designated parking space, including, but not limited to, a deeded parking space, a parking space in an owners’ exclusives use common area, or a parking space that is specifically designated for use by a particular owner is void and unenforceable.

The governing documents may, however, include provisions that impose reasonable restrictions on electric vehicle charging stations.   The law defines ‘reasonable restrictions’ as ‘restrictions that do not significantly increase the cost of the station or significantly decrease its efficiency or specified performance.” (Civ. Code §4745(b)(2); Emphasis added)

The term ‘electric vehicle charging station’ is defined as:

“a station that is designed in compliance with the California Building Standards Code and delivers electricity from a source outside an electric vehicle into one or more electric vehicles.  An electric vehicle charging station may include several charge points simultaneously connecting several electric vehicles to the station and any related equipment needed to facilitate charging plug-in electric vehicles.” (Civ. Code §4745(d))

If approval is required for the installation or use of an electric vehicle charging station, the application for approval shall be processed and approved in the same manner as an application for an architectural modification to the property.   Any application which is not denied in writing within 60 days from receipt, shall automatically be deemed approved, unless the delay is the result of a reasonable request for additional information.

If the charging station is to be placed in the common area or exclusive use common area, the owner is required to obtain approval from the association and agree in writing to do all of the following:

    • Comply with the association’s architectural standards for the installation of the charging station.
    • Engage a licensed contractor to install the charging station.
    • Within 14 days of approval, provide a certificate of insurance that names the association as an additional insured under the owner’s insurance policy.[1]
    • Pay for both the costs associated with the installation of, and the electricity usage associated with, the charging station.

The owner (and each successive owner) of the charging station shall be responsible for all of the following:

    • The cost for damage to the charging station itself or damage caused by the installation, maintenance, repair, removal or replacement of the station.
    • The cost to maintain, repair and replace the station until it is removed and restoration of any common area after removal.
    • The cost of the electricity associated with the charging station.
    • Disclosure to prospective buyers as to the existence of, and related responsibilities concerning, the charging station.

In addition, owners may install an exclusive use charging station in the common area only if the installation in the owner’s designated parking space is impossible or unreasonably expensive.  If the installation is in the common area, the association is required to enter into a license agreement with the owner for the use of the space in the common area.  The law provides that the association may create new parking spaces where one did not previously exist to facilitate the installation of an electric vehicle charging station. (See, 4745(g) and (h).)

[1] See footnote 1.

New Legislation Adding EV-Dedicated Time of Use (“TOU”) Meters

In 2019, the legislature enacted Civil Code Section 4745.1 related to homeowner  requests to install EV-dedicated Time of Use (“TOU”) meters.  TOU meters allows owners to be separately billed and monitor energy consumption used for charging their vehicle.  This allows owners to take advantage of more favorable rates offered by utility providers and modify their behavior to obtain cheaper ‘off-peak’ rates to charge their vehicles (typically between late evening and early morning when there is less demand on the power grid.)  Due to lower ‘off-peak’ rates in the late evenings, at home charging on a separate meter is often the most cost-efficient means of charging EVs and the law is designed to allow homeowners to benefit from these cost savings.

The term ‘EV-dedicated TOU meter’ is defined as:

“an electric meter supplied and installed by an electric utility, that is separate from, and in addition to, any other electric meter and is devoted exclusively to the charging of electric vehicles, and that tracks the time of use (TOU) when charging occurs.  An ‘EV-dedicated TOU meter’ includes any wiring or conduit necessary to connect the electric meter to an electric vehicle charging station, as defined in Section 4745, regardless of whether it is supplied or installed by an electric utility.” (Civ. Code §4745.1(d))

The law related to TOU meters in large part mirrors the law with respect to EV charging stations but gives the HOA more control over the imposition of reasonable restrictions.  With respect to TOU meters, “‘reasonable restrictions’ are restrictions based upon space, aesthetics, structural integrity, and equal access to these services for all homeowners, but an association shall attempt to find a reasonable way to accommodate the installation request, unless the association would need to incur an expense.” (Civ. Code §4745.1(b)(2))

Applications for approval are processed and approved in the same manner as an application for an EV-Charging station.  However, there is no insurance requirement for TOU meters and 4745.1 provides that HOAs shall “attempt to find a reasonable way to accommodate the installation request, unless the association would need to incur an expense.” (Civ. Code 4745.1(b)(2).

Recommendations – Be Proactive!

In anticipation of significantly more requests to install EV Charging Stations and EV-dedicated TOU meters in the near future, HOAs should consult with their attorneys to draft rules and guidelines to process these installation applications in compliance with the statutes.  HOAs should be proactive and consult with professional consultants and contractors about appropriate installation specifications and/or requirements including installation methods, locations, materials, products, etc. to be incorporated into the rules and guidelines.  Ensuring the HOA’s rules are compliant is critically important given the exposure to civil penalties (up to $1,000) in addition to damages and attorney fees for violations of Section 4745 or 4745.1.

 

J.SPENCER EDGETT  was admitted to the State Bar of California in 2002.  Mr. Edgett joined Chapman & Intrieri, LLP in 2004 and since that time has primarily focused his practice on representing community associations both as general counsel and in successfully prosecuting numerous construction defect claims resulting in tens of millions of dollars recovered for our clients. He regularly advises and assists community association and condominium board members on all aspects of management and operations including fiduciary responsibilites, drafting and revising governing documents, vendor contract negotiations, collection matters and enforcement issues.  Mr. Edgett is admitted to pracice law before all courts of the State of California and in the United States District Court for the Northern District of California, plus in the Commonwealth of Massachusetts and in the United States District Court of Massachusetts.  He is the managing partner in Chapman & Intrieri, LLP’s east coast office in Salem Massachusetts.  His practice areas include litigation with an emphasis on construction defects, business, real estate, landorlord/tenant, personal injury, consumer protection claims under M.G.I., c.93A and condominium law.